On­line is tricky look for fash­ion cast-offs

In­vestors snap­ping up brands and re­launch­ing them is hardly a li­cence to print money, writes Laura Onita ‘More than ever be­fore, no one is owed a liv­ing in the mar­ket that is un­fold­ing’

The Daily Telegraph - Business - - Business -

Other than be­ing fash­ion fail­ures, s, what do Laura Ash­ley, y, Karen Millen, Coast, Oa­sis and Ware­house ouse have in com­mon? on? De­spite col­laps­ing and clos­ing ng all their stores, the brands are sur­viv­ing ving on­line af­ter be­ing bought by a mix ix of trade buy­ers or in­deed ri­vals. Th­ese se brave busi­nesses are hop­ing ng that the brand DNA is strong enough gh to lure shop­pers to their re­spec­tive web­sites eb­sites and con­vince them to spend. end.

Other than Laura Ash­ley, which is still trad­ing from stores res for now, all of the afore­men­tioned brands have been bought by Boohoo.

The tim­ing is seem­ingly mingly in their favour as click-and-col­lect ol­lect in shops might be­come e less pop­u­lar, with more peo­ple work­ing from home and able to ac­cept de­liv­er­ies.

Plus, with over a quar­ter of shop­pers now plan­ning ing to spend more on­line af­ter fter the lock­down re­stric­tions ns are lifted, ac­cord­ing to Global

Data, it is look­ing up for e-com­merce – al­though ugh chal­lenges still re­main. in.

Typ­i­cally, the im­me­di­ate ap­peal when a busi­ness goes into ad­min­is­tra­tion is cheap stock. The new par­ent com­pany gets it for next to noth­ing.

Even shift­ing that at a big dis­count on­line could pro­duce a quick profit. fit. While their new own­ers’ in­ten­tions ten­tions ap­pear noble, the move ove is largely op­por­tunis­tic.

“If you can do it reg­u­larly, egu­larly, [buy] one or two [busi­nesses] es] a year, it can make quite a nice e boost to your trad­ing per­for­mance. e. It con­ve­niently blurs the un­der­ly­ing per­for­mance,” says Richard Hy­man, , an in­de­pen­dent re­tail an­a­lyst.

“What makes them m [brands] so at­trac­tive is the op­por­tu­nity or­tu­nity to buy some rev­enue. It’s as­set-strip­ping sset-strip­ping re­ally and it’s low-cost.” st.”

Hoard­ing brands is s not a new idea, either. Re­tail bil­lion­aires aires Mike Ash­ley and Philip Day ay have both ac­cu­mu­lated strug­gling ing chains over the years, most of which hich were bought out of ad­min­is­tra­tion. The new breed of brand own­ers, how­ever, is hop­ing that by shed­ding the ex­tra cost and lo­gis­tics that come with run­ning stores, they will be eas­ier to man­age.

Sell­ing on­line is not with­out its is­sues, how­ever. Many brands stopped be­ing rel­e­vant long ago. A dras­tic rein­ven­tion, whether it is the name, the logo or the ac­tual de­sign of the clothes, re­quires cash at a time when there is al­ready a plethora of choice on­line and some con­sumers are squir­relling away money.

Busi­nesses such as Boohoo are bank­ing on scale to source all of their gar­ments for all their brands from the same sup­pli­ers at better prices, and share all the back-end in­fra­struc­ture to keep the brands alive. They have a de­cent shot at cap­tur­ing a new wave of shop­pers.

Those that live on­line on their own will find the go­ing much harder and it means mar­ket­ing be­comes even more im­por­tant.

From a com­mer­cial stand­point, Karen Millen is arguably the most mean­ing­ful be­cause its suc­cess stems from sell­ing to more af­flu­ent shop­pers at higher prices. The main con­cern af­ter Boohoo swooped was the po­ten­tial mis­match that could de­value the brand.

Laura Ash­ley’s new owner is Gor­don Brothers, the re­struc­tur­ing spe­cial­ist, which is typ­i­cally drafted in to shift the leftover stock for de­funct brands.

Its view, ac­cord­ing to Nick Tay­lor, a se­nior man­ag­ing direc­tor, is that e-com­merce is only one pil­lar of its wider strat­egy that he calls “as­set­less”. He wants to ex­pand its port­fo­lio of li­cences and fran­chises, and strike more whole­sale deals. “Through strate­gic li­cens­ing ar­range­ments and spe­cial­ist com­pa­nies, a brand can del­e­gate many of a re­tailer’s com­plex­iti com­plex­i­ties, obli­ga­tions, sourc­ing, dis­tri­bu­tion and an lo­gis­tics,” Tay­lor says.

Be­fore the pan­demic, pan­dem struc­tural changes in re­tail, such suc as the shift to on­line, were al­ready al­read ev­i­dent, Tay­lor says. What the pan­demic has done is ac­cel­er­ate those changes. “It’s likely that we’ll see 10 years’ ye worth in as many months.”

It is not just the re­cent re­cen wave of brands that have sought a life on­line. BHS, once owned by Sir Philip Green, launched on­line a few months af­ter the high street cha chain went bust in 2016 af­ter Qata Qatar-based owner Al Mana bought its web­site and its in­ter­nati in­ter­na­tional arm. How­ever, it an an­nounced it was shut­ting d down two years later.

The Wool Wool­worths brand was also res­ur­rected re on­line for sev­eral years af­ter the re­tailer r col­lapsed in 2008. Sell­ing o on­line is not ex­actly am a mon­ey­maker. Dis­count fas fash­ion chain Pri­mark, for e ex­am­ple, has been res­o­lute in its re­fusal to sell on­line be­cau be­cause it would erode its al­ready t thin profit mar­gins. The cost costs of de­liv­ery and ware­hous­ing all add up. More­over, los­ing t their phys­i­cal pres­ence would ha have been detri­men­tal to sales for most brands in the first in in­stance too. “Most peo­ple are look­ing at busi­nesses through throug the only eyes they’ve got and they are rooted in the p past,” says Hy­man.

“What th that leads them to con­clud con­clude is that if they can ditch the li­a­bilit li­a­bil­i­ties, ev­ery ev­ery­thing will be al­right al­right. More than ever be be­fore, no one is owed a liv­ing in the mar­ket that is un­foldi un­fold­ing. It would be re­all re­ally naive for peo­ple to think that be­ing on­line means more than it does.”

Left to right: Ware­house, TM Lewin and Laura Ash­ley have all run into fi­nan­cial dif­fi­cul­ties fol­low­ing the Covid out­break Han­nah Ut­t­ley

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.