The sale of Hobbs to Phase Eight and Whistles owner TFG London provides a glimmer of light on an otherwise gloomy high street in the run-up to Christmas.
Hobbs has turned a corner under Meg Lustman, who was appointed as chief executive in 2014 and tasked with improving its fortunes. Earlier that year, former owner private equity firm 3i had been forced to write down the value of its investment in Hobbs by 40% following a period of poor trading.
Lustman joined with more than 20 years of experience under her belt, including almost a decade as chief strategy officer for Mosaic Fashions (which later became Aurora), three years as managing director of Warehouse and a fixed-term stint as fashion buying director at John Lewis.
She instigated a two-year turnaround programme at Hobbs, during which it shut some stores, streamlined its head office, improved its product and explored international expansion. It seems to have worked – last month, Hobbs posted a rise in sales and gross profit for the year to 28 January 2017. This is particularly notable given the tough climate for mainstream womenswear brands, as evidenced by the troubles of Jaeger, Jacques Vert Group and Basler.
Before, Hobbs didn’t fully understand who its customer was, or what she was buying – now, it is making much better use of data to track the customer journey. It knows to focus on workwear, coats, footwear and good-quality casualwear with a touch of personality, rather than overtly trend-led items.
Hobbs fits neatly into the TFG London portfolio. Since the start of 2015, the UK arm of South African retailer The Foschini Group has acquired occasionwear-focused Phase Eight, contemporary women’s and men’s wear retailer Whistles, and womenswear brand Damsel in a Dress. Hobbs sits comfortably alongside them as a well-known British retailer that specialises in classic womenswear.
As Black Friday approaches, the mood on the high street is fairly glum. Non-food retail sales slumped in October, consumer confidence remains low, and even Next, which for so long bucked the trend of falling high street sales, has issued a worrying warning that its fourth-quarter performance is likely to disappoint. Meanwhile, over the past week Drapers has learned of looming redundancies at Arcadia Group and Mothercare.
But for Hobbs at least, the future is looking rosier. TFG London appears willing to invest in UK high street retailers, and with its backing Hobbs will be able to pursue its international ambitions. TFG’s decision to welcome Hobbs into the fold should add a tailwind to Lustman’s turnaround.