The main topic of conversation within the fashion trade this week was the news that Aquascutum had been placed into administration and the majority stake in its sister brand Jaeger sold off to venture capitalist Jon Moulton’s firm Better Capital.
Aquascutum was bought in 2009 by British Fashion Council chairman Harold Tillman. At the time of Tillman’s purchase, following the acquisition of Jaeger in 2003, the two businesses were already struggling - the group was reporting losses in the region of £24m - but both had the heritage and potential that has subsequently led others in a similar part of the market, such as Burberry, to become global superpowers.
As a private company with no public financial reporting, much of what went on internally in the intervening years can only be speculated at, but certainly the last set of results posted for both businesses (up to February 2011) show a challenged operation, with a £1.4m drop in pre-tax profits, although part of this Tillman said at the time was due to exceptional costs associated with renegotiating some of the overseas licensing agreements for Jaeger.
Tillman subsequently spoke in general terms of a “very difficult year” in the UK in 2011, not helped by the weather, which for Aquascutum in particular - relying on outerwear - must have been especially tough. My understanding is that underlying this weather-related blip was a more serious issue related to the brand’s licensing abroad - indeed, YGM Trading owns the Aquascutum brand outright in Asia, where many luxury brands earn most of their money. With a stagnant UK market, a lack of international income and arguably a brand that didn’t quite stand up to its rivals in terms of consumer awareness, Aquascutum must have become a huge drain on Tillman’s resources.
You could see from Aquascutum’s celeb-studded London Fashion Week show where Tillman wanted it to be, but it had not reached the heights needed to attract the aspirational and tourist spend that is so vital in the UK luxury market.
Jaeger was reputedly doing better, although in Drapers’ own Hit or Miss survey the proliferation of Sale items in-store often let it down. There was concern that the mainline was overpriced compared with the consumer perception of the brand. What remains to be seen is the fate of Aquascutum. Names bandied around as prospective owners include YGM, but also names as diverse as JD Sports Fashion, Debenhams and House of Fraser.
Either way, most feel this is not the end for Aquascutum in the UK, although they agree that the business will have to change almost completely in terms of structure if it is to survive, and that can only be good news for its staff and suppliers.
- Drapers editor-in-chief / email@example.com