The menswear market is thriving, underpinned by a boom in British tailoring, so why does high street icon Austin Reed continue to lose out?
The menswear market is thriving, underpinned by a boom in British tailoring, so why does historical high street icon Austin Reed continue to lose out?
With its 114 year history, Austin Reed has standards to maintain. It is not a conventional middle market retailer, where flagship stores are allowed to shine but a slip in high street standards can be overlooked.
This is a business with a royal warrant. Yet you would hardly think it, walking into their City branch, just a few feet away from the Royal Exchange.
In its defence, the premises are relatively small, and yet Austin Reed seems to believe that the way to compensate for this is to cram the store to overflowing, with shirts in plastic wrappers piled precariously on poorly placed tables.
This display, in one of the capital’s most affluent shopping districts, hardly screams ‘premium’. So merchandising is a problem for Austin Reed. As the store portfolio shrinks, the retailer has become more reliant on volume sales, but this undermines its brand identity as an exclusive tailoring brand.
No longer exclusive
The truth is, Austin Reed is no longer perceived as ‘exclusive’. It is not an artisan tailor, nor is it Burberry; yet it isn’t Marks & Spencer either. It is somewhere in between but has failed to fully frame its identity against the backdrop of the recession.
The menswear market of the past few years has been galvanised by a new breed of fashion brand: the “affordable luxury retailer”. Within this segment we have witnessed the growing success of retailers such as Ted Baker, Reiss and Charles Tyrwhitt, all similarly-positioned brands that have thrived as the appetite for high quality, reasonably priced tailoring grows.
“Austin Reed has, unfortunately, failed to effectively differentiate its proposition”
Anusha Couttigane, Conlumino
Against this tide of competition, Austin Reed has, unfortunately, failed to effectively differentiate its proposition.
If differentiation is a problem for Austin Reed, then it is a problem that extends to the brands held within the group too. Its acquisitions of Viyella and CC, while aligned to the Austin Reed proposition, are poorly integrated within the group offering.
As standalones, these brands are well presented. Yet in multibrand branches where Austin Reed is the umbrella fascia, Viyella and CC (formerly Country Casuals) often fail to stand out. The space afforded to the womenswear brands tends to be compact, back-of-branch displays that get camouflaged against the wider offer.
Moreover, as brands more heavily weighted in womenswear than menswear, they face fierce competition from the like of Hobbs, LK Bennett and White Stuff – brands that have a much sharper sense of fashion and brand positioning. In fashion retailing, additional brands are introduced to serve a purpose: they help to stretch the price architecture or target demographic.
There is little profit in housing Viyella or CC in Austin Reed branches as merely token womenswear offers. The brands need to be fully integrated at multibrand branches so that they appeal equally to both genders that visit the store, particularly if there is no Viyella or CC standalone in the nearby vicinity.
Whittling down the portfolio to a more manageable store estate is not a bad option for Austin Reed. It is a move that has brought numerous struggling retailers back into the black. The challenge it will have in convincing landlords and creditors regarding the CVA will be the branches it chooses to close, not to mention the reduced rents in the interim.
There are a number of locations where Austin Reed branches lack presence, for want of either sizeable formats or visibility on the high street.
Even in many of the more affluent shopping districts where Austin Reed is established, it pales in comparison to its upmarket competitors, who benefit from premises with better merchandising and higher visibility. These are things that Austin Reed will need to work on if its plan to rationalise back into profitability is going to work.
- Anusha Couttigane, senior fashion consultant at Conlumino
Austin Reed poised to close 31 stores as part of CVA turnaround plan
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Comment: The truth is Austin Reed has lost its exclusive reputation