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Review of the year 2014: The winners and losers

As the year draws to a close Drapers looks at the fashion businesses that have succeeded and struggled during 2014.

The winners

JD Sports

The sports retailer has acquired a number of business this year including Leeds menswear independent The Hip Store in May, and Yorkshire indie Mainline Menswear in April.

It also successfully sold its struggling Bank fashion fascia to private equity investor Hilco in November.

The retailer, which reported profit before tax and exceptional items had doubled to £19.9m for the 26 weeks to August 2, also launched its new menswear fascia Open in the same month and is continuing to roll out this concept. It now has 11 stores.

John Lewis

John Lewis has retained its dominant presence on the UK high street this year, showing strong growth across its fashion offering and a continued focus on new technology and multichannel.

Sales at the department store grew 9.4% to £1.87bn in the first half of the year to July 26, with like for likes up 8.2%. Its operating profit increased by 62.2% to £56.3m. Fashion sales were up 9.1%, with online fashion sales 33.9% up. The retailer’s multichannel focus enabled it to capitalise on the Black Friday and Cyber Monday Sales surge, leading to a record week of sales online.

The department store retailer also opened its first click and commute store in London’s St Pancras station in October.

Sports Direct

Sports Direct has had another stellar year and earlier this month reported that its underlying profit before tax was up 9.8% to £160.6m in the 26 weeks to October 26, as total sales increased by 6.5%.

Owner Mike Ashley, who led Drapers Top 100 most influential people in the industry earlier this month, ramped up his stake in Debenhams in October with a put option agreement that effectively left him with a 6.1% stake (he held 4.1% previously), while rolling out four concessions within the department store chain. Similarly, a £43m put option saw Sports Direct take the equivalent of a 0.3% stake in Tesco in September, and Ashley is expected to retain his 11% stake in House of Fraser, following the sale of the remainder of the business to Chinese conglomerate Nanjing Cenbest, controlled by Sanpower Group.

Bonmarche

Bonmarché has continued to outperform as its over-50s shoppers recognise the turnaround in the once-struggling retailer and appreciate the more trend-led focus of its ranges. The retailer announced a 68.1% rise in profit before tax to £6.4m for the 26 weeks to September 27. Total revenue was up 11.8% to £91.1m for the half, while store like-for-like sales increased by 7.8%.

The over-50s retailer also relaunched the Ann Harvey brand in stores in July and is now trialling menswear in 50 stores.

Primark

Primark has shown unstoppable growth during 2014, with sales up 17% to £4.95bn at constant currency for the full year to September 13, while like for likes increased by 4%. The value retailer’s operating profit increased 30% to £662m at constant currency and operating profit margin was 13.4%, compared to 12% in 2013.

It opened its first stores in France this year and announced grand plans to expand into the US next year. Back in the UK it added 1.4m sq ft of selling space this year, relocating three stores, extending three stores and opening stores in 25 new locations. The estate is now seven times larger than in 2000 and comprises 278 stores and 10.2m sq ft of selling space.

Next

Next continued to surge this year demonstrated by its pre-tax profit rise of 19.3% to £324.2m in the six months to July. The retailer said it had “experienced its strongest sales growth for many years” as it reported total sales grew 10.3% to £1.85bn in the period, with revenues growing 7.5% across stores and 16.2% across its online directory. Profits for the retail arm grew 22.6% to £152.3m and the Directory grew by 10.2% to £172.1m.

However, it was one of many retailers that suffered a knock during the unseasonably warm autumn when it reported in October that it had cut its full-year profit guidance by 3% to £770m after sales in the third quarter rose by 5.4%, rather than the forecast 10%.

Shop Direct

Shop Direct had a phenomenally strong 2014, reporting a pre-tax profits jump of 512% to £40.4m in the year to June 30, led by impressive mobile sales and growth at Very.co.uk.

Profit before tax and amortisation more than doubled to £64.6m as group sales increased by 3% to £1.74bn. Very.co.uk has now become the biggest brand in the group with sales soaring by 23.1% to more than £700m. However, sales at Littlewoods.com and KandCo.com dropped by 7.6%.

