In Focus: Jigsaw

Jigsaw is an established member of the upmarket fashion scene that in 2003 spawned the younger, more mid-market Kew format and in 2005 acquired the Cabbages & Roses brand, plus the iconic but troublesome The Shop at Bluebird on London’s King’s Road.

Retail Week Knowledge Bank’s new profile shows 2005 to have been the group’s high point, with combined sales approaching £90m and double-digit margins. It was downhill thereafter, as sales fell from £70m to £53m and Kew stalled at £20m, with mounting losses from 2006/07, exceeding £7m in 2008/09.

However, major restructuring, including new corporate entity Kewsaw - which replaced Robinson & Webster - led to improving fortunes. In 2009/10 sales rose for a second year, the group broke even and over five points were added to gross margin.

While Kew and The Shop at Bluebird remain loss-making, the restructuring appears to have laid the foundations for a more profitable future. Kew is being developed as an in-house concession and footfall catalyst in the relatively large Jigsaw stores. Cabbages & Roses is also showing promise as a standalone and in-house concession format, in addition to its increasing wholesale potential.

One key consideration is that Kew would probably not have survived had the group been quoted or private equity-controlled but John Robinson, Jigsaw’s founder, owns almost all the shares and has stuck with Kew.

The group still has its Achilles’ heel of modest densities. From a peak of only £350 per sq ft in 2004, Retail Week Knowledge Bank calculates they have fallen below £250 per sq ft, excluding online and wholesale - low for upmarket stores in prime locations. There is significant scope to raise this towards £400 per sq ft, providing a much-needed profitability boost.