Twitter
Facebook
Linked In
RSS
Login or Register
New to InternetRetailing?
Register Now
Internet Retailing
RetailX Brand Index 2019

RetailX Brand Index 2019

You are in: > Home > Views > Editorial

This is your 1 complimentary article for this month

Become a member for unlimited and immediate access.


Register
Already a member? Log in here

EDITORIAL Arcadia staves off administration but can it beat Zara and Boohoo?

Linked InTwitterFacebookeCard
Topman – saved for now, but the headache is only just starting for Arcadia
Topman – saved for now, but the headache is only just starting for Arcadia
Sharelines

Acadia gets its CVAs approved: now the really hard work can begin

Sighs of relief across the retail industry as Arcadia Group staves off administration and lives to trade another day. The ailing retailer has successfully renegotiated its rents and, despite having to close nearly 100 stores with the loss of 1000 jobs, it believes it is now in a good place to fight back.

 

But is it? Many argue that it is already too late for Arcadia: its brands tarnished by both being dated and by association with Sir Philip Green, the group’s owner, who has rarely been out of the headlines these past 18 months.

 

The group has seen sales slide across all seven of its major High Street fashion brands, as well as being forced to play catch up online with a host of more quirky, cool, young and hip pure-plays that are eating its lunch.

 

Analysts have also blamed Brexit for some of Arcadia’s troubles, with Fiona Cincotta of City Index convinced that the problems at Arcadia are the same that have hit Debenhams, LK Bennett, Wine Direct, Office Outlet, Steamer Trading, Patisserie Valerie, OddBins and Jamie Oliver’s chain of restaurants – the slow and almost imperceptible erosion of consumer confidence that the Brexit debacle has brought about.

 

Yet, while there is a good deal of truth in both these arguments, it doesn’t need to be this way. Boohoo has managed to record record growth again this quarter, showing that despite this erosion of confidence, the young ‘uns still want nice trousers.

 

Similarly, while Arcadia and all the other fashion brands suffer greatly, Zara owner Inditex has recorded a record quarter, turning over nearly €6 billion in three months. €6 billion. That is incredible.

 

What Boohoo and Zara have is that they have not only got their offering right – great clothes at the right price with slick service – but they are also turning over lines quickly, keeping their marketing, especially through social, interesting and, in Inditex’s case, keeping an extremely tight grip on costs while they do all this.

 

This axis of right stuff at the right price across channels run at optimal cost is the key to understanding modern retail. With its rents down, Arcadia can seek to look at ticking off one of the boxes. All it has to do now is spend the next month getting the other two right and it might – and it’s only a ‘might’ – stand a chance.

 

All retailers all also need to look right now at how they can garner some much needed cash flow from Father’s Day. While not the peak that Christmas, Easter, or even Mother’s Day is, retail consultants Savvy are tipping it to be worth nearly a £1 billion to UK retailers this month. That is an awful lot of extra cash to inject into the blighted retail economy.

 

It is perhaps the one straw worth grabbing at right now. With the UK government likely to be in disarray until at least the end of July – probably way beyond that: a new Prime Minister is going to face all the same problems ahead of Brexit – retailers need to seize this opportunity.

Linked InTwitterFacebookeCard
Add New Comment
LoginRegister

The InternetRetailing Newsletter

A curated update containing news analysis, reports, podcasts and opinion - completely free and delivered three times weekly

Become a Member

Create your own public-facing profile
Gain access to all Top500 research
Personalise your experience on IR.net
Internet Retailing
We are the magazine, portal and research source for European ecommerce and multichannel retail, hosting the board-level conversation for retailers, pureplays and brands across all of our platforms. Join the conversation.

© InternetRetailing Media

Latest Tweet

Internet Retailing
Tamebay
eDelivery
Twitter
Facebook
Linked In
Youtube
RSS
RSS
Youtube
Google
Linked In
Facebook
Twitter