Recently, a government advisor, Professor Neil Ferguson, director of the modelling programme at Imperial College London's MRC centre for global infectious disease analysis, estimated that up to two thirds of people who die from coronavirus in the next nine months are likely to have died this year from other causes. He said that many of those deaths were likely to be old and seriously ill people who would have died from other conditions before the end of the year. What COVID-19 is doing, sadly, is speeding up the end of life and it’s the same for brands and retailers.
Some retailers have started to fall into administration, pointing the finger of blame at the COVID-19 coronavirus. The majority of these brands and retailers were sickly patients to start with. Brands like Beales, Laura Ashley, Carluccio's and BrightHouse were on wobbly ground way before this devastating virus was on the horizon. The coronavirus has just cut short the inevitable. Bournemouth based department store Beales closed earlier than scheduled and left unsecured creditors £17.6m out of pocket.
Left - The Beales flagship store in Bournemouth
Other patients at risk are brands like shopping centre group Intu, struggling under a £4.5bn debt mountain, and who failed to secure new funding before the crisis hit. They’ve also been hit by stores holding back their rent payments recently. Frasers, owner of Jack Wills, has been cutting off vast limbs of its retail network to save their critically ill patient, Cath Kidston is looking for a buyer to save the business and up to 800 jobs and New Look has requested a three-month rent holiday from landlords. H&M has threatened landlords with walking away from 300-plus store leases if sales fail to match pre-coronavirus levels once the pandemic passes. How others like Debenhams and the Arcadia come out of this pandemic is anybody’s guess.
Right - Laura Ashley has fallen into administration
The patient metaphor has one big and important point; the third of previously healthy people who could potentially die. This is where the government efforts to help businesses should be focussed. Those businesses who were previously healthy, but, due to unforeseen circumstances, have been thrown into jeopardy should be given the largest help. Whether it’s down to the sector they are in or the way they sell, these previously healthy retailers should be given the ventilator of loans and payment holidays to give them life.
The longer this crisis goes on the larger that third will become. It is survival of the ones who were the fittest going into all of this.
Read more from TheChicGeek Archive - Comment Fashion For Clean Air
BUY TheChicGeek's new book - FASHIONWANKERS - HERE
You’re joking, not another one!! - said in a Bristolian accent - when news came in that Sports Direct’s, Mike Ashley had snapped up Jack Wills. Yet another brand to be gobbled up by the Pac-Man of the British high street.
Left - Jack Wills was just gobbled by the high street Pac-Man, Mike Ashley
The preppy retailer had been on the block after private equity owner, BlueGem Capital, lost interest. Things were obviously worse than was thought with Jack Wills being put into administration and immediately sold pre-pack to Sports Direct for £12.75 million. The deal includes all 100 UK and Ireland stores and stock, as well as a distribution centre, but not the international business.
This is just another brand in a long list of troubled retailers snapped up by Ashley in his buying spree over the last few years. While many of these retailers have been snapped up for bargain prices, inspired by his Sports Direct marketing no doubt, they were in trouble for a reason, and, there’s only so many brands you can give the attention and TLC they need to nurse them back to health.
Ashley has also been distracted with his failed bid for Debenhams and his shareholding being wiped out, and in his recent, disastrously handled, release of Sports Direct’s latest set of results he started to lament his purchase of House of Fraser. He’s realised that House of Fraser is a serious money pit. So, why does he want even more? Just because you can, doesn’t mean you should.
Every time a brand gets into trouble, Ashley is named as a potential suitor and it’s almost becoming a joke. It’s as though he’s some magic man that knows something we don’t and while we’ve been waiting, with some scepticism, on some of the ‘Harrods of the high street’ rhetoric to be followed through on, he needs to hurry up before it all becomes too late to repair.
Social media has become a running commentary of people saying how bad their local House of Fraser has become and how it is slowing turning into another branch of Sports Direct with its Lonsdale pants and Slazenger joggers.
Maybe a sign of intention, he paid £95 million - more than for the entire chain - for the freehold of the original House of Fraser in Glasgow promising to turn it into the ‘Harrods of the north’. (Harrods must be loving all this free publicity btw). There are plans to create a mini, higher end chain of stores - around 7, including Glasgow - within the House of Fraser group, called ‘Frasers’ with the remaining stores stocking more mainstream options.
Ashley said in the recent set of results, “On a scale out of 5, with 1 being very bad and 5 being very good, House of Fraser is a 1, albeit we are trying very hard to turn the business around this will not be quick and it will not be easy. Even though we do believe there could be a bright future for House of Fraser, and indeed have publicised our Frasers vision which we are very excited about, if we had the gift of hindsight we might have made a different decision in August 2018.
“We have continued to look under the bonnet as we integrate the business, we have found that the problems are nothing short of terminal in nature,” he said. “We are continuing to review the longer-term portfolio and would expect the number of retained stores to reduce in the next 12 months.”
