The proposed CVA of Austin Reed has been a long time coming. The pressures of the post-Lehmans retail market have been tough on the company. The plan is to shut 30 stores in 6 months – 9 trade as Austin Reed and 22 as Country Casuals, the womenswear brand it acquired along with Viyella in 2009. Meanwhile, the plan is to renegotiate rents on a further 35.
There have been a great many “rescues” and “restructures” since 2008 and there was a sharp fall more recently as the retail recovery pushed the wolf from the door. As I have discussed many times here, the recovery is over. I think 2015 will at very best be a significant step backwards but much more likely, will be the most challenging we have seen for generations. We have been seeing seismic shifts in the structure of UK retailing but for a variety of reasons, the full impact of these shifts is only now beginning to emerge. Overcapacity and soft demand will be the key drivers of a strongly deflationary retail landscape this year and going forwards.
My point here is less about Austin Reed per se, but a more broad general one. Restructuring based on the here and now might help in the very short term but will quickly prove inadequate. It must be done on the basis of a very clear view of what “fit for purpose” will look like in say 3-5 years time. I am expecting a material increase in the number of restructures and quite a number will be repeat visitors to the retail operating theatre.. They don’t need cosmetic surgery but radical change to their models, defined by the future landscape and not the present version.
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