Karen Millen needs to focus on online opportunities to turn around its losses, the brand’s founder and namesake believes.
Speaking to Drapers following the departure earlier this month of chief executive Mike Shearwood’s, Millen said she was “saddened” by the direction of the retailer since she and her ex-husband, Kevin Stanford, sold a controlling stake to Icelandic investor Baugur Group in 2004.
“Karen Millen was built on a customer that enjoyed strong tailoring,” she said. “A confident woman that enjoyed a busy life both in the workplace and socially, and who was not dictated to by fashion trends. What I see today doesn’t reflect this at all.”
Millen, who established the company in 1981 and is engaged in an ongoing legal battle over its use of her name, continued: “I believe the biggest opportunity for Karen Millen since my departure is online, however, for some reason this opportunity has not been realised. There has been too much focus on growth rather than profit.
“The opening of two very ambitious flagship stores in London and New York [both in April 2014] was premature when the brand’s repositioning had not been fully tested. The cash invested in these loss-making flagships would have been better employed in developing the online opportunity.
“I believe that for Karen Millen to prosper, it needs to start thinking like an etailer rather than the conventional retailer with a website on the side.”
Shearwood left on September 4 after the board decided not to sell the business – he had hoped for a management buyout. He had been at the helm of Karen Millen since 2007. Chairman Neil McCausland is now working with the management team to steer the company until a new CEO is appointed.
Millen and Stanford sold a majority stake to Baugur Group in 2004 with debt finance from Icelandic bank Kaupthing, but retained a minority stake. Following the Icelandic banking collapse in 2008, the group was restructured and, since 2009, the business has been majority owned by Kaupthing, with Millen losing her stake.
Millen said she would “very much like” to return to the business if the opportunity arises, but she has not spoken to anyone at Karen Millen or Kaupthing about it for some time because of the legal dispute.
The dispute centres on her belief that the company is trying to use her name beyond what was agreed at the point of sale in 2004, while at the same time trying to block her from returning to the market.
In its most recent trading update, Karen Millen revealed that efforts to relaunch the brand and make improvements to its marketing strategy caused pre-tax losses to double to £6.1m in the year to March 2014. Sales dipped from £259m to £256m. It has 72 stores and concessions in the UK and 234 internationally.
The retailer declined to comment on Millen’s views.