As the retail industry returns from its collective summer holidays and looks ahead to the autumn season, Drapers recaps how the high street has changed so far this year
Aggressive acquisitions of struggling chains
Fashion businesses have continued to change hands over the past nine months as new retail empires have emerged, and others have been bolstered with new additions.
Retail tycoon Mike Ashley has, as one commentator put it, continued to “irrationally hoover up the high street.” Jack Wills joined the Sports Direct fold at the beginning of this month after it was bought by the retail group for £12.8m in a pre-pack administration deal. Challenging trading led Jack Wills to conclude that it would be best served as part of a larger group.
Speaking of larger groups, Manchester fast fashion giant the Boohoo Group is also on the acquisition trail. It bought the online business and intellectual property rights of premium womenswear brands Karen Millen and Coast in August, resulting in 62 immediate redundancies. All pattern-cutting roles were then placed into consultancy later in the month.
Swathes of store closures
Company voluntary arrangements, administrations and the changing role of stores mean the makeup of the high street is in flux. Arcadia Group closed 23 of its stores in the UK and Ireland, including the Miss Selfridge Oxford Street flagship, after landlords eventually approved all seven of the group’s CVA proposals in June. Creditors also signed off on Debenhams’ plans for a CVA in May, paving the way for the department chain store to close 22 stores.
LK Bennett shuttered 15 stores, including shops in Birmingham, Bath and Oxford, after it was bought by Rebecca Feng, who runs the retailer’s Chinese franchises, in April.
Footwear retailer Office will close 10 to 15 of its loss-making stores over the next two years and more store closures at Marks & Spencer could be on the cards. Chief executive Steve Rowe said in July that existing plans to close 100 stores are “not finite”.
Changes at the top: people moves
Top-level appointments and departures are never in short supply in retail. Most recently, Beth Butterwick left her position as the CEO of Karen Millen and Coast, after Boohoo’s purchase of the two brands. Sports Direct’s acquisition of Jack Wills had similar consequences for chief executive Suzanne Harlow, who left following the takeover.
The industry is waiting to see what Debenhams’ new chief executive, Stefaan Vansteenkiste, will do to turn the struggling retailer around. Vansteenkiste joined Debenhams in April 2019 as chief restructuring officer, and Debenhams said he has been working closely with the executive team on a new business plan to deliver changes. Vansteenkiste is a turnaround expert at professional services firm, Alvarez & Marsal.
It has also been all change at Superdry. Co-founder Julian Dunkerton was reinstated as a non-executive director following a narrow vote from shareholders in April. The move sparked a mass exodus from Superdry’s board. Chairman Peter Bamford, chief executive Euan Sutherland, chief financial officer Ed Barker and chairman of the remuneration committee Penny Hughes all exited the business with immediate effect the same month.
In another boardroom shake-up, New Look founder and non-executive director Tom Singh retired from the business at the end of June. Former House of Fraser chief executive Nigel Oddy also joined the business as chief operating officer in April.
The sustainable fashion imperative
This has been the year that retailers have sat up and taken sustainability seriously. Businesses such as Adidas, Chanel, Selfridges, Burberry and H&M signed the Fashion Pact, an initiative to champion sustainable fashion that was presented at August’s G7 summit in Biarritz.
Several leading retailers are to meet their carbon emission targets two years early as part of the British Retail Consortium’s “Better Retail Better World” initiative.
The high street has unveiled a series of sustainable initiatives. White Stuff is launching environmentally friendly and ethical product ranges for autumn 19, as it moves towards becoming a more sustainable brand. It has signed a three-year Fairtrade cotton commitment and also partnered with sustainable factory Saitex on a denim collection.
In April, H&M announced that shoppers will be able to see details including suppliers’ names, production countries, factory names and addresses across all garments and most of H&M Home products in a bid to drive transparency.
There is still plenty of work to be done, but it is promising to see sustainability move up the industry’s agenda in the first half of this year.
The Drapers Verdict
The pace of change shows no signs of slowing and the high street is likely to be a very different place by the time December rolls around. There are a wave of challenges facing the industry – such as the fallout from Brexit and high levels of discounting cutting into margins during peak trading – but not all the changes facing the high street are negative. There has been plenty of movement around sustainability and it will be interesting to see this issue progress.