(Sharecast News) – High street retailer Marks & Spencer is buying the Jaeger fashion brand out of administration.
M&S confirmed it was in the final stages of agreeing the purchase, with the deal expected to complete by the end of January. No financial figures have been disclosed. However, it is understood that Jaeger’s 67 stores will not be included in the sale, and they are now likely to close.
The acquisition is part of a strategy by M&S to bolster its clothing division by selling other brands, first announced by chief executive Steve Rowe last year. It has already agreed an online partnership with Nobody’s Child and collaborated with Ghost.
However, this will be M&S’s first fashion acquisition since the 2004 purchase of Per Una from George Davies for £125m.
Richard Price, managing director of clothing and home, said in a statement: “We have set out our plans to sell complementary third-party brands as part of Never The Same Again programme, to accelerate our transformation and turbo charge online growth.
“In line with this we have bought the Jaeger brand and are in the final stages of agreeing the purchase of product and supporting marketing assets from the administration of Jaeger Retail Limited.”
Jaeger was one of a number of businesses owned by entrepreneur Philip Day’s Edinburgh Woollen Mill Group. Sales and profits were pummelled by the Covid-19 pandemic and the brand went into administration in November, along with Peacocks, Austin Reed and Jacques Vert.
Analysts had mixed views on the deal. Michael Hewson, chief market analyst at CMC Markets, said: “It is hard to see how this particular acquisition will make that much difference to how Marks & Spencer is viewed by consumers, particularly in womenswear where it has struggled the most. After all, if Jaeger was such a great brand, it wouldn’t have gone into administration.”
But Clive Black, retail analyst at Shore Capital, said: “We welcome the acquisition for a low price, and look forward to observing a once find brand’s return, noting the need for the mothership to this brand breathe at its most comfortable, and not to subsume it into old M&S.”
As at 1000 GMT, shares in M&S were ahead a little over 1% higher at 136.3p.
Last week M&S revealed that clothing and homeware sales had struggled during the key festive trading period, tumbling 25.1% in the 13 weeks to 26 December, after fresh lockdown restrictions closed stores.
Overall, UK sales fell 7.6% on a like-for-like basis during the food quarter, with food up 2.6% and home sales off 24.1%.