Mike Ashley’s Sports Direct has acquired lifestyle retailer Jack Wills for £12.8m. What will it take to revive the flagging business?
Rewind to the early 2000s and you couldn’t move around a UK university campus without seeing the Jack Wills logo. Known for its preppy style – think hoodies, rugby shirts and cable crew jumpers – it was once the brand of choice for well-heeled young shoppers.
The British fashion chain has since lost its lustre, struggling to keep pace as consumers’ tastes have changed. It made a pre-tax loss of £29.3m on turnover of £129.3m in the year to 28 January 2018.
Founder Peter Williams, who started the business in 1999 aged just 24, was ousted this time last year following a row with previous private equity owners BlueGem Capital Partners. Former Debenhams executive director Suzanne Harlow took over as CEO in September.
It has now been acquired by Mike Ashley’s Sports Direct for £12.8m. All 100 Jack Wills stores in the UK and Ireland, as well as its distribution centre, will be transferred to Sports Direct, along with its 1,700 employees.
This was surprising news, coming so soon after Sports Direct admitted that it regretted buying House of Fraser, after discovering problems at the business were “terminal in nature”. Apparently, that hasn’t dulled the group’s appetite for acquisition. It is said to have been locked in a bidding war for Jack Wills with its equally acquisitive rival, Edinburgh Woollen Mill Group.
Making the Jack Wills’ product proposition chime with customers again is the big challenge facing Sports Direct.
Williams started with a vision for a brand that drew on university spirit and British heritage – a home-grown alternative to the collegiate appeal of Ralph Lauren and Tommy Hilfiger. Both those brands have been able to draw on their long heritage and tap into 1990s nostalgia to stay relevant to customers, but Jack Wills has struggled to replicate their success.
The retailer describes itself as “intrinsically charming, endlessly optimistic and unapologetically British”, but is struggling to convince customers of its charms. Harlow has been focusing on improving the product since she joined, but the key issue is that today’s 16-to-24-year-olds have turned away from a preppy, heavily branded look, and instead prefer edgier, more fashion-forward styles. Jack Wills is faced with something of a conundrum: how will it update its look to appeal to today’s shopper without losing the handwriting that is so integral to its identity on the high street?
Price is another potential hurdle. Jack Wills sits towards the top end of the high street. Hoodies retail for £59.95, T-shirts for around £20 and dresses from £34.95 to £69.95. Today’s customer is price sensitive, but higher prices are not necessarily a problem if they are justified by the quality and design details. Jack Wills, however, is clearly struggling to get customers to splash out on its products. At the time of writing, many items on its website are heavily discounted, some by up to 70%.
Analysts are also questioning if Sports Direct has the time and resources needed to revive Jack Wills when it is already fighting some considerable fires at House of Fraser.
“Although Mike Ashley has given Jack Wills a much-needed lifeline, he already has far too much on his plate to make the ailing lifestyle brand a priority and implement a successful turnaround strategy,” argues Pippa Stephens, retail analyst at Global Data. “While Ashley recently admitted that he regrets purchasing House of Fraser, significant time and money are still required to resurrect the failing department store retailer, making it the focus if Ashley is to retain his self-penned ‘saviour of the high street’ label.”
She adds: “Jack Wills needs to be substantially revamped if it is to revive its desirability, win back shoppers and establish a new loyal customer base. Without sufficient investment in modernising ranges and improving the in-store experience, we expect it to continue to struggle in today’s competitive youth segment.”
Stephens raises some salient points. The increasingly sprawling Sports Direct has its hands full after its recent buying spree, and more does need to be done to improve the Jack Wills shopping experience. The retailer has fared poorly on recent editions of Drapers’ secret shopping series Hit or Miss, which ranks the high street. Jack Wills drew criticism for poor visual merchandising, stores dominated by discounts and limited product offer. However, it has scored points for the overall design of the stores, which stand out on a bland high street.
Jack Wills did once hold a place in customers’ hearts. It will take time, effort, investment and a clear focus on product, price and proposition to get back there.