M&S Move For Jaeger Could Trigger Scramble To Snap Up Fashion Brands

U.K. fashion and food retailer Marks & Spencer (M&S) is closing in on a deal to buy Jaeger, the loss-making fashion brand which is among a host of U.K. fashion retailers that have fallen victim to the impact of the coronavirus pandemic.

M&S could sign an agreement to acquire the classic womenswear brand Jaeger as soon as the end of this week.

However, M&S’s deal is only expected to involve the acquisition of Jaeger’s brand and stock, not its 63 stores and concessions that remained in place following the initial closure of 13 shops in November.

And its acquisition could trigger a scramble among potential U.K. and U.S. investors, who are circling a number of well-known high street fashion retailers currently in administration

Jaeger was part of the fashion empire owned by Dubai-based Philip Day, who appointed administrators for his Edinburgh Woollen Mill Group (EWM)
Group in November. EWM also owned Peacocks, Austin Reed, and Jacques Vert, none of which are thought to feature on M&S’s shopping list.

According to news reports, a deal with M&S is “imminent” but FRP Advisory, which is handling the administration process, has so far declined to respond to speculation, as have EWM and M&S.

Fashion Brands: Who Is Buying Who?

After a disastrous year for fashion brands, many of which were facing hugely challenging trading conditions anyway, a succession of full and partial store closures during the pandemic have tipped them over the edge. A host of high street names have gone into administration or issued Company Voluntary Administrations (broadly the U.K. version of Chapter 11).

Frasers Group, owned by billionaire Mike Ashley, has been linked with acquisitions of department store Debenhams and also with picking up some or all of the brands of Arcadia Group, owned by fellow billionaire Philip Green.

However, the fashion and homewares chain Next – which this week posted strong late-year trading figures – is thought to be considering combining with the U.S. owner of Oak Furnitureland, Davidson Kempner Capital Management, to mount a bid for Arcadia Group. Next is understood to be interested in Topshop and Topman while Davidson Kempner, which gave a £249 million loan to hard discounter Poundland in 2018 and has previously been linked with a potential rescue of Peacocks, would take on Arcadia’s other brands such as Miss Selfridge, Dorothy Perkins, Burton, Evans, and Wallis.

Next has already been busy expanding its brand portfolio, including a joint venture to operate 18 Victoria’s Secret standalone lingerie stores in the U.K., plus offer the brand in its own stores and online. It has also become a license partner for Ted Baker lingerie and has opened a new beauty outlet concept within several former Debenhams stores.

Online retailer Boohoo and Authentic Brands have also been linked with a move for Arcadia Group, but complicating the sale is Arcadia’s multiple concessions within Debenhams, which is set to close all its stores by March if a buyer cannot be found. The department store chain has been in talks with Frasers Group about a potential rescue deal, although nothing yet has emerged from these.

Davidson Kempner bought Oak Furnitureland out of administration in June 2020 and has since been cited as a potential savior for several failed U.K. businesses, including EWM Group, though M&S now appears to have jumped into the lead for Jaeger within that portfolio.

New Directions for M&S And Jaeger

For M&S’s chief executive Steve Rowe, the acquisition would represent a consistent fit with the company’s new strategy of selling third-party brands that appeal to core M&S shoppers.

It has already launched collaborations with cult dress brand Ghost for limited edition collections, plus Nobody’s Child, a sustainable fashion brand, and toys retailer Early Learning Centre. Last year, M&S also bid to become the UK franchisee of Victoria’s Secret before losing out to rival Next.

If completed, the takeover by M&S will represent yet another new chapter for Jaeger, founded in 1884, which in recent times has also been owned by financial investor Jon Moulton’s Better Capital and Harold Tillman, former head of the British Fashion Council.