There is no doubt that having a strong brand that connects with consumers is making a difference in the current climate.
In the value sector businesses such as Poundland and TK Maxx are benefiting from providing outstanding value in these cash strapped times. Equally brands such as ASOS have enjoyed the combination of a proposition (instant fashion and a new channel on-line) to challenge brands in their sector. Since arriving on the scene they have changed the way that customers shop on-line for fashion. Few remember where ASOS started….’as seen on screen’ was all about the influence of celebrity on fashion, the idea being that what celebrities chose to wear in public had a huge influence on how women wanted to dress. It started small and then exploded to become as big as a 100 store fashion chain. Similarly net-a-porter made designer labels accessible not just geographically but by avoiding the intimidating experience of entering a designer environment, allowing you try your purchases on in the comfort of your own walk in wardrobe!
There will no doubt be new and exciting brands emerging as a result of the current economic climate. The smart investors will be spotting them early and be brave with their money. These businesses can be messy in the beginning as they find their feet but provide superlative growth and profits in the medium to long term.
In September Clearwater will be hosting a breakfast event in conjunction with brand agency Pearlfisher to explore the development and role challenger and icon brands have in the market place. Please email us if you would like to attend.
Clinton Cards buys back 196 of its Birthdays stores from the administrator. Clinton Cards, the UK-listed greeting cards and novelty gift retailer, has bought back 196 Birthdays stores from administrator Zolfo Cooper for £3.5 million. Last month, Clinton Cards put the 342-strong Birthdays retail chain into administration following a sharp deterioration in trading conditions. It is understood that Birthday’s Bury head office will be closed.
Poundland bargains drive 47% profit rise. Discount retailer Poundland has reported a 47% increase in annual profits on the back of a 2.1% increase in like-for-like sales.Operating profits rose to £11.8m from £8m last year. During the year Poundland opened 41 new stores taking its portfolio to 212 stores. The company aims to reach 250 stores this year, creating 1,200 new jobs.
Lovefilm focuses on buy-out talks. DVD mail order rental company Lovefilm is in talks with several private equity firms including KKR and Silver Lake Partners about buying out existing shareholders and providing support for expansion. The talks are understood to centre on a valuation of the company at about £200m.
Iceland profit skyrockets as it sidesteps recession. Malcolm Walker, the chief executive of Iceland, has declared that his company is not taking part in the recession after revealing record sales and profits. Revenues soared 16% to £2.08bn in the year to 27 March, with profit before tax rocketing 84% to £113.7m.
Value retailer B&M Bargains plans to increase its store numbers to 400 across the UK. Profits in the year to December 31 rocketed 91.6% to £9.9 million on sales of £225.9 million, a 97% year-on-year uplift. During the year the retailer increased its store count from 49 to 89, expanding for the first time into Scotland and South Wales. The Blackpool-based retailer has since added a further 60 stores and will open 8 more this year.
Amazon UK readies footwear site. Amazon UK is poised to go live with a standalone shoes and accessories offer this autumn. The initiative follows the success of the e-tailer’s separate Endless site, originally launched in the US in 2007. The UK equivalent will mirror Amazon’s Japanese offer, Javari, which launched in March and sources said it will also bear the Javari name. Amazon introduced shoes on its UK site in 2007 and has been building its footwear buying team to facilitate its growth in the category.
News stories in other countries
Dress Barn acquires Tween Brands for $157 million. Dress Barn Inc, the leading US-based womenswear retailer with over 800 stores, has acquired Tween Brands Inc for $157 million in a stock-for-stock transaction. Tween Brands, which operates the Justice retail chain, will operate as a separate subsidiary.
Abercrombie & Fitch to close its Ruehl business. Abercrombie & Fitch has announced it is closing its Ruehl business saying that the economic climate has hampered potential success of the upmarket brand. The US fashion group will close its 29 stores and related direct shopping channels by the end of January 2010. Ruehl was formed in 2004 as a more high-end sister to its Abercrombie & Fitch fascia.