Last week two of the UK’s well-known young fashion multi-brand chains suffered crippling blows, with Bank falling into administration and Sports Direct on the verge of closing a third of its USC stores. But does this mean we’ve we fallen out of love with multi-brand retailers?
The middle market has long been squeezed between retailers choosing to splurge or scrimp on fashion. The luxury market has boomed, as people invest in quality, timeless pieces. Meanwhile Primark, H&M and other value retailers have cleaned up. Consumers increasingly opt for retailers’ own labels that have improved product quality and style, while remaining relatively price-competitive.
Similarly the influx of young fashion retailers from the US including Abercrombie & Fitch, Hollister and American Eagle have stolen some of the thunder from our multi-branded stalemates.
Good multi-brand stores need just that - several strong brands with healthy sell throughs - to survive and succeed in a tough market. If you don’t consistently have the right brands, you won’t survive.
For Bank, the writing was on the wall for a long time. It was reliant on the host of external brands it stocked rather than its own reputation. Many of those brands exited the retailer over the years, and the few that were left are readily available elsewhere on the high street.
USC has also battled with brands opting out of its chain of stores. In October Drapers revealed that Diesel, one of USC’s biggest labels, had decided to pull out after 15 years, with spring 15 its last collection. At the time Diesel said it was moving to “more premium” stockists.
Discounting is a major issue for suppliers and has undoubtedly contributed to the demise of both Bank and USC. In May some brands expressed anger at USC for reportedly stockpiling clothing after buying large quantities at discounts of up to 50%. They also accused USC of moving towards a mass-market offering akin to a “fashion Sports Direct”.
Even the mighty Asos has been criticised by its suppliers over discounting and “unfair” delivery penalty charges. Simply put, antagonising your suppliers and devaluing their brands is a recipe for disaster.