Is Jack Wills Britain’s answer to Abercrombie & Fitch? Can it successfully challenge the latter in its home territory or, indeed, elsewhere in the world?
Certainly Jack Wills seems near the top of many investment managers’ agendas, itself an accolade for a business that just five years ago was breaking through the £10m sales barrier, now with a core format still having fewer than 50 UK stores, an embryonic second format, plus a physical toehold in the US following a website presence there since 2008.
Retail Week Knowledge Bank’s profile poses the inevitable question whether Jack Wills – sales comfortably breaking the £100m barrier in 2011/12 – with its distinctive stance, has long-term legs or whether offer evolution, even range extension, will be required when fashion trends move on.
If so, is it a realisable and sustainable possibility – at what scale and in which markets? Is its essence scaleable, even desirable, à la Abercrombie & Fitch, taking into account the latter has been facing declining US sales and rationalisation?
These are among the key questions facing not only management but also, of course, prospective investors, given seductive indications about a possible equity sale of at least a major stake, or even an IPO, in 2012.
It is a difficult conundrum because shooting stars, by definition, burn out, while the UK’s youth market faces classic shorter-term pressures of declining confidence, unemployment concerns, squeezed disposable incomes and higher university tuition fees leading longer term to higher loan repayments for core customers once on their career ladders.
Moreover, elevated and rising densities, a high employment cost to sales ratio, plus attractive margins hitherto, are but historical components of the debate. Retail Week Knowledge Bank’s profile weighs the wider pros and cons, not least the corporate cultural challenges of increasing maturity facing a business built to date on entrepreneurial growth of an idiosyncratic fashion format.
- Robert Clark, Director, Retail Week Knowledge Bank