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What caused Calvetron's collapse?

Jacques Vert spring 16

Drapers investigates why Calvetron Brands went into administration for a second time.

Calvetron Brands, which owns labels Jacques Vert, Precis, Windsmoor, Dash and Eastex, collapsed into administration for the second time in less than a year on 4 May. It is now hunting for a buyer to rescue the group once again. 

Beleaguered retailers House of Fraser and Debenhams are key accounts for Calvetron, so there is speculation that uncertainty surrounding their futures played a pivotal role in the demise of the mid-market womenswear group.

“As a concession business, it’s clearly a big risk,” one industry source tells Drapers. “Calvetron was heavily reliant on Debenhams and House of Fraser. But if the stores are not particularly busy and you’re not getting passing footfall, it doesn’t matter how good your ranges are. House of Fraser made up a fair chunk of [Calvetron’s] income and to see [those sales] disappearing, with no guarantee [they] will come back, is very tough.”

Two days before Calvetron’s collapse House of Fraser announced plans to restructure its store portfolio through a company voluntary arrangement (CVA) to be launched in June. The number of stores earmarked for closure and their locations are yet to be revealed.

“If you’re trading in the 35 stores House of Fraser is looking to get rid of through its CVA, it is a big threat for everyone,” the source adds.

Mamequa Boafo, senior analyst for retail at GlobalData, says Calvetron has also struggled to provide a compelling product proposition in recent years, leading to the group becoming “increasingly irrelevant”: “Unlike competitor John Lewis, which has successfully revamped its range, offering new own label Modern Rarity, and retailers LK Bennett and Hobbs, which have both been more successful in giving a nod to fashion trends, Calvetron has fallen behind other fashion players who share a similar customer demographic.”

Another source agrees the mid-market is particularly difficult: “It’s clearly really tough and we are seeing a perfect storm in the sector with Jaeger, Country Casuals and Hobbs all changing hands. The market is saturated and customers are looking for product that does more than one job, something they can wear to a wedding and then out for drinks the week after.”

One source tells Drapers a lack of investment was a key factor in the group’s recent troubles: “There was no appetite for investors to invest what was needed. It is very sad, particularly for those people who have been through it already.”

Calvetron has around 300 concessions and employs 1,408 people – 997 in the UK, 155 in Ireland and 256 in Canada. All concessions are continuing to trade and no redundancies have been made yet.

The business last appointed administrators in June 2017. At the time, Harold Tillman headed a consortium of investors in buying the business, then known as Style Group Brands, in a pre-pack administration deal.

Suppliers report incurring “huge losses” but say they were reassured at the time that the group’s troubles were behind it. So a second administration in less than a year is a bitter pill.

One tells Drapers: “Suppliers all around the world are owed a lot of money. I can’t understand how a company, in whatever country, can be created with a structure of capital that does not give any guarantee to the liquidity that is being financed. The structure was so imbalanced and there was a lack of long-term investment.”

He continues: “Retail in the UK is going through a very difficult period. Our company has been here for nearly 30 years and we’ve never seen the UK market like this. It used to be the queen of Europe in terms of fashion. It is terrible to see it battling through so much difficulty.”

Another international supplier tells Drapers: “It is not ethical, moral or fair. We only see this in the UK. If you don’t have money to pay the suppliers, then you cannot buy the goods. It’s not only suppliers this affects but the staff, the image of the UK and the image of retail in general. I have been fighting for a long time, saying the government needs to change the law. Suppliers need to be involved in an administration and creditors all need to agree.”

  • What’s your view? Should the the law be changed to prevent CVAs? Email

 

 

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