As the high street is hit by news of another retail restructure, Drapers takes a closer look at the challenges facing Monsoon Accessorize
Monsoon Westfields White City
Womenswear, childrenswear and accessories retailer Monsoon Accessorize has taken its first step towards restructuring its bricks-and-mortar footprint by hiring professional services firm EY to decouple its dual-fascia Monsoon and Accessorize stores over the next five years.
In a complete change of strategy, the retailer – which launched Accessorize in 1984, a decade after the original Monsoon fascia – is gradually doing away with its hybrid store concept and will not renew the leases on 141 stores. However, it is thought the firm will seek to open separate Monsoon and Accessorize shops, redeploying most of the staff, so the number of job losses will be minimal.
One property source indicated Monsoon would have “no problem” finding takers for the store estate as its shops are in prime locations and are a good size.
However retail analyst Richard Hyman is less positive: “[Having too many stores] is something affecting most retailers. The last thing high streets need is more space. The majority of fashion players already have too much space and there isn’t an abundance of people to sell [leases] to. From a property point of view, it’s a huge problem.”
Michael Weedon, content editor at retail analyst Local Data Company, agrees the closures could add to the uptick in retail vacancy rates in the UK: “July saw a reversal of a long-term trend towards fewer empty shops. A 0.1% change is not particularly significant, but the underlying causes were a fall in the number of new units by 3.5% and a 44% drop in the number of vacant units getting new occupiers. Maybe this is what Brexit uncertainty really looks like in numbers.”
Rather than property, Hyman argues that product is the main issue facing Monsoon, which he says has been using Accessorize as a crutch to support sliding sales at the business: “Accessorize has been compensating for Monsoon’s weak performance and recently it has had to run faster to stand still. It’s less to do with rearranging the deckchairs but changing the design of them at Monsoon.” The business made a loss after tax of £617,000 for the 52 weeks to 29 August 2015, down from an £18.4m profit the year before.
Hyman continues: “[Monsoon] has been looking tired for a while now. I think the real challenge is how to reinvent the brand, as it is so stylised. When you look at some brands – such as Monsoon or Jack Wills – they have a very rigid handwriting compared with others that are much more flexible and able to change. Monsoon doesn’t lend itself to reinvention – it’s a real challenge for the brand. It’s an unforgiving market: there are far too many players and not enough spend to go around.”
Nivindya Sharma, senior analyst at Verdict Retail, agrees that Accessorize is the stronger of the two brands: “Monsoon has been in trouble for a while. It has become more and more apparent that Accessorize is doing well, but Monsoon has lost its way.”
She adds that the womenswear fascia needs to be clearer about its target market: “The company put the two stores together as it thought the brands had synergy, but the businesses have evolved very differently. Monsoon has a much older customer base, while Accessorize has become young and trendy.
“Monsoon’s product isn’t necessarily the problem in terms of quality or design, but it is not communicating who the product is targeting. The stores are on high streets where young, trend-led shoppers go – that’s not where Monsoon shoppers go. The strategy could work out, but it is a massive investment issue and it’s not good for consumer confidence in the current market.”
There is increasing competition on the high street and added pressure from the uncertainty caused by the UK’s vote to leave the European Union. Management will hope that unshackling Monsoon from Accessorize will set both businesses free to succeed on their own terms.
The Local Data Company database shows that the business has 235 stores listed as Accessorize and 154 listed as Monsoon.
High street 148
Shopping centre 202
Retail park 18
Greater London 65
East of England 49
West Midlands 27
East Midlands 20