In the past year, the UK economy has gone through a lot of difficulties with businesses facing a challenge to survive due to the high cost of living. Although the economy is struggling, larger retailers in the United Kingdom are using this as an opportunity to acquire other businesses.
Next and Sports Direct owner, Frasers Group, are among the retailers who have recently acquired several brands and shopping centres. Let’s take a closer look at how these companies are managing to defy the odds in these difficult times.
What brands has Next acquired and how has it helped profits?
Firstly, Next, a popular UK retailer, has been acquiring brands that have gone into administration during the economic turmoil. There have been three recent examples of brands being added to Next’s portfolio; Made.com and Joules are the first two of these, and the third and most recent addition is the floral fashion brand, Cath Kidston.
Next has reported a 5.7% increase in annual profits, amounting to a huge £870m, along with an 8.4% increase in sales despite the difficulty in current circumstances. This shows that the company has successfully handled the challenges posed by the current economic situation and has clearly used them to their benefit.
Next buys Cath Kidston brand for £8.5m with remaining UK stores to close https://t.co/R9EseJeEua— The Guardian (@guardian) March 28, 2023
What other brands are being merged and what future plans do they have?
Moreover, Frasers Group, the owner of Sports Direct, is amongst the major entities that have also benefited from this situation. In the past few years, the company has obtained a number of brands, such as Jack Wills and Evans Cycles. In addition, they have expanded their business to include the ownership of shopping centres in Luton and Dundee, as part of their venture into the property market.
Frasers Group is relying heavily on their “elevated store concepts” strategy, and these shopping centres will serve as a platform for them. The company plans to enhance the shopping experience for its customers by having more control over the store layouts, which has been made possible by owning the properties.
It's really interesting to see Next becoming an Emporium of brands, They've just added Cath Kidston to their coterie, after taking on both https://t.co/ZkOcV3yNHF and Joules.— Monique Drummond (@MoniqueDrummond) March 29, 2023
Very positive that brand devotees can still buy the…https://t.co/ENw0oDb4o5 https://t.co/ORo1FITIjH
Why are the strategies behind the acquisitions?
It’s worth noting that these retailers are not simply buying struggling businesses without thought, but are instead choosing companies that align with their brand strategy in a strategic and cautious manner.
Next acquired Made.com and Joules to grow their home and lifestyle line, while Cath Kidston is a suitable addition to their current fashion ranges. Then there’s Sports Direct, who acquired Evans Cycles as a planned strategic move to enter the growing cycling market.
Therefore, it will be interesting to see how these acquisitions will play out in the long term, and what other companies could possibly take advantage of the economic climate to potentially grow their businesses as well.
There are certain companies in the UK retail industry that have thrived despite the difficult economic conditions. Frasers Group and Next have both successfully acquired struggling businesses and transformed them into significant players in their respective markets.
The companies are applying careful acquisition strategies to increase the range of their brand offerings and enhance the in-store experience for customers. Despite the economic turmoil, these retailers are certainly demonstrating their ability to flourish and achieve long-term success.