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Kidswear is anything but child's play

History has taught me that there is always someone out there who can make money out of the carcass of a floundering business.

But the fact that specialist kidswear group Adams, now renamed Myriad Childrenswear Group, has 12 bidders chasing it after being put up for sale late last year left me spluttering into my coffee. According to our news story this week (page 2) at least two of those bidders intend to run the business as a going concern.

Private equity companies still have a huge amount of cash washing around at the moment. As I understand it, management teams interested in the 330-odd Adams Kids store chain have been pitching it to the money men as a brand with plenty of equity left in it that can be exploited for profit. Maybe they are right.

But for my money anyone looking to run a kidswear clothing specialist on the UK high street should prepare themselves for an uphill struggle. The gap in the market occupied by a business such as Adams is narrowing fast.

This middle-market operator has been continually squeezed, not just on price by the supermarkets at the value end of the sector - that is old news. Now they are increasingly under pressure from fashion-focused family retailers in the middle market, such as Next, New Look, H&M, and Zara. All offer a one-stop shop for mums who want to buy themselves an outfit at the same time as browsing for the kids.

Ask yourself this: what differentiator does Adams have that would persuade a harassed, young, time-poor mum to choose it over any of the above, let alone the supermarkets with their added pulling power of the weekly shop? I do not pretend to know what footfall levels are like in Adams stores, but my guess is that they would not make happy reading.

Successive management teams at Adams have looked to other revenue streams to bolster sales. They have consulted for the likes of Sainsbury's and New Look, both of whom have taken what they needed from the relationship and moved on to steal market share from their former business partner.

Even Mothercare - which is run by a focused, financially astute turnaround management team with the pulling power of an internationally recognised brand name and added expertise in nursery hardware - is still struggling to convince some analysts of the merits of a sustainable growth story in the UK.

A new owner at Adams may be able to cull the underperforming stores, improve the product offer, weed out unnecessary costs, drive sales through better merchandising and squeeze supplier margins to get this business back into the black. If they are very lucky, maybe they will even be able to cook up a convincing sales story to get a second venture capitalist to take it off the first's hands.

But in the long term I see no place for Adams, in its current guise, on the UK high street.Sometimes, as with the likes of Littlewoods, the shopper dynamic changes so radically that the retail market just moves on, leaving a business floundering in its wake. Unfortunately, Adams is one such casualty.

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