Sheepskin boot giant Ugg Australia has axed its multimillion pound account with young fashion chain Bank as part of a broader strategy to take the brand more upmarket.
Ugg’s US parent Deckers took back control of the UK market from UK and Republic of Ireland distributor AMG last month and is understood to be culling a string of accounts while also raising prices. Retail prices on classic styles have gone up by between 10% and 15%, though some of the rise is said to be due to increased manufacturing costs.
According to one retail source, Ugg has also introduced a clause into its contract with stockists limiting them to selling the brand purely via their own store websites and not via third-party platforms.
Deckers is also said to be doing more thorough credit checks on all of its stockists than AMG did.
Bank, which has more than 70 UK stores and is owned by JD Sports Fashion, is the biggest victim of the cull so far.
Ugg is its biggest-selling footwear brand and is believed to generate retail sales of £10m. Its wholesale orders are thought to have averaged £4m a year. Spring 11 will be the last season it will be allowed to stock Ugg, and Bank is said to be “devastated”.
Bank was unavailable for comment.
The end of Ugg’s agreement with Bank has sparked fear and anger among some stockists. It has about 225 accounts and last year won Brand of the Year at the Drapers Footwear Awards after saving Christmas 2009 for many footwear retailers. “It has sent shivers down my spine. Ugg is a big seller for us,” said one.
A source close to the situation added: “Ugg is saying, ‘We are moving upstream, but you, our stockists, are no longer good enough for us to come upstream with us’. It is a foolish, naive and arrogant step considering the company [Deckers] has never done direct business in the UK yet.”
However, other stockists welcomed the move. David Weeks, buying director at young fashion indie mini-chain Xile, Ugg’s biggest independent account in Scotland, said: “Ugg could do with getting rid of a few accounts. They’re overstocked. I’m not worried.”
Deckers’ review of Ugg’s stockist base follows several high-profile departures at Deckers. Evan Mason, European vice-president, left at the end of the December, at the same time as UK general manager David Ward, who had been at the company for just six months.
Deckers was unavailable for comment.