Aurora Fashions is ditching its majority stake in Bastyan after the concessions brand ate into its profits two years in
Results to be filed next week will show Aurora’s group EBITDA dropped £2.3m to £12.7m in the full year to the end of February, 2012.
Speaking exclusively to Drapers, Aurora chairman Derek Lovelock explained this 15.3% drop in earnings was “largely down to Bastyan”. The previous financial year the premium womenswear brand had also damaged the bottom line, but to a lesser degree.
Lovelock said: “We launched the brand with a full retail team in place with the drive to get it to critical mass as quickly as possible.
“When we realised that in this environment it was unlikely to happen, we took the difficult decision to separate from our total ownership of Bastyan.
“It is a difficult time to launch a brand and there is also an issue of scale,” he added. “We are used to working with large-scale retail businesses and this is not our area of expertise.”
Lovelock declined to name the new owner, but confirmed it was one of Aurora’s suppliers. He described the company as having “considerable experience” in developing brands.
The deal, which will see Aurora retain a minority stake in Bastyan, is expected to be completed shortly. A “handful” of redundancies are being made within the brand’s concessions staff based in House of Fraser, which it is pulling out of, as well as some head office roles.
As a result of the sale Bastyan will not continue with its wholesale operation, which debuted for autumn 12, although it is expected the new owners will consider relaunching this after the initial bedding-in period.
The brand will continue to be retailed via Dublin department store Brown Thomas, online at John Lewis and through its www.bastyan.co.uk website.
Despite EBITDA dropping, Aurora, which owns the Coast, Oasis and Warehouse chains, saw growth in some parts of the business. International sales were up 15% and now account for about 30% of group revenues. Online also grew, up 28% over the period. Overall sales were up slightly, Lovelock said.