PE-backed fashion chain Jaeger entered administration on Monday after failing to find a suitor. The company, which dates back to 1884 and once attracted illustrious customers such as Marilyn Monroe and Audrey Hepburn, has failed to turn a profit since Better Capital bought the retailer for £19.5 million in 2012.
Jaeger joins a long list of high-street retailers that have fallen from grace recently. Many in the sector have suffered from difficult trading conditions in stores, a failed (or non-existent) online strategy or have simply gone out of fashion as a new generation of consumers display little brand loyalty.
Just this week, German outdoor specialist Jack Wolfskin has reportedly sought to restructure its debt with its lenders, while its owner Blackstone is seeking a buyer. Other PE firms have already cut their losses. In March, 3i sold Agent Provocateur for about £31 million after the lingerie seller entered administration. The same month, Alteri shipped Jones Bootmaker to Endless in a pre-pack sale.
The tough environment has slowed down PE activity in the sector, per PitchBook data. Both deal count and deal value for retail and apparel & accessories companies peaked in 2015. However, capital invested dropped by a whopping 62% in 2016, and while we are only at the beginning of 2Q, this year has begun with a sluggish start.
Fashion constantly re-invents itself. Yet even with the help of PE, whether the same can be said for high-street sellers is not so certain.
PitchBook subscribers can get the underlying data on retail PE buyouts by clicking here.