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Review of the Year

From IPOs to administrations, supermarkets to trade shows, not forgetting a never-ending summer and Black Friday. These are 2014’s big stories…

JANUARY


John Lewis strode into the new year after a record-breaking Christmas 2013. In the week to January 4, clothing sales rocketed 27.7%, contributing to overall sales growth of 23.6%. Online sales soared 34.4% on the same week the previous year.

John_Lewis_bonus

Sports Direct stated its intention to work “at an operational level” with Debenhams, after acquiring a 4.63% stake in the struggling department store chain, a relationship which developed as the year progressed.

The year got off to a dismal start for footwear retailer Barratts, whose 42 remaining stores closed over the Christmas period following its collapse into administration - for the third time in five years - in November 2013. However, in January there was a glimmer of hope, as new owners Harvey Jacobson and Michael Ziff announced the business would continue to operate online as Barratts.co.uk.

Barratts_Front

 

FEBRUARY


Speculation mounted over the future of value womenswear retailer Internaçionale after several head office staff were made redundant. When bailiffs entered stores, suppliers began to count their potential losses - totalling an expected £12m for unsecured creditors. By February 28 Internaçionale had officially entered administration, affecting 1,000 jobs. Its final store closed on June 8.

Internacionale_AW14

Showing a more positive outlook, German etailer Zalando sought advice on Europe’s biggest internet IPO, as the Berlin-based etailer prepared to float with a valuation of more than €5bn (£4bn).

February was also the month Stacey Cartwright, former executive vice president of Burberry, succeeded Joseph Wan to become chief executive of Harvey Nichols.

Stacey_Cartwright

Demonstrating the continued rise of online shopping, Boohoo.com became the latest etailer to float on the London Stock Exchange with a value of £560m. The young fashion business raised £300m by placing 600 million ordinary shares with institutional and other investors.

Boohoo

 

MARCH

 

March finally saw compensation awarded to the victims of the Rana Plaza Disaster, the factory collapse in Dhaka, Bangladesh which killed 1,129 people and injured 2,515 on April 24, 2013. From March 24, each survivor or surviving family member received the first tranche of compensation - BDT 50,000 (£386).

Retail bosses hailed mid-March’s sunny weather as a “turning point” for spring trade, as higher temperatures drove customers onto the high street, where footfall was up 8.2% year on year in the week to March 16. Retailers on London’s Bond Street, Oxford Street and Regent Street saw their sales increase 2.4% year on year.

In the same week he acquired an 11% stake in House of Fraser ahead of its majority sale to Chinese investors, Sports Directfounder and executive deputy chairman Mike Ashley sold more than £200m of shares in Sports Direct after investors rejected a planned bonus scheme that would have seen the retail tycoon rake in a share of £72m worth of free stock.

House of Fraser was sold to Chinese luxury department store chain Nanjing Xinjiekou Department Store Co (part of the Sanpower Group) for £480m. Opportunities to develop HoF and replicate its model overseas, particularly China, were key reasons for the deal. HoF chairman Don McCarthy stepped down in September.

HOF

 

APRIL

 

Jo Hooper, head of buying for womenswear, left John Lewis. Credited with much of its recent fashion triumphs, she joined LK Bennett as group product director in November.

Jo_Hooper

Amazon UK continued its bid to become a fashion one stop shop by launching a dedicated sub-store for dresses within its fashion department, carrying brands including French Connection and Lipsy.

Meanwhile, Fat Face called off its planned IPO on the London Stock Exchange, expected to value the company at £110m, blaming “current equity market conditions”.

Fat_Face_store_front_cmyk

 

MAY

 

Dune executive chairman Daniel Rubin was recognised with the Lifetime Achievement Award at the Drapers Footwear & Accessories Awards, on the same night his company was named Multiple Footwear Retailer of the Year. Primark took home the gong for Best Footwear Offer, while the equivalent accessories award went to River Island.

New Look reversed plans to offload a sixth of its 590 UK stores by 2018, choosing to cull just 18 loss-making shops as sales and profits improved. But with New Look in the ascendency, another womenswear chain, Jane Norman, fell into administration for the second time in three years.

 

JUNE

 

Next was rocked by the departure of group product director Christos Angelides, who left after 28 years to become president of US retailer Abercrombie & Fitch. Financial markets reacted badly - Next’s share price fell by more than 3% in 24 hours.

Christos_Angelides

Boohoo.com continued its rapid growth, reporting a 63% rise in revenue to £109.7m for the year to February 28. Pre-tax profit more than tripled to £10.7m, while the number of shoppers using the website increased by 54% year on year to 2.3 million.

Meanwhile, its rival Asos.com was hit by an arson attack at its Barnsley Warehouse, forcing it to stop taking orders at an expected cost to the business of between £6.8m and £8m. A profit warning issued ahead of its full-year results was due to slowing international sales and increased promotions.

 

JULY

 

Stepping down as chief executive of Net-A-Porter, Mark Sebba was labelled ‘World’s Most Loved CEO’ after his staff’s video tribute went viral. He went on to win Fashion Retailing Personality of the Year at this year’s Drapers Awards with founder Natalie Massenet.

