Myer is considering purchasing collapsed Australian fashion brand Lisa Ho, new reports have indicated this morning.
Lisa Ho Group collapsed earlier this month with debts of approximately $11 million, another victim of the fashion industry, which has remained under intense pressure as consumers become more vigilant over retail purchases.
The Australian reported this morning Myer is believed to have been given access to Lisa Ho’s company data.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
Administrator Barry Taylor from HLB Mann Judd told SmartCompany he wasn’t able to disclose whether or not Myer is interested in Lisa Ho. He did confirm the firm had advertised for expressions of interest and has received a positive response from many interested parties and negotiations are proceeding.
“We initially received about 10 expressions of interest, with seven parties signing confidentiality agreements and since then there have been many more,” he says.
“It’s never done until you’ve signed the contract, but our hope is that it would happen sooner rather than later. It’s always difficult trading business while a business is in voluntary administration.”
Taylor points to a number of Australian brands placed in voluntary administration (such as Sportsgirl and Bettina Liano) in the past which have since been sold or restructured and have returned to profitability.
“The Lisa Ho brand has been around for 30 odd years and has a place in women’s fashion and obviously there are a number of other people who think that,” he says.
A Myer spokeswoman told SmartCompany it does not comment specifically on which brands are under consideration, but acquiring brands is part of its strategy.
“We have a proven track record in acquiring brands and have been clear that we will continue to seek strategic opportunities that fit into our brand hierarchy and meet our investment criteria,” the spokesperson said.
Bentley’s partner and retail expert David Gordon told SmartCompany Myer is often approached by brands which have been in financial difficulty.
“Myer has made some very strategic and very calculated decisions. If they go ahead with it, it will be based on the strength of the Lisa Ho brand and design team.”
Gordon says since Myer purchased a 65% stake in Sass and Bide in February 2011, it has perfected its management model and the department store would likely see a similar opportunity with Lisa Ho.
“Sass and Bide had its own stores and were a retail brand and similarly, Lisa Ho has its own stores too. A Lisa Ho play wouldn’t be that dissimilar to a Sass and Bide play for Myer and it’s the only way they’d get a certainty of supply of the brand,” he says.
Meanwhile, there has been more commotion in the fashion industry, as yesterday it was announced label Simona is ending its relationship with Myer and returning to David Jones.
Simona will be available in David Jones stores from August 1, 2013. Simona managing director John Recek said in a statement the company needs to be part of a department store with a “house of brands” strategy.
“Based on our 48 year history with David Jones, we know that it is a department store that understands our brand, our customers and the way we want Simona positioned in the market,” he says.
Myer’s group general manager for women’s fashion Nicole Naccarella told SmartCompany the retailers mutually agreed to part ways.
“Simona was disappointing for us and for the brand over the past two years, so we mutually agreed to the exit. We constantly review our offer to the customer to deliver sales and margin growth and Simona was not a brand that resonated with our customers.”
“We manage a broad portfolio of brands from international and Australian designers, national brands, and Myer exclusive brands, and we adapt this mix in response to our customers’ desires. In this context, brands come and go,” she says.
Simona is the latest brand in a wave of exclusive contracts secured by David Jones recently, including Givenchy, Finders Keepers and Sunseeker.
Both department stores have been on the hunt for exclusive contracts, with Myer also securing deals with Napoleon Perdis and swimwear brand Sea Folly recently.
“We have some exciting new brands to announce to our customers soon,” Naccarella says.
Gordon says exclusive contracts have become prominent in the past five years and have been a success for department stores, particularly with high-end brands driving extra traffic, but it’s common for brands to “chop and change” between stores.