Jack Wills facing a cash crunch as trading is hit
Preppy British brand Jack Wills is reported to be facing a cash crunch in the coming months as it has been hit by a downturn in trading.
According to The Sunday Times, the retailer led by CEO Suzanne Harlow, is burning through its latest injection of £28m in cash from private equity backer BlueGem and from Italian businessman Giorgio Girondi.
The report quotes a source close to the business saying the trading and "fallen off a cliff" during the spring and that Harlow's efforts to rejuvenate the business with a renewed sourcing strategy had been hit by the tough market conditions.
Jack Wills made pre-tax losses of £29.3m on sales of £139.5m in the year to January 2018. There are suggestions it may be the next chain to pursue a CVA though BlueGem, which also owns department store Liberty, is said to be reluctant to pursue such a course of action.
Harlow, formerly trading director of Debenhams, was brought in to replace founder and former CEO Peter Williams. Williams had been in his second stint at the firm. Having originally left in 2013 he had bought the company back from its previous long-term investor, Inflexion, in partnership with BlueGem in 2015.
However a strategic disagreement between Williams and BlueGem led to his departure last year. Williams had been attempting to expand the brand's appeal beyond its customer base of students and middle-class market town dwellers.
It had been opening stores in more mainstream locations and had made a move into wholesale but a drop in sterling following the Brexit vote derailed its plans and the move into wholesale tied up valuable cash.
Like fellow British brand Superdry, Jack Wills has struggled to find relevance as its heavily branded clothing fell out of favour.