Rescue bid for A-Wear: close concessions, turn to wholesale

Irish fashion retailer A-Wear, which went into examinership for the second time in less than two years, would eventually shut down its concessions in House of Fraser stores in the UK and make the transformation into a heavily wholesale-oriented business.

As reported by Irish media, the rescue plan being proposed for A-Wear involves fine-tuning its wholesale operation by supplying large orders to bigger retailers and websites across Europe and to shut down its nine concession outlets in House of Fraser stores in Britain. The latter were only opened earlier this year. Additionally, the fashion chain would need to reduce the cost of its upward-only leases in Ireland.

The new focus is the last attempt to save a brand that, according to retail and fashion consultant Eddie Shanahan, 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 for the ‘Irish Times’.

New focus, cheaper sourcing

At the moment, the majority of the retailer’s stock is sourced from Britain. Aimed to slash prices in around a 20 percent, Jack Stein, a Canadian businessman who bought A-Wear from the Jesta group last month, is backing a plan to source more of its stock from lower-cost locations such as India, China and Turkey.

Its wholesale operation, which accounts for just 10 per cent of sales, is run from Naas, Kildare.

KPMG’s independent accounts report that accompanied W-Wear’s examinership application, states that the company cannot meet current demand from its wholesale customers because of cash constraints.

It also unveils that A-Wear is in negotiations with “one of the largest fashion outlets in Europe” for a new wholesaling contract. “If [a deal] is successful, it would rapidly expand the market into which A-Wear can sell,” the report said.