He needs to start with the Glasgow store, which is already one of its premium branches, and show the industry and consumers what the plans for the roll out are.
As well as House of Fraser and Evans Cycles, he added online retailer, sofa.com, this year, and then said the overall retail industry is in “dire straits”.
If this wasn’t a big enough headache, the Belgian tax authorities has just sent a payment demand for a whopping £605 million. Sports Direct has entered into a mediation process and the demand relates to the tax treatment of goods being moved intra-group throughout the EU via Belgium. Even if reduced, it’s likely to be a huge bill regardless.
As for the core Sports Direct business, profits slipped by 4.7% to £264.7 million according to the latest financial figures. The company said it will not be issuing any profit guidance for next year, but some guidance may be issued with the company’s half-year results.
They also said, “We remain very focused on delivering our elevated proposition. We will see some great milestones achieved in the year ahead, with the Flannels flagship store opening and we will commence the work to shape the Frasers Glasgow store into what we believe will be a fantastic shopping experience for our customers and showcase our intentions for the remaining portfolio of stores.”
Flannels is the bright spark within the group and the most believable part when it talks of ‘elevation’. Selling premium brands such as Valentino and Gucci and expanding rapidly, it would fit into this vision. As part of the Premium Lifestyle division, which also includes Cruise and van Mildert stores, it has grown from sales of £60.4m in FY17 to £173.9 in FY19.
Right - Inside the 'Harrods of the north' - Glasgow House of Fraser
The company told Drapers, Flannels had an ambition to open 15 to 20 stores per year until it reaches its target of 100. There are currently 43 shops with new openings in Chester, Newcastle, Watford, Sutton and York as well as the huge and much anticipated Oxford Street branch.
Sports Direct Group’s head of elevation Mike Murray said, “We are focusing on key cities that haven’t had exposure to luxury or a well-executed luxury environment. Our stores aren’t the typical size of 2,500 sq ft or 3,000 sq ft. We are focusing on big destination stores so it is worth people’s while coming.”
The new House of Frasers or ‘Frasers’ could just be an enlarged version of this, but there are only so many £800 designer hoodies they’ll be able to sell and will need incorporate more experiential services and novelties. The House of Fraser brand has been damaged and will take a lot of time and money if it’s to compete with the regional Selfridges and Harvey Nichols of the world.
The prediction is the entire brand will be binned and disappear along with the majority of the stores and the new Frasers brand will live on in a handful of larger cities. But, this is still going to take a lot of money.
The Sports Direct Group currently operates 367 stores in England, 37 in Scotland, 28 in Wales and 17 in Northern Ireland, along with 35 other fascias including USC. This represents a net reduction of 9 stores over the period as a result of 13 openings and 22 closures. Despite the net reduction in stores the total sales area has increased to approx. 5.6m sq. ft. so it is very exposed to the current state of the high-street.
Lord Stuart Rose has warned Mike Ashley over his ambitions for a retail ‘oligopoly’, saying, “My view in retail is to stay nimble, lean and mean. You need to be able to turn on a sixpence,” he said.
This shopaholic nature of brand buying and lack of investment in what he already owns is a confusing and dangerous combination. He needs to slim everything down, keep what’s working and be ruthless. (That last bit shouldn’t be a problem).
We’re all hoping Ashley’s game plan, whatever it is, is successful because he now owns a huge slice of the British high street. FYI - Spud-U-Like is still available… #harrodsofthehighstreet
Read more ChicGeek expert comment - here
When William Webb Ellis first picked up that ball, and ran with it, little did he know that nearly 200 years later 20 international teams would be competing for a cup named in his honour.
Left - Superdry - World Legends - England £74.99
The Rugby World Cup returns home to England, this autumn, in what will be one of the sporting highlights of the year.
TheChicGeek says "Rugby style, particularly the rugby shirt, never really goes out of style. Whether in team colours or bold stripes, it was a favourite of artist David Hockney and was heavily referenced by John Ray, Creative Director at dunhill, at both his spring and autumn 15 collections."
Right - A little of bit of retro inspiration - David Hockney sporting a striped rugby top
The Rugby World Cup runs from 18th September - 31st October 2015 and here are TheChicGeek's picks of the best rugby inspired menswear available:
Below - dunhill - AW15 catwalk collection - Yellow Soft Cotton Rugby Shirt - £230
Left - Polo Ralph Lauren - Custom-Fit Striped Rugby Shirt - £230
Below - Jack Wills - Striped Rugby Shirt - £49.50
Left - Jack Wills - Rugby Ball - £16.50
Left - Thomas Pink - Rugby Cufflinks - £69
Left - Thomas Pink - Stanford Knit Rugby Jumper - £225
Middle - The Rugby Fragrance - 100ml - £24.99
Below Right - dunhill - AW15 Catwalk Collection - Brown Cotton/Cashmere Rugby Polo - £625