Just about everyone I speak to in the industry at the moment preludes our conversation by sighing and making some sort of “it’s tough out there” comment.
This encapsulates the state of the fashion market right now for 90% of businesses following the freak weather of early spring and continued lack of consumer confidence in the UK’s financial recovery, and indeed the Government. So when York premium indie Coggles - a former darling of the sector - announced it was appointing administrators this week it wasn’t the shock it might have been a couple of years ago.
But what went wrong? At the end of 2011, Coggles was voted by its fellow indies into the top spot on the Drapers most Inspiring Independents list. For years before that (it launched in 1974) it had been at the top of its game, with a reputation for nurturing new brands and stunning visual merchandising in store. More recently it had launched internationally online and grown its profile, punching well above its weight in PR terms, and winning a £3m investment from Pentland Group in 2011 to drive expansion.
This investment bought Coggles a bigger team, a London office and a bespoke ecommerce fulfilment centre - and chief executive Mark Bage reports annual turnover had reached £8.1m with 125,000 customers, 40% coming from overseas.
However, he also admits the last two quarters of trading have been “the toughest I’ve seen in the industry” and with more investment (needed to take the company to the next level to fulfil on the global stage) not forthcoming, Bage has this week had to give in to the inevitable.
There are a number of issues here worth noting.
The first is the investment being used to so dramatically grow the business outside its comfortable northern base. Growing online brings with it expensive logistics and fulfilment costs that a single boutique is simply not able to handle. So, in effect the business leaps from one shop to international retailer in one step - difficult in the good times, let alone a recession. I would also argue that the decision to open an expensive London office and begin launching new categories, such as bicycles, may have caused Coggles to lose focus.
It’s easy to lose touch with your core customer as you grow, especially when new customers are all over the world. It seems to me that Coggles tried to push through this phase just as most of the sector hit its toughest trading ever, and nervous investors withdrew interest.
I hope Coggles finds its way again with a buyer or new investor, that the brands involved are not left out of pocket and the people behind Coggles get the support they need. We do love to build someone up and knock them down in Britain, but Coggles certainly shows that no one is safe at the moment, and I wouldn’t wish this kind of situation on anyone.