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Just 12 Marcs and David Lawrence stores will be operating after the sale of the embattled fashion retailers to Myer, its administrators have confirmed.
Myer struck an agreement to acquire the two brands from the administrator for an undisclosed sum on 12 April.
Under the terms of the deal, the ASX-listed department store will acquire the brands, intellectual property and inventory of both Marcs and David Lawrence, and is working with the administrator on the future of the brands’ concessions, standalone stores and arrangements with other retail partners.
Both brands will also continue to operate within Myer as shops within the wider department store’s footprint.
Myer chief merchandising and customer officer and deputy CEO, Daniel Bracken, was delighted the retail giant was able to acquire the two iconic Australian brands, saying the purchase strongly aligned with the ‘New Myer’ strategy being orchestrated across the group.
“Marcs and David Lawrence are two of our most productive and sought-after brands in our stores, and we are very pleased they will continue to be available at Myer,” he said.
“We are also pleased that
through this acquisition, we hope to be able to secure the future
employment of a number of the Marcs and David Lawrence people. However,
at this time, it’s too early to say how many team members will
transition to Myer.”
Myer also owns standalone fashion label, sass & bide.
Marcs and David Lawrence were both owned by retail group, Webster Holdings, which was established by Jigsaw co-founder, Malcom Webster. Webster acquired David Lawrence in 2000 from the Truworth South Africa Group, and Marcs from the Oroton group in 2006.
The two brands were placed in voluntary administration in February after collapsing under what was believed to be close to $30 million in debt, including $3 million in worker entitlements and a $7 million debt to the tax office. Between them, the two brands had 1130 staff across 52 standalone stores in A/NZ, plus 11 outlet shops and 140 concessions in major retailers including both Myer and David Jones.
Chartered accountant, Rogers Reidy, was brought in as administrator on 2 February to find a buyer for the business. In an interview with the SMH at the time, director, Geoffrey Reidy, said he was optimistic about the outlook for the brands, but highlighted the need for a restructure, adding staff costs were among the highest in the retail trade.
“As well as securing the future of two iconic Australian brands Marcs and David Lawrence, Myer’s acquisition is in the interests of creditors. We are very pleased with the outcome," Reidy said in a statement.
A Myer spokesperson said details in relation to the two brands' standalone stores are being worked through between the parties, but that Marcs and David Lawrence store closures are expected.
In a further statement, the administrator confirmed 36 stores would be closing in the next week across the two brands out of a total of 48 operating prior to the sale to Myer. It also confirmed 130 casual staff will lose their jobs as a result of the closures, with the balance of staff being given the opportunity to be offered employment by Myer.
Across the concession store mix, 115 are still operating, 67 within Myer stores, and 48 in David Jones.
David Lawrence and Marcs are among a host of Australian retail businesses that have faltered in the face of increasing global competition, omni-channel consumer expectations and connected customers.Others include Pumpkin Patch, Rhodes & Beckett and Dick Smith.
Myer isn’t a stranger to strife either, and launched its own turnaround strategy, dubbed ‘new Myer’, in November 2015 in a bid to ensure relevance with modern consumers. The $600m transformation plan based around four key pillars: Customer-led offers, omni-channel shopping capability, wonderful experiences and a productivity step change.
In its half-yearly financial results presentation in May, Myer CEO, Richard Umbers, said work was well underway on longer-term initiatives to support the New Myer approach, while also highlighting the raft of new premium brands and experiential improvements to its in-store experience.