Some 84% of sales across the group were completed online during the year, compared to 78% last year and 44% of online sales were made using mobile devices, up from 27% in 2013.

Inditex

Inditex’s sales climbed 7% to €12.7bn (£10.1bn) in the nine months to October 31, with sales for the Zara, Massimo Dutti, Pull & Bear and Stradivarius owner up 10.5% year on year. Like-for-like sales growth during the period were simply said to be “strong”.

The group created a staggering 8,500 new jobs during the last year, lifting its global headcount to 133,400. It also opened its first Stradivarius store in the UK – at Westfield Stratford in London – in August.

Jagear

Jaeger demonstrated a solid turnaround this year as it reported a 10% rise in like-for-like sales for the year to March 1. Total sales rose 12% to £79.4m for the full year while losses after tax narrowed to £9.9m from £12.6m the year before. Gross profit increased to £44.4m from £41.6m.

The retailer is one year into a five-year turnaround strategy designed to refocus on its British heritage and rebuild its brand appeal through initiatives such as reintroducing quality fabrics, investing online and revamping stores.

Losers

Tesco

Most Tesco senior executives would likely rather forget the troubled second half of this year. After the start of new boss Dave Lewis in September, the supermarket giant was forced to reveal it had overstated its profits by £263m later that month.

A slew of executive have since left the business and Tesco issued a profit warning in December stating that its group trading profit for the financial year ending February 2015 will not exceed £1.4bn, as it takes steps to implement new strategies to stabilise the business in the wake of the scandal.

Asos.com

Asos has had a tough year this year, which resulted in three profit warnings – the latest in September in which the etailer revealed its annual pre-tax profit is expected to be £45m, compared to previous expectations for £62m in the year ending August 2015.

It also suffered from a fire at its main warehouse in Barnsely in June, which the police suspected was arson, and led to autumn 14 delivery delays.

La Senza

Lingerie retailer La Senza entered into administration for the second time in two years in July, appointing Pricewaterhouse Coopers to manage the process affecting its trading company Marnixheath Limited.

The retailer’s 55 stores were all closed after a buyer did not come forward for the business, and Middle Eastern retail group Alshaya, the franchise owner of La Senza in the UK, is understood to have lost £63.4m following the administration.

Mulberry

Mulberry’s turnaround struggled this year as the brand revealed earlier this month that revenue had dropped by 17% to £64.7m for the six months to September 30, while profits nosedived from £7.2m in 2013 to a loss before tax of £1.1m, due to slowing sales, lower gross margin and the cost of new store openings. The British heritage business said retail sales were down by 9% to £45.1m, while wholesale revenue was down 31% to £19.6m for the period.

Internacionale

Fast fashion womenswear retailer Internacionale UK collapsed into administration in February, affecting around 1,000 jobs. The retailer had 89 stores which were closed and then sold off to other retailers including Select.

My Wardrobe

Premium etailer My-Wardrobe.com revealed in September that it was “currently pausing to review all strategic options” after having cancelled all of its spring 15 orders. It continued to sell autumn 14 stock via its site.

May Trading

May Trading UK, clothing supplier to high street multiples including Primark, Next and Topman, collapsed into administration in October after millions of dollars were allegedly stolen from its Bangladesh factory. May Trading’s sister company MA Hong Kong also went into administration. Both companies were subsequently acquired by global supply group Li & Fung in December and now sit alongside LF Europe’s private label European Apparel Group (EAG).

Positive Clothing

Primark supplier Positive Clothing London went into administration in October after the value retailer cancelled its contract. Drapers understands Positive Clothing was using a UK factory – the location of which has not been disclosed – that failed to meet a Primark inspection.

Mamas & Papas

Nursery retailer Mamas & Papas announced in August  it planned to cut costs across its UK store portfolio using a Company Voluntary Arrangement (CVA).

The package of measures, which included rent reductions of up to 50% across 30 stores, was approved by 95% of creditors in September.

Jane Norman

Jane Norman placed its high street stores into administration in June as it sought to focus on building the business through online and international concessions.

It was the second time the womenswear chain had gone into administration in three years and the move effected all 24 stores in the UK and Ireland.

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