Austin Reed, famed for bringing ready-to-wear suits to the high street when it was founded in 1900, went into administration this week.
The fashion retailer, which once designed suits for Winston Churchill, has struggled to keep its proposition relevant and has seen its signature business eaten up by more nimble competitors as a result.
The administrator now overseeing the business, AlixPartners, said Austin Reed had suffered from “cash flow difficulties arising from challenging retail market conditions”.
Lack of investment
However some industry observers claim the primary reason for its failure was a lack of investment.
Its estate, from which it offloaded 31 stores last year, is still sizeable at about 100 stores and 50 concessions.
Austin Reed relocated its flagship to a different site on Regent Street in 2011, which sparked a positive reaction.
Retail Week stores editor John Ryan said at the time: “This [store] is a world away from Austin Reed as it was when it was across the street, and it is the better for it.”
But he added: “The real challenge for the retailer is how does it take the good work that has been done here and translate this for use in the provinces – Southampton and Stratford-upon-Avon, for instance, remain a long way from London.”
That challenge has, arguably, not been won.
RSM head of retail Rupert Eastell calls some of Austin Reed’s stores “tired and unexciting”.
“Far too many do not set a look and feel of a brand that is relevant for today,” he says.
Eastell also claims that, in his experience, the customer service is “not up to scratch”.
He says: “The staff are decent people, and the failure of the business is not their fault, but it is not at the level that is needed.”
“I would hope that most of it would be sold as a going concern and that somebody will bring it into 21st century”
Retail Remedy analyst Paul Thomas acknowledges this problem, but argues that Austin Reed is still a powerful brand.
“[The proposition] is outdated but it has the name,” he says. “I would hope that most of it would be sold as a going concern and that somebody will bring it into 21st century. They have a good chance if they do that.”
Ecommerce and product lagging behind
Austin Reed’s ecommerce offering, while small, has also not been developed at the pace needed in today’s multichannel environment.
It is arguably emblematic of a brand that has struggled to keep pace with the market.
The second key area in which Austin Reed has seen insufficient investment is product, according to observers.
“It used to rely on heritage and on great quality, both of which people would pay for,” says Thomas. “But the quality has slipped and the heavy discounting culture has not helped.”
Eastell adds: “Its ranges are inconsistent. It has not been able to develop its product and offer in the way that was needed – and it does not have a product that supports its price.”
Customer base and competition
Others have questioned whether Austin Reed was able to attract the younger generation.
“At the end of day it has ceased to be on the radar of younger aspirational customers,” says Economist Intelligence Unit chief retail and consumer goods analyst Jon Copestake.
“Twenty-something professionals are not looking at Austin Reed for suits anymore.”
Meanwhile, allowing quality and customer service to deteriorate has harmed Austin Reed’s reputation with its core customer base.
It was not always this way.
Less than a decade ago Austin Reed acquired Viyella, which was heading into administration, and Country Casuals.
But as Austin Reed’s proposition has weakened, there have been plenty of competitors waiting in the wings.
Brian Brick’s turnaround of Moss Bros has impressed the industry and it emerged yesterday the retailer is among those eyeing some of Austin Reed’s stores.
Meanwhile, Charles Tyrwhitt has a laser-focused proposition around quality shirts that customers buy again and again.
“There’s business out there – Charles Tyrwhitt is growing quickly,” says Eastell. “So why is Austin Reed in the state it’s in today?”
And Ted Baker, which has capitalised on the trend for heritage in its product offer but has a more self-aware, trend-led proposition, has attracted the younger customer.
“Just because something is iconic does not mean it will be successful,” says Eastell.
“Without a shadow of doubt there is a customer group out there that wants to buy from Austin Reed, that wants better from it, and that can be attracted”
However Eastell believes Austin Reed is not beyond rescue.
“Without a shadow of doubt there is a customer group out there that wants to buy from Austin Reed, that wants better from it, and that can be attracted. It is about knowing who your customer is and going and getting them.”
In the fiercely competitive fashion market, question marks remain over whether the chain has a future. About 30 interested parties are believed to be circling all, or part, of the business.
If it is to survive, Austin Reed’s new owners will have to bring it into the 21st century as well as drawing on its heritage if they want to revitalise this once iconic business.