With improved sales and a returned CEO, Jack Wills is positioning itself to overcome earlier difficulties
When Jack Wills founder and majority shareholder Pete Williams returned as chief executive last August, it appeared to mark a turning point for the business – but this week’s trading update shows there is still work to do.
Sales at Jack Wills were up 4.1% in the year to 31 January, but gross margin and EBITDA are still suffering from an attempt to outsource its warehouse operations in 2014, which proved disastrous. Orders were not being fulfilled on time that Christmas, and trading suffered as a result. It took a while, but the firm has now taken distribution back in house.
However, the warehouse problems were not the only challenges Jack Wills faced. Even before 2014, profits were being swallowed up by its rapid expansion, and in early 2015, Drapers learned of a number of departures from the business amid concerns about its direction.
Yet yesterday’s trading update was upbeat. There has been ‘‘swift and significant improvement’’ since Williams’ return as CEO, the company said. And it announced that BlueGem Capital Partners, the private equity owner of London department store Liberty, has partnered with Williams to acquire the business.
BlueGem’s investment signals confidence in the brand – and in Williams. There may be growing competition in the young fashion sector, particularly online, but Jack Wills benefits from a clear brand identity and excellent penetration within its target market in the UK – namely, university students and those who prefer a preppy look. It also has room to further exploit its British heritage internationally.
When he took the helm again last year, Williams set about refocusing the business, paying particular attention to product, digital investment and the fresh opportunities for (hopefully more considered) international expansion. The BlueGem deal will inject the brand with cash to support this.
Interestingly, Williams has also introduced an initiative called The Fabric of Jack, which aims to increase transparency in the retailer’s supply chain. This is a smart move. Consumers and the media used to be distanced from what goes on in the supply chain but, with the proliferation of mobile and social media, and high-profile disasters such as the Rana Plaza collapse, awareness has grown.
In addition, the Modern Slavery Act 2015 came into effect on 1 October. This requires businesses with an annual turnover of £36m or more to prepare and publish a statement of the steps they have taken during each financial year to ensure slavery and human trafficking are not taking place anywhere in their supply chains.
As Jack Wills expands internationally, it will open itself up to more and more diverse legal jurisdictions, business practices and cultures. Greater transparency will help it to manage the risks.
There is more to do to improve Jack Wills’ profitability, but Williams is the man to do it – and with the support of BlueGem, I suspect we will see a different set of results next year.