Retail experts warn menswear business Ed Harry won’t be the only retailer to succumb to subdued retail conditions in the coming weeks as the industry comes to terms with lacklustre holiday trading.
KPMG’s Brendan Richards and Gayle Dickerson were appointed as the administrators of Specialty Mens Apparel, which trades as Ed Harry, yesterday.
The business, which has 87 stores across the country and almost 500 staff, will continue to trade as administrators attempt to find a buyer.
Coming less than three weeks into 2019 and just a few months after veteran menswear brand Roger David bit the dust, news of the collapse has compounded fears the year ahead will offer no respite for struggling retailers.
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In a statement sent out on Tuesday evening, Ed Harry managing director David Clark blamed competition for the brand’s downfall.
“Competition both in local bricks and mortar and online has been fierce in our sector for some time now. While this was to be expected, the Directors had been exploring options for funding to enable Ed Harry to continue to compete and grow, however to this point have been unsuccessful,” he said.
An urgent clearance sale of Ed Harry stock has already begun, itself likely to compound price competition in the menswear category, which has already been disrupted by clearance activity from Roger David before Christmas.
KPMG did not provide details about Ed Harry’s creditors when asked on Tuesday evening.
The difficulty for established retail brands in the menswear category was well documented last year, with factors such as commercial rent, sluggish consumer spending and competition from international players and online emerging as prominent factors.
KPMG partner Brendan Richards said Ed Harry had faced a difficult trading environment over the last 12 months, particularly over Christmas.
“It has also become clear that shopping centre footfall has been significantly weaker than expected,” he said in a statement on Tuesday evening.
Retailers SmartCompany has spoken to about Christmas trading broadly agreed with this assessment, with traders large and small reporting sales starting earlier than usual, before falling off significantly.
Commonwealth Bank card data revealed a 3.7% decline in spending between November and early-January, while Citi researchers said foot traffic declined 9% between Black Friday and Boxing Day.
The importance of Christmas trading has historically prompted some struggling retailers to hold-out for the holiday rush, which can skew retail collapses to January, but experts say the administration of Ed Harry is nonetheless a worrying start to the year for the sector.
”We’ll see a number of retailers wave the white flag towards the end of January start of February as they account for their Christmas period sales,” Queensland University of Technology associate professor Gary Mortimer tells SmartCompany.
“If you’re stuck in the middle and you walked into Christmas discounting at 50 or 60 per cent off you need to turn over double the inventory to maintain sales.”
Retail expert Louise Grimmer from the University of Tasmania says the collapse of Ed Harry is another example of demanding consumers turning away from a business that got stuck in “bland land”.
“Following on from the collapse of Roger David, I think it’s inevitable that we will see more ‘victims’ this year and Ed Harry is likely to be just the first of this group,” she tells SmartCompany.
“Consumers are more demanding than ever, they have more choice than ever before and it’s not really about bricks and mortar versus online, it’s about the product and service offering and clearly showing what your brand stands for and how you are different from the competition.”
The administrators have decided to honour gift cards for customers willing to cash match on a dollar-for-dollar basis for the next month.
Ed Harry creditors will meet for the first time in Adelaide on January 24.