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November 19, 2010 7:32 pm
George Davies, the fashion entrepreneur who brought the nation Next, George at Asda and Per Una at Marks and Spencer, wants to talk about his new children’s wear and young fashion venture in the Middle East.
At a mock-up shop in a trading estate in the Cotswolds, he is showing off romper suits for babies, skull-motif T-shirts for teenage boys and tribal print jumpsuits for young women.
But while he flits from style to style, showing off a fabric here, a logo there, the spectre of his fourth venture GIVe, which is retrenching from the high street after lacklustre sales, is everywhere: GIVe shop fittings, GIVe hangers, even GIVe mugs.
After the success of his first three brands, the 69-year-old failed to hit the jackpot for a fourth time with GIVe – a play on George IV – denting his reputation and costing him a lot of money.
“It was disappointing,” he says, speaking for the first time since it emerged that he was closing five of GIVe’s eight standalone stores and considering the future of the remainder.
The brand was launched in October 2009, after being conceived in the autumn of 2008, as Mr Davies was preparing to leave M&S. It aimed to offer affordable luxury, using the best Italian fabrics.
But this meant that it could not compete on price – a brave strategy in a high street reshaped by discount fashion chains and characterised by ferocious competition in the middle market. It also favoured classic over cutting edge and targeted the over-30s rather than younger shoppers, who carried on spending regardless of financial woe.
Mr Davies admits that in spite of his almost 50-year career in fashion, he misjudged the market.
At the same time, Britain was in the grip of recession, which forced consumers to tighten their belts and rivals to engage in rampant discounting.
“I called it affordable luxury, and it was. But the question mark here is, was it affordable enough?” asks Mr Davies.
With hindsight, he acknowledges that perhaps he could have priced GIVe lower – making less profit – but instead selling a higher volume of garments.
“If I was critical of myself, that is what I would have done,” he says.
Meanwhile, he eschewed his tried and tested formula of joining forces with an established retailer, choosing instead to go it alone.
“I teamed up with footfall,” he acknowledges of his past alliances. “We had footfall going into those stores, these we didn’t. I thought I had done it a few times. But people don’t, in a sense, go out to find you.”
Indeed GIVe did better in department stores, which already had customers coming through the door.
Unlike Next, George at Asda and Per Una, GIVe also ploughed into a crowded corner of the clothing market, rather than carving out a new niche – such as fashion for grown-ups at Next, or anticipating the move to shopping for clothes at out- of-town supermarkets with George at Asda.
Combine this with running a store network – something Mr Davies had not done before – and the numbers did not stack up.
All in all, he estimates that GIVe has cost him £10m. He benefited from property deals struck at the nadir of the market, but he splashed out on expensive shop fittings.
Accounts filed for Mr Davies’s S’Porter vehicle show a writedown of £3.1m for GIVe’s fixtures and fittings, which pushed it into a pre-tax loss for the year to October 3 2009 of £3.84m, from a profit of £3m in the previous year. They also show £9m of the £10m investment in GIVe.
Grant Thornton, auditor, said there was a “material uncertainty” over the future of S’Porter, which also produces branded fashion for Liverpool and Arsenal football clubs.
Although insiders regard this as a technicality, it is possible that Mr Davies will have to inject more money into GIVe, for converting or exiting stores. He is also investing $4m(£2.5m) in the new children’s wear venture.
“Yes I have spent money,” he says of GIVe. “But I have not liquidated it. I’m not going to ... If I was to sell this business in five years time for a lot, you should ask me then.”
He will produce a “tighter” collection for GIVe, likely to be sold next to the new children’s wear and young fashion ranges, in Beales department stores and overseas.
He is most disappointed about the effect on his team, with the loss of 20 full-time equivalent roles.
With his extensive experience of the trade – his first three brands have sold £54bn of clothing – is there a lesson he should have learnt?
“Not to be so optimistic about the economy. Knowing what I know now, would I have done it at a different time? Obviously,” he says, pointing out that he has suffered setbacks before, such as Extend, a mail order catalogue.
The man who has enjoyed such success in the past is concerned he will now be portrayed as “George the failure”.
But as he shows off the marketing for the children’s wear venture – to the sound of babies crying from a photo shoot in the studio next door – he remains defiant: “Somebody once said to me when I was younger: ‘You are a survivor’. I’m still here. I have not given up.”
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