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Viyella 'must pair up' to survive

Womenswear brand Viyella will have to be teamed with a partner brand to make it profitable, say analysts, after it was put up for sale this month.

After several approaches in the past few months, owner Harris Watson has appointed financial adviser SP Mergers to look at options for the company. It bought Viyella in 2003 for a reported £2.5 million from entrepreneur Richard Thompson.

But Seymour Pierce analyst Richard Ratner said Viyella would be "difficult to value" because it had not yet made a profit. He added that to make economic sense, it would need to be combined with another brand to share costs.

Harris Watson joint owner Susan Watson told Drapers the group had successfully refocused Viyella on its core market, aged 55 to 70. "We have got it back to its established customer base instead of chasing younger women, which was a mistake," she said.

The retailer has annual sales of about £30m and made a loss of £500,000 in the year to the end of March. Sales this year are forecast to be close to £28m, after the company closed seven less profitable outlet stores, but it is expected to break even.

Viyella has 40 standalones, 64 concessions and four clearance outlets, and has opened another six standalones in the past year. Watson said there was potential for a further 20, with six more openings planned this year. It is also looking at selling online.

Investment group Harris Watson's other labels include knitwear brand Lyle & Scott. Watson said Lyle & Scott had received approaches several months ago, which it had turned down.

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