Jaeger: Retail Failure Analysis, Apr 2017

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Jaeger - Why did the company to go into administration in 2017?

In 2004 Harold Tillman acquired the struggling retailer - Jaeger. The turnaround was a quick success and the company posted positive Profit Before Tax results every year from 2005 to 2011.

In 2009 Tillman took out a £5m dividend and acquired Aquascutum from Renown Inc (Japan). These actions, together with a number of other decisions taken in the same year, would ultimately lead to the company's sale to the private equity investor Better Capital in 2012.

We speculate that part of Better Capital's acquisition decision was made on flawed analysis and a business model based on online growth. In 2011 Jaeger posted online sales growth of more than 200%.

In 2013 the new CEO acquired or received 8% of the company. He departed in 2015.

“We don’t see it [Jaeger] going into administration otherwise we wouldn’t be sitting here. From reducing prices of the clothes to shutting shops, we’ve considered all the options you could imagine.” (Jon Moulton [Better Capital] via Cityam.com, January 2017)

 

We have identified seven main causes for the decline of the company.
  1. Brexit (exchange rate)
  2. 2009 (decisions)
  3. Online to the Rescue (the magic formula)
  4. Licence termination (why?)
  5. Better Capital (mis-management)
  6. Discounting (customers addicted to discounts)
    1. Note that since we started writing this report Jaeger has taken down their discount site www.jaegeroutlet.com for maintenance (luckily we have a few screenshots)
  7. Management turnover (lack of stability)

 

We analyse each of these points in more detail in a 4-page executive report, free to download (instructions by email).

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