Struggling A|Wear switches focus in latest survival plan
The fashion chain has seen four changes of ownership in six years but there may be a glimmer of hope as it enters examinership
The Awear store on Grafton Street, Dublin. Photograph: Eric Luke
Not another one. That was the general reaction this week when it emerged that the fashion retailer A|wear has entered interim examinership, buckling under the strain of the cost base attached to its 30 Irish stores.
Its holding company, Latzur, has followed a slew of other retailers, including Homebase and B&Q, on what has recently become a well-worn path to the High Court to get its rents written down.
A|wear, which sells mid-market ladies fashion aimed at 18-35 year olds, has been through the ringer – and four changes of ownership – in the last six years, as the economy rolled over a cliff. According to retail and fashion consultant Eddie Shanahan, A|wear lost something along the way.
“I’m not sure who A|wear’s customer is anymore, or what its brand stands for, although I used to. But the middle market where it operates is getting squeezed and A|wear needs to distinguish itself. The company needs to send a clear message about who they are,” said Shanahan.
It is no wonder the brand has lost some of its identity when you look at how often it has changed ownership.
The company was bought for €70 million in 2007 – the top of the market – from Brown Thomas in a management buyout backed by Alchemy Partners.
A|wear staggered through the recession, until the turnaround specialist Hilco Capital – which recently rescued HMV – bought it in November 2011 for a tiny fraction of its boomtime price tag. It quickly realised it had made a mistake.
“Hilco bought it in a rush because it thought the Government was going to act on upward-only rents,” said David Fitzsimons, the chief executive of Retail Excellence Ireland. “In the cold light of day, it realised it wasn’t going to work. Hilco specialises in distressed debt. But you don’t get much more distressed than mid-market ladies fashion.”
Just four months after it got the keys, Hilco flipped the business on to a consortium fronted by the Monaco-based businessman Michael Flacks. The consortium also included the Jesta group, an investment house owned by the Lebanese-Canadian Aintabi family. They reputedly paid less than €1 million for A|wear in February last year.
Flacks, who started his career selling leather jackets from the back of a van in the 1980s, is a colourful character. He set about trying to renegotiate A|wear’s rents, with some success. But it wasn’t enough.
His wife also became involved in the business, according to a source.
The partnership with Jesta didn’t work out and Flacks left the business a year ago, he told The Irish Times.
“But I’m still on good terms with everybody,” he said.