Truworths to launch value clothing chain Primark

/in

Article found on BizCommunity

 

South African retailer Truworths is launching a new value fashion chain called Primark – no relation to the international retailer of the same name. Truworths plans to open approximately 15 Primark stores over the next few months, with an average store size of 100m² during the launch trial phase. These will be a mix of standalone stores and others located in existing Truworths-owned stores.

The launch of Primark suggests that Truworths – which also owns Identity, YDE, Uzzi and Earthchild – hopes to tap into the growth opportunities present in the budget clothing market focused on lower-income consumers.

Subdued economic growth and the financial impacts of the Covid-19 pandemic on consumers are driving a retail preference for value purchases over premium goods. Nedbank’s Tasmika Ramlakan stated that this has been especially evident in the clothing category, where value players such as Mr Price and Pepkor have generally performed better than their mid-market and premium competitors.

In its interim results report, Truworths said that the new Primark brand will offer “good quality at great value and highly competitive prices yet reasonable margins”, and will be strategically aligned with “suppliers that can react and respond with short lead times”. The merchandise mix will focus on carrying a wide range of volume basic and coordinated fashion items that are seasonally appropriate, and available in multiple colourways.

In terms of brand positioning, Truworths said that Primark will be a youthful, fashionable, commercial and aspirational value-brand, with an energetic and vibrant store experience to reflect these qualities. The company added that Primark will depict “a strong sense of current social values”, including local production, sustainability, recycling, charity and community involvement.

Truworths will also be launching Fuel, which it described as a young progressive casual brand with a streetwear edge. Just like Primark, Fuel stores will exist both as a standalone format and as a shop-within-a-shop, with 20 stores planned to open within the next few months.

“There is a focus on cool, commercial and trendy product. The range is bought deep and narrow with the logo being clearly distinct and visible on all garments. The brand has a good perception of excellent value and good quality. Quick response and local production will drive a significant portion of this range to capitalise on focused product offering with enhanced speed-to-market,” said Truworths.

Asos snaps up Topshop and sister brands in £295m deal

/in

Article found on BizCommunity

British online retailer Asos has acquired Topshop along with the Topman, Miss Selfridge and HIIT brands from fashion retail group Arcadia, in a deal valued at £295m ($411m).

Philip Green’s Arcadia Group collapsed into administration in November last year, putting 13,000 jobs at risk.

Asos has however not agreed to buy the four brands’ 70 stores, putting the jobs of 2,500 high street retail workers in question. Only 300 head office staff will be saved as part of the deal, to help Asos with design, buying and retail partnerships.

Arcadia Group as a whole had 500 stores across the UK when it entered administration.

Asos is paying £265m for the brands and £30m for stock.

Strategic opportunity

Asos described the deal as a compelling strategic opportunity in support of its mission to become the number one destination for fashion-loving 20-somethings worldwide.

“These are strong brands that resonate well with our core customer base. Brand equity is strongest in the UK and they have an established presence in both the US and Germany, two of our key strategic markets. The Asos multi-brand model has our Asos brands at the core, supplemented by a curated edit of the best product from the most relevant brands globally. This transaction allows us to bring iconic brands in-house, allowing us to overlay our core strengths and transform them into leading digital first brands,” said Asos.

Nick Beighton, Asos CEO, commented: “We are extremely proud to be the new owners of the Topshop, Topman, Miss Selfridge and HIIT brands. The acquisition of these iconic British brands is a hugely exciting moment for Asos and our customers and will help accelerate our multi-brand platform strategy.

“We have been central to driving their recent growth online and, under our ownership, we will develop them further, using our design, marketing, technology and logistics expertise, and working closely with key strategic retail partners in the UK and around the world.”

The transaction is expected to be finalised later this week.

3 business lessons 2020 taught us

/in

Article by Jason Mellow on BizCommunity

We all agree 2020 was a year of disaster of note – but hard times can be good teachers. Businesses, and particularly SMEs, should take the time now to understand what 2020 taught us as they prepare to navigate an uncertain future.

Here are some of the key lessons that we can all use to give our businesses the best possible chance of succeeding in 2021 and beyond:

1. Digital transformation is a must

The businesses that were able to adapt best to the unexpected impact of the Covid-19 pandemic were those that were well down the road of digital transformation. In this case, they were able to shift to remote working more easily and effectively, but the broader lesson is that the more digital an organisation is, the more flexible it can be. Remote working may not be the best response to the next crisis, but you may be sure that a digitalised business will be better able to adapt than a traditional one.

It’s worth emphasising here that digitalisation is more than just technology. It’s vital that companies relook their business processes in order to optimise them for the digital environment: digital technologies and platforms are not just new ways of doing what you’ve always done, but an opportunity to reach new markets or offer new products/ services. The status quo has been permanently disrupted and so the emphasis must be as much on “transformation” as on “digital”.

What does your business model need to look like today, and are you able to adjust it as easily as circumstances change?

 

2. You can’t be too prepared

Without much fear of contradiction, one can say that nobody was prepared for what actually happened in 2020 – but it’s equally true that those who had planned for the unexpected had the advantage of plans that could be quickly adapted.

The lesson? You simply can’t be too prepared. Business continuity planning has never been more important because it focuses not only on how to respond to specific risks but also on how to make the organisation more resilient to any change in circumstance. SMEs in particular, may find themselves lacking in this area.

Globalisation is now being reassessed from the resilience point of view. Many companies are realising that globalisation has made them more vulnerable to disruption, both regarding their supply chains and their markets.

Consider tourism and its reliance on foreign visitors, or a South African manufacturer’s reliance on parts coming from overseas. Many organisations are seeing a greater focus on local markets or suppliers as a way to make themselves more resilient.

Financial resilience should be a particular focus – in business, the bottom line rules everything. Every effort should be made to reduce costs and overheads in order to build up a contingency fund.

3. Communication is vital

When times are uncertain, the smart get communicating. Business partners and customers are two audiences that need to know how your business is responding to the changed business circumstances and what your outlook is. Silence might be construed to indicate a lack of stability or ineptitude.

Similarly, employees will be feeling more stressed and uncertain. It’s rightly said that talent is the key differentiator in business, and it’s important to ensure yours is assisted in coping with new working conditions.

It seems clear that working from home/remote working will continue to play a part in business even once the pandemic is finally brought under control in certain industries: a company’s staff needs to understand the implications for them and management styles will certainly need to change radically. Often a leap of faith is required in affording more freedom and trust to our valued employees.

Similarly, employees need to know that there will be implications for abuse or actions contrary to your business values. All in all, this new approach can be very rewarding for both employer and employee.

4. Think strategically

This is probably the most important lesson, underpinning the three preceding ones. Having acquired the ability to be agile, having prepared itself for every eventuality, and having got its customers, business partners and employees on board, the company needs to know what to do.

Spending time on formulating strategy is more important than ever, but the time horizon has contracted dramatically – a fast-changing environment requires companies to see strategy formulation as an ongoing process rather than an action that takes place at stated intervals.

In conclusion: 2020 was a tough year, but we need to absorb the lessons it has to teach us – they will equip us all better to prosper in the years ahead.