Jaeger buys time with notice of administration filing, analyst blames discount addiction
today Apr 7, 2017
Jaeger has confirmed to Fashion Network that it filed notice to appoint administrators this week. It gave no other details but the move wil have bought it time to find a buyer. Edinburgh Woollen Mill (EWM) is seen as a possible new owner for the brand.
The company has struggled for some time and analysts said its addiction to discounting and inability to offer the right product to its core middle-aged customers is a lesson for the rest of the UK fashion sector.
Jaeger has given no further details of exactly what it happening at present and EWM is also not commenting.
Owner Better Capital confirmed last month that the brand was up for sale with EWM believed to be interested in acquiring it, although Jaeger’s ex-owner Harold Tillman had also been suggested as a possible buyer at one point.
While the firm has bought itself some time with its latest move, it looks likely that a full administration filing will not be far behind. And the brand and its most profitable assets should be picked up by a new owner soon after, although hundreds of jobs could be at risk as the company is expected to emerge with fewer stores.
Jaeger has a history stretching back 133 years and was a major name in UK fashion for much of that time. In this century, it hit a high point last decade when its Jaeger London line was shown at London Fashion Week to strong reviews. But despite critical acclaim, this did not boost sales enough, while a move back to a more classic profile also failed to rescue it from tough times on the UK high street.
It has has closed a large number of stores in recent years and its sales dropped to £78.4 million from £84.2 million last year. It also closed its long-time Regent Street, London, flagship with the new Coach flagship taking over the coveted space.
Glen Tooke, consumer insight director at Kantar Worldpanel, told Fashion Network: “Jaeger has struggled for years to truly understand its core clientele. London Fashion Week collections and more fashion-forward designs may appeal to younger shoppers, but with 45-54 year olds accounting for a fifth of spend Jaeger’s tendency to overlook them has critically damaged its brand.”
He said the firm had struggled to make profits as too much of its offer was being sold at a discount: “Remarkably, discounting accounts for over three quarters of Jaeger sales. This constant stream of sales and offers has discouraged shoppers from paying full price and has lessened their trust in the quality of the Jaeger product – one of its fundamental selling points.”
He also believes that with the trend being replicated across the wider market, “other retailers will be at risk if they fail to get their discounting levels under control.”
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