Women’s young fashion chain Jane Norman has drafted in accountancy company PricewaterhouseCoopers (PwC) to assess the “operational efficiencies” of the business, three months after one of its major shareholders, Baugur, went into administration.
An accountancy source said PwC would assess the entire Jane Norman business, looking at how to strengthen the retailer’s operational structure, and how to get a better handle on costs.
“The process involves looking at how the business is running,” he said. “Questions will be asked, like are there too many stores? Are there too many staff? Are people ordering and buying in the right way? Are they applying the right processes?”
Sources in the market told Drapers that Jane Norman had experienced difficult trading in recent months and that its ranges had moved away from its traditional handwriting towards a more “sophisticated customer”, which had compounded its woes in the current climate. It has also faced issues with credit insurance and has had a 50%-off Sale on for more than four weeks.
Jane Norman has also faced uncertainty about its future ownership as 80% of its shareholding was held by businesses connected to Iceland, where the banking system collapsed.
Investment firm Baugur fell into administration in February, as did its subsidiary BG Holding. It is unclear which part of Baugur held the stake in Jane Norman, and it remains unclear who is in control of that stake at this time.
In addition, Icelandic bank Kaupthing had another 40% stake in the chain. Kaupthing was taken over by the Icelandic government in October.PwC was drafted in at the request of the Jane Norman management team, not by Kaupthing or other banks which have links to the business.
Jane Norman chief executive Saj Shah confirmed that PwC was assessing the business, but declined to comment further. He said: “We absolutely have not hired PwC to look at strategic options, but we have asked them to confirm the operational efficiency of the business.”
Last month, Jane Norman trading director Sandy Goldsborough left the company after just six months in the role. Goldsborough was originally hired as an eventual successor to Shah, who plans to retire in the next five years after 33 years with the company. Jane Norman is not thought to be looking for a replacement for Goldsborough.
Reports this morning suggest that Jane Norman has also hired corporate advisory boutique Hawkpoint to assess strategic options for the chain.
Pre-tax profits at the retailer were flat over the year to March 29, 2008 at £26 million and sales increased by 13% to £150m. According to accounts filed by Companies House EBITDA was also flat at £30m.
PwC declined to comment.