Twitter
Facebook
Linked In
RSS
Login or Register
New to InternetRetailing?
Register Now
Internet Retailing
You are in: > Home > Themes > Location

This is your 1 complimentary article for this month

Become a member for unlimited and immediate access.


Register
Already a member? Log in here

Sports Direct buys Jack Wills out of administration

Linked InTwitterFacebookeCard
Sharelines

Sports Direct buys Jack Wills out of administration

Sports Direct has bought Jack Wills out of administration for £12.7m - its fifth major acquisition of the last 12 months.


The year of acquisitions opened on August 10 last year when the retailer, led by Mike Ashley, announced it had bought House of Fraser out of administration. That was followed by the acquisition of Evans Cycles out of administration in November, sofa.com in February and Game in July. The retailer, which also owns 26% of French Connection, also made unsuccessful bids during the year for Findel, Debenhams and Patisserie Valerie.

 

The latest transaction gives Sports Direct direct ownership of the kind of brand that it would like to feature in its ’multichannel elevation strategy’. Jack Wills, which employs 1,700 people at its more than 100 stores, features preppy clothing of a type that was very popular with students in the early 2000s but has more recently lost that appeal.

 

In the year to January 28, Jack Wills had gross assets of £98.97m and made an operational loss, before exceptional items, of £14.2m, and a net profit, after exceptional items, of £19.2m.

 

The Sports Direct strategy

Sports Direct’s multichannel elevation strategy, said chief executive Mike Ashley in its full-year results, is the retail group’s response to brand insistence some years ago that it should move away from the traditional ‘stack them high, sell them low’ discount model and instead sell through a new generation of stores. Since then it has invested in buying and fitting out retail space for its own brands, including Flannels, but in its full-year results it said it had not received the amount of premium product it believes its stores deserve.

 

The move to buy Jack Wills gives it a direct route to gain as much branded clothing as it wants. The retailer is likely to sit alongside its other premium lifestyle brands including Flannels, Cruise and Van Mildert.

 

Buyers’ remorse?

One analyst suggests that the Jack Wills acquisition could be another one that Sports Direct comes to regret – in reference to Ashley’s comments in Sports Direct’s frank full-year results that House of Fraser had proven to have problems that are “nothing short of terminal in nature”. At the time, Ashley said: “On a scale out of 5, with 1 being very bad and 5 being very good, House of Fraser is a 1, albeit we are trying very hard to turn the business around this will not be quick and it will not be easy.” He added: “Even though we do believe there could be a bright future for House of Fraser, and indeed have publicised our Frasers vision which we are very excited about, if we had the gift of hindsight we might have made a different decision in August 2018.”

 

Today Pippa Stephens, retail analyst at data and analytics business GlobalData, said: “Though Mike Ashley has given Jack Wills a much needed lifeline, he already has far too much on his plate to make the ailing lifestyle brand a priority and implement a successful turnaround strategy. While Ashley recently admitted that he regrets purchasing House of Fraser, significant time and money are still required to resurrect the failing department store retailer, making it the focus if Ashley is to retain his self-penned ‘saviour of the high street’ label.

 

“Jack Wills has lost relevance in the UK clothing market as its heavily branded, preppy products no longer appeal to 16 to 24 year olds who now prefer more edgy, aspirational brands. Consistent discounting has devalued its full-price proposition, while its stores have lost their appeal and uniqueness. Jack Wills needs to be substantially revamped if it is to revive its desirability, win back shoppers and establish a new loyal customer base. Without sufficient investment in modernising ranges and improving the instore experience, we expect it to continue to struggle in today’s competitive youth segment.”

 

Image: Screenshot of JackWills.com/InternetRetailing Media

Linked InTwitterFacebookeCard

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