Mark_Sebba__CEO_NET_A_PORTER.COM

Matalan sealed the deal on its first London store on Oxford Street. Due to open in spring 2015, the 15,000 sq ft unit will complement high street stores in Liverpool and Cardiff, offering a more trend-led range.

In the same month, Berlin trade show Bread & Butter announced it was spreading its wings to Seoul, South Korea.

Challenging high street conditions and slowing consumer spend were blamed for the collapse into administration of La Senza for the second time in two years. The lingerie retailer’s owner, Middle Eastern retail group Alshaya, lost £65m when a buyer could not be found, while the main supplier, US-based Limited Brands, was also hit.

La_Senza_Marble_Arch_NEW_copy

 

AUGUST

 

Among the big players, Asda overtook M&S to become the UK’s second-biggest clothing retailer by volume behind Primark. However, the supermarket fashion battle heated up as LIDL entered the fray with a value range. JD Sports Fashion launched menswear fascia Open, and Topshop and Miss Selfridge debuted on Chinese etail platform ShangPin.

Industry pressure forced Bread & Butter founder Karl-Heinz Müller to axe his plan to transfer from Berlin to Barcelona for January 2015 - this would have wider repercussions later.

Bread_Butter_Karl_Heinz

Contemporary brand Bolongaro Trevor fell into administration. Jobs were under threat at its five London stores and branches in Leeds, Richmond upon Thames, Nottingham and Birmingham. However, the retailer is still trading from three London stores and Leeds today.

 

SEPTEMBER

 

September was the start of a torrid few months for Tesco. Just weeks after replacing Philip Clarke as chief executive, Dave Lewis was forced to admit the supermarket had overstated its profit forecast for the first half of 2014 by £263m. Four executives, including UK managing director Chris Bush, were suspended, with three more forced out a month later. Former Marks & Spencer chief financial officer Alan Stewart was brought into the company two months early to steady the ship. The Financial Conduct Authority is investigating.

Ras_Al_Khaimah__3_

The future also looked bleak for troubled etailer My-Wardrobe.com after it cancelled all its spring 15 orders and “paused to review its strategic options”. By contrast, multichannel etailer Shop Direct unveiled plans for its first standalone luxury website - VeryExclusive.co.uk - which will carry 100 brands including Marc by Marc Jacobs and Kenzo.

A Hume Country Clothing was the big winner at the Drapers Independents Awards 2014. The Kelso-based store picked up the coveted Independent Retailer of the Year Award, as well as Best Independent Multichannel Operator.

A_Hume_Country_Clothing

Fashion sales in September recorded their lowest performance in more than two years, as warm weather stifled demand. Like-for-like sales fell 2.1% compared with September 2013. The warm weather continued into November, further denting autumn 14 revenues.

John Lewis opened its first railway station ‘click-and-commute’ shop at St Pancras International, where customers can pick up online orders during their commute.

Primark delivered the hammer blow to womenswear supplier Positive Clothing London, which entered administration due to the retailer cancelling its contract following a failed inspection.

Mark Gerald Brafman, founder of now-defunct chain MK One, and his former business partner Bulbinder Singh Sandhu were jailed for acting as company directors while disqualified. Brafman’s charge related to his earlier company, Atlantic Fashions.

 

OCTOBER

 

Shop Direct pre-tax profits jumped 512% to £40.4m for the year to June 30 thanks to soaring mobile sales and the growth of etailer Very, which alone generated sales of £700m.

US Sales day Black Friday took hold of UK consumers in a big way, as retailers slashed prices. Online sales on the day surpassed Cyber Monday by £90m, as shoppers spent a staggering £810m and online traffic rocketed by 60%, year on year. The downside was that some retailers could not fulfil the volume of orders.

 

NOVEMBER

 

Betty Jackson became the first woman to win the Lifetime Achievement Award at the Drapers Awards. Bonmarché and Jigsaw were the other big winners, for Fashion Retail Business of the Year, over and under £125m turnover, respectively.

Lifetime_achievement_award__Betty_Jackson

US denim chain American Eagle outfitters opened its first UK store at Westfield London and JD Sports Fashion sold its young fashion business Bank to a subsidiary of Hilco Capital in a bid to focus on its more profitable fascias.

American_Eagle_campaign_shot2

 

DECEMBER

 

The year ended on a high for Bonmarché with pre-tax profits up 68.1% to £6.4m for the 26 weeks to September 27 as developments to product, pricing and supply chain took hold.

Bonmarche_spring_14

Sports Direct’s Mike Ashley stormed the Drapers Top 100, claiming top spot due to his growing influence over UK fashion retail. In 2014 alone Ashley ramped up his stake in Debenhams, bought shares in troubled Tesco and acquired an 11% stake in House of Fraser.

MiKE_Ashley___CREDIT_GETTY

After weeks of speculation, long-running Berlin trade show Bread & Butter confirmed the cancellation of its January 2015 edition. Meanwhile, fellow Berlin exhibition Panorama announced it would extend its floor space by 43,000 sq ft for the next edition to cope with additional exhibitor demand.

Bread___butter

 

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