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Sales rise at Jack Wills, but warehouse outsourcing hits its bottom line

Jack Wills’ turnover grew 2.1% to £132m in the year to February 1, but its operating losses widened due to teething problems with the outsourcing of its distribution centre.

The preppy young fashion chain’s pre-exceptional EBITDA increased by 12.5% to £8.1m. However, it made an operating loss after exceptional items of £8.8m, compared to £5.8m the year before.

Peter Williams, who co-founded Jack Wills in 1999 and was reappointed as chief executive in August after a two-year break, told Drapers the business decided to outsource the operation of its distribution centre in Greenford, west London, in 2014 to support its domestic and international growth.

But the transition “wasn’t seamless”, he said, and sales suffered as it struggled with fulfilment, particularly during the key Christmas period.

“The experience was painful for the business, there’s no getting away from that. That’s now behind us and business is good. Turns out, talking to people with grey hair in this industry, everyone goes through it once.” He declined to give further details on who they outsourced to and what went wrong.

The centre is now running smoothly and work has been done to upgrade the rest of the company’s infrastructure, including the back office functions, till systems and logistics.

Most of this was done while Wendy Becker was CEO. Becker, whose CV includes stints as group chief marketing officer at Vodafone and managing director at TalkTalk, joined Jack Wills in 2012 as chief operating officer and took over the reins from Williams a year later in 2013. As majority shareholder, Williams maintained a non-executive position on the board.

He explained that, by 2013, he was ready to take a step back: “A relatively small, founder-led business runs on instinct, and a big global business runs on process - and I started to question whether I had the right skills to run a business that was more process-driven.

“And, having had 15 years at the coalface I was knackered. It’s a pretty relentless thing, running a business; especially a retail business, which is seven days a week, 365 days a year. There’s always something going wrong somewhere in the world.”

At around the same time, the board began to explore the option of an IPO; however, this summer, it concluded this would not be right for the business in the medium term. “It’s just not what we want to do,” said Williams. “That led to Wendy standing down and I’m now back. There was nothing sinister to it; there was no master plan, it just happened.”

His focus now is on Christmas trading. “It was very challenging last year because of the distribution centre. That’s now running absolutely fine. It had its largest ever throughput last week or the week before and I was there; it was a sea of calm. That was a relief. I’m feeling really excited about the next chapter.”

Next year, he foresees more store openings in the UK and expansion in its existing international markets. The business has 79 stores globally, of which 56 are in the UK and Ireland, 12 in the US, five in Hong Kong, one in Singapore, one in Macau and four in the Middle East (Kuwait, Dubai and Lebanon). Williams would not give a breakdown of international versus domestic salesor go into specific locations for further stores.

Jack_Wills_Wilstead_shearling_jacket

There are no plans to make any significant changes to the product, which still clearly targets university students. Prices for womenswear include, at the lower end, £16.50 for a tank top, and go up to £698 for a limited edition Wilstead shearling jacket (pictured). Basic men’s T-shirts cost £19.50, while an Oxburgh overcoat is £298.

It prides itself on its British heritage, with some items made or woven in the UK. For autumn 15, Jack Wills has launched a Blackwatch range of blazers, T-shirts and shirts, which are inspired by traditional Loharron tartan from the Scottish borders.

As previously reported by Drapers, the business was hit by a period of high staff turnover towards the end of 2014 and into 2015 and has since made a number of key hires, including a new merchandising director, head of products, head of selection, supply chain director and interim chief operating officer.

The latest appointment is head of ecommerce Mark Wright, who joined in August after 15 years at Marks & Spencer, where he worked his way up from senior retail operations manager to head of its UK ecommerce team.

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