In the money: Can brands bounce back?
Many struggling brands still have huge resonance with shoppers
Buoyant first-half sales posted last week by department store retailer Debenhams were helped by the return of the re-launched Principles label. But what has happened to other brand names rescued from the brink over the past year or so? Richard Woodard finds out.
Having a fashion brand that’s also a household name can be a double-edged sword. Widespread recognition is a blessing, but can also be a curse if the brand in question doesn’t stay at the top of its game.
There’s a tendency to think that the brands we have grown up with are in some way invulnerable, immune to the pressures on cash flow and profitability that are a fact of life for newer, less established names.
But history should teach us that this is not so. Recent history too – after all, didn’t the terrifying economic meltdown of 2008 begin with the demise of one of the financial world’s most revered brand names – Lehman Brothers?
The closest that the fashion world has come to such a high-profile demise has arguably been Christian Lacroix, a catwalk giant now reduced to selling accessories and perfumes under licence after rescue bids failed at the end of last year.
There have been other, less celebrated casualties, and a number of other revered brand names have been rescued from the brink over the past year or so.
But what now? Can they rise, phoenix-like, from the ashes of the recession? Or should they have been left to die a natural death? Let’s consider some of them in detail…
One of the UK’s oldest clothing companies with a history dating back to 1784, Viyella’s fate was sealed by a number of changes of ownership in the years leading up to the downturn.
Austin Reed – which agreed a rescue deal for the company when it fell into administration in early 2009 – had been stalking Viyella for a couple of years, but could never agree an attractive enough deal.
“We thought it a great brand with a fantastic heritage, product offering and potential,” explains an Austin Reed spokesperson.
“Also, uniquely, the Viyella brand has never been trashed or taken downmarket.”
The company also identified a good fit with its rejuvenated CC (ex-Country Casuals) brand, taking on Viyella’s 37 outlets (including concessions) and swiftly increasing this to more than 125, some of them joint sites with CC.
Listings with House of Fraser and John Lewis followed, and Viyella has out-performed expectations.
“We started with virtually no stock and so planned to make a small loss, but 12 months on from acquiring the brand we’ve actually broken even,” the company says.
Playing on Viyella’s overseas reputation for tailoring, a UK men’s wear line was launched last autumn/winter, and the company aims to double its size in the near future.
In short: a bright future, because Viyella fills a gap in the Austin Reed portfolio, and the company has quickly tapped into potential growth areas for the brand.
Victorian boulevardiers were wearing the “Aquascutum wrapper” in mid-19th century London, but by the early years of the 21st century, the outerwear company’s fortunes had decidedly dipped.
Owned by Japan’s Renown since 1990, it suffered as a result of its parent company’s deeper domestic problems, and also thanks to a painfully elongated “for sale” period.
From numerous reluctant suitors emerged a dream team for the venerable brand: Harold Tillman and Belinda Earl. Between them they have already restored the fortunes of an ailing Jaeger (which was in dire straits when Tillman bought it in 2003, installing Earl as CEO a year later).
Six months on, the new owners are coy about their detailed plans, but some pain for Aquascutum’s 300-plus staff looks inevitable as synergies with Jaeger are identified.
Beyond that? An optimistic outlook, based on Earl’s upbeat assessment of “potential to expand in both existing and new markets”, and a likely diversification into new product categories – rather like Viyella, in fact.
An unfortunate and indirect casualty of the Icelandic banking meltdown, the defunct high street retailer’s assets were bought by Debenhams in what appeared to be an opportunistic act to acquire some cheap stock.
But several months later, Principles is back, with a new collection designed by Ben de Lisi making its debut in Debenhams stores during February, and also available online.
This might be one of the shrewdest recession deals yet.
In effect, Debenhams has bought just the brand – and therefore all the consumer goodwill that goes with it – and can start again from scratch with none of its pre-recession baggage.
A work in progress, but the prospects for the value clothing chain are gloomy.
Administrators have so far closed nearly 250 stores, including those of sister chain Au Naturale, and prospective buyers have reportedly been reluctant to sign on the dotted line when so much of the company is unprofitable.
The big question for a prospective buyer is whether the Ethel Austin name has the cachet and sheer consumer recognition shared by Viyella, Aquascutum and Principles.
In the end, that could be the difference between survival and extinction.
…which brings us back to arguably the biggest name of the lot.
Apparently all but defunct, but that name still has huge resonance for fashionistas.
Even as the rescue of the company was abandoned three months ago, there were whispers of a future takeover bid from a Middle East consortium. Watch this space…
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