Over the past few years, many have been impressed by the robustness of British luxury brands in the face of global recession. But why did Aquascutum fail where others flourished in austerity Britain?
Over the past few years, many have been impressed by the robustness of British luxury brands in the face of global recession. Burberry survived its embarrassing chav connotations as well as the global economic crisis in excellent shape as sales rose 21 per cent in the final quarter of last year. In the second half of 2011 fellow British brand Mulberry saw its profits treble. But Aquascutum, another quintessentially British luxury label and maker of a fine trench coat, has gone into administration, it was announced today.
A statement released by the Aquascutum blamed the economic downturn: ‘The challenging conditions in the UK, however, have unfortunately meant that the team have been unable to successfully turn the business around.’ But why did Aquascutum fail where others flourished in austerity Britain?
Some of the reasons are fashion related. Aquascutum might have jumped for joy when the Duchess of Cambridge wore one of their scarves, but it didn’t quite manage the transition from stuffy to cool that Burberry and Mulberry both mastered.
Mulberry ascended with the ‘It bag’, harnessing the power of celebrity by naming its bags after famous young hipsters such as the ‘Alexa’ (after presenter Alexa Chung) and the Del Rey (after singer Lana Del Rey) to attract the affluent, aspirational and fashion-minded. Burberry too somehow managed the transition from British stuffiness and chav-checks to dressing rock stars and marketing a new kind of ‘Cool Britannia.’ Aquascutum tried to follow suit, but didn’t quite pull it off.
The other reason for its demise is business related. In 2009 Harold Tillman sold the firm’s intellectual property rights in Asia to Hong Kong’s YGM Trading. Then the FT wrote that ‘The sale of the Asian intellectual property rights meant Mr Tillman was taking on the costly elements of Aquascutum, such as design, marketing and the flagship store in Regent Street, without the lucrative Asian royalties.’ At the time Tillman boasted of taking on Mulberry, but this may have marked the beginning of the end.
While many luxury brands are rubbing their hands gleefully at China’s seemingly endless appetite for luxury products, Spear’s has pointed out an equally important but less noticed trend: Many outwardly British luxury brands are now owned by Chinese businessmen. For instance, in 2002, Gieves & Hawkes was bought by Hong Kong property mogul Christopher Cheng; Harvey Nichols is owned by Hong Kong businessman Dickson Poon; Pringle of Scotland is owned by the Fang family; and the Queen’s former couturier, Hardy Amies, was rescued by Hong Kong fashion group Li & Fung.
Our money is on Aquascutum soon being bought on the cheap by another Hong Kong mogul. Watch this space.
Read more by Sophie McBain