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Wade: depressed market is ripe for branded acquisitions

Three years after he sold Boxfresh, the streetwear brand he founded, to Pentland Brands, Roger Wade tells Drapers why he thinks now is the right time for him to get back into the branded wholesale market

You’ve been involved in the young fashion business for more than 20 years but moved into consultancy after selling Boxfresh three years ago. What’s next on your agenda?

I specialise in buying or selling brands and doing licensing deals on behalf of clients [via consultancy firm Brands Incorporated]. But I’ve now put together financial backing of £10m and we are looking to buy brands and licences ourselves.

The economy is challenging. What’s prompted your interest in brands?

I feel there are a lot of brands out there that have got lots of potential but just don’t have the finances to grow. My speciality area is growing a brand from scratch, say from £1m turnover to £10m and then selling it on. I have the backing to buy a brand or two now and to develop them. But I want to do it in a different way, focused more on brand management rather than day-to-day trading. I’m going to own the brand but will license it out to partners.

Why do you think now is the right time to make a purchase?

Trading conditions are so tough a lot of brands are struggling. If they go through a traditional financial route, through a venture capitalist, [that type of investor] will only be interested in the balance sheet and profit and loss. I’m interested in brand equity and the value of branding.

Have you come across any brands you’re interested in?

I’ve made enquiries into a couple of brands. The price has got to be right and the prices weren’t right. Young fashion is my speciality but I’m not just limited to that. The important point is I’m not just looking for a start-up, I’m looking for an established brand that may have fallen on hard times, and I just want to buy the brand name not the infrastructure. But brand recognition is key.

Where is the financial backing coming from?

I have wealthy private individuals backing me.

Will we see more acquisitions in 2010 ?

There has been a lot of activity out there, for example JD Sports Fashion has been very active (last month it bought Sonneti from WDT). But other deals have gone under the radar. There’s a lot more brands that have done deals or been sold than people realise.

Is the current market situation leading to more merger and acquisition activity?

I think the market is cyclical. When conditions are depressed there are more people that need to sell their assets and more people that want to pick brands up at a good value price. When the market is doing well though, there is also more money in the system and people are willing to pay higher prices for assets.

My general rule is I don’t want to be involved with politics; I just want to get on with day-to-day trading. This planned increase in capital gains tax will stifle British business though. In these conditions we should encourage people to invest in companies and people are not going to if taxes are higher.

With all the costs pressures increasing, what do you expect to happen to pricing?

It’s a competitive environment and so brands have got to be competitive. There’s less disposable income out there so brands will have to discount their product. Just like it’s a good time for me to buy a brand it’s a good time for consumers to buy clothes. If you’ve got a good product and a good image at the right price, then shoppers will spend.

What is there in the market that is exciting you?

Everyone has been very safe. I just wish there was a feeling of ‘let’s bring in something new’ or a willingness to champion something new [in terms of product and trend]. It’s hard to champion new things. People just want the same bestsellers. I think it’s quite important to have the spirit of trying to find the latest new brands. Asos is doing a good job and so is Sarah Coggles in York, but I’d like to see more support for young [design] talent.

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