It makes complete sense for Marks & Spencer to add fashion brands to its offer, particularly online, as has successfully been done by rival Next.
But would the acquisition of the Jaeger brand, flagged as likely by The Mail on Sunday and Sky News, really bring much to the party?
A Jaeger deal would have little risk and would be pretty cheap, given the business would be bought out of administration from the wreckage of Philip Day’s Edinburgh Woollen Mill Group. It is, however, a troubled brand.
“Jaeger is a brand that only really stands for something in the eyes of more mature customers – and M&S already has plenty of those”
It says something that the person most associated with Jaeger’s fashions is Audrey Hepburn – right back in the 1950s. Jaeger also went into administration in 2017, when Day took control of the business after purchasing its debt. Former owner Better Capital lost £62m.
That’s not to say it would be impossible to make a success of Jaeger. But it would take a lot of work to burnish the brand’s credentials and make a meaningful return, rather than it simply existing as one more label that puts relatively small change through the tills.
Surely M&S would do better to focus on partnerships with third-party brands, such as those recently launched with Early Learning Centre and eco-fashion specialist Nobody’s Child, or acquisitions either of new, up and coming brands, or those that have serious clout. Topshop, despite its recent problems and the administration of owner Arcadia, falls into the latter category.
The purchase of Topshop would, of course, be more expensive than Jaeger – a £200m price tag has been mooted – and therefore is a riskier strategy, but the potential rewards are far greater. That is evident in the level of interest in Arcadia’s flagship business, including, it is thought, from some of the biggest names in fashion such as Boohoo and Next.
Topshop would give M&S lots more to play with than Jaeger. Topshop, once famous for its flair and innovation, has suffered in recent years, losing its way under Sir Philip Green’s ownership, but it remains one of the most resonant brands in fashion.
In 2018, even after 9% was wiped off its top line, sales still totalled £846.7m. That is a strong foundation on which to build and restore the brand’s profitability.
Pulling the right levers
Many younger women still speak with affection for Topshop in its heyday. It was not necessarily the cheapest but it was seen as the best. Customers were willing to save up in order to splash out on a visit to the Oxford Street flagship.
That love for the brand can be reignited and, through ownership, M&S would not only attract a younger demographic but have the opportunity to graduate those shoppers to its own apparel ranges as they get older. Jaeger, in contrast, is a brand that only really stands for something in the eyes of more mature customers – and M&S already has plenty of those.
“M&S would better set itself up for its online future by going after Topshop or promising fledgeling businesses that could become the Topshops of tomorrow”
M&S also has the expertise to make the most of Topshop. Over the last year or so, the retailer has poached former Topshop fashion director Maddy Evans and Arcadia creative director Anthony Cassidy. M&S’ new clothing and home managing director, Richard Price, also has an Arcadia connection – he was managing director of BHS for three years. Between them, they should know what levers to pull to make Topshop sing again and create efficiencies through M&S’ scale.
Price, along with strategy and transformation director Katie Bickerstaffe, is in charge of MS2, the retailer’s “new integrated global digital, data and online business division”, designed to “enable clothing and home to compete like a pureplay and maximise the significant online opportunity”.
What a canvas Topshop could be to paint on as an online-first brand, with shop-in-shops in larger M&S branches and perhaps a handful of flagships in major cities – the costs and performance of which could be measured against their contribution to building an online offer.
Surely M&S would better set itself up for that online future by going after Topshop or promising fledgeling businesses that could become the Topshops of tomorrow, rather than Jaeger – a once-great name from yesteryear.