Drapers looks behind the Agent Provocateur sale and finds out what it might mean for the firm’s future.
Agent Provocateur spring 17
In the end it was not Sports Direct that bought Agent Provocateur, as rumoured, but rather Four Holdings, the parent company of fashion agency Four Marketing, in which Sports Direct has a 25% stake. And the parties seemed keen to make the distinction: Sports Direct issued a statement saying it was “fully supportive” of the acquisition, but emphasised that it did not own Four Holdings outright. Yet the deal has Sports Direct boss Mike Ashley’s fingerprints all over it.
Ashley has been vocal about his ambition to move Sports Direct group upmarket, discard his “pile them high and sell them cheap” mantra and become the “Selfridges of sports”. Four Holdings’ acquisition of Agent Provocateur comes a month after Sports Direct bought an 11% stake in upmarket high street chain French Connection.
By supporting this latest deal, Ashley has moved a step closer to achieving his goal.
“Sports Direct is being more targeted in its approach,” agrees one source close to the situation. “Ashley is being more selective and strategic rather than buying anything that’s cheap. He wants more premium brands for USC and Flannels.”
Some observers note that Agent Provocateur would likely appear in Sports Direct-owned premium retailer Flannels, and possibly even its traditionally more young fashion focused chain USC. Flannels already stocks some of Four Marketing’s more upmarket brands, such as Stone Island and CP Company.
“If that’s the plan, they may find it difficult,” warns David Finlayson, director at one of the UK’s biggest lingerie agencies, Asset Project Management. “It’s not as easy you think to sell lingerie in clothing stores – you need dedicated staff with the correct knowledge and fit expertise.”
He points out that a lot hinges on who is brought in to run Agent Provocateur. Gary Hogarth stepped down as chief executive of Agent Provocateur in February 2016.
“Everyone in the trade has been watching closely to see what might happen,” says Finlayson. “If they keep the same team in place and the same designers, they can protect the integrity of the brand.
“Agent Provocateur treads a precarious line, as it needs to be well designed and luxurious but still retain its commercialism, so they need the right people in place. It is an unusual pairing but Mike Ashley is not a stupid man. He knows what he’s doing.”
Last year, Ashley said moving to a more premium position was “the future of Sports Direct”, but admitted it could take up to nine years to change the way the business works. However, given the pace at which his empire is expanding, this vision of the future could arrive much sooner.