ANALYSIS:CLOTHES SWAPPING is supposed to be all the rage in the post-crunch era, but in the courts of debt-stricken Iceland yesterday, the scene was set for entire clothing chains to change hands, writes Laura Slattery.
The face of fast fashion in the Republic will be transformed if Icelandic investment group Baugur goes into administration, which it is now expected to do over the next few days following Landsbanki's decision to call in its debts.
Such a move is likely to result in brands from the Mosaic Fashions stable, in which Baugur has a 49 per cent stake, being put up for sale. Interested parties are destined to include Philip Green, owner of the Arcadia fashion group and close personal friend of Kate Moss, and Alchemy Partners, the private-equity group that backed the management buyout of A-Wear in 2007.
Baugur's presence on the Irish retailing scene reads like a Saturday shopping itinerary for women who either shun or can't afford designer labels, but at the same time are looking for something with a bit more sustainability than a flimsy discount store offer.
The Mosaic group, which has around 130 outlets here, owns Oasis, Karen Millen, Warehouse, Principles and wedding guest outfit staple Coast. It also owns Shoe Studio, which it is already seeking to offload. Some of these clothing chains are likely to be of interest to Philip Green, who will want them to complement rather than compete with his flagship fashion brand, Top Shop.
Baugur also has a 35 per cent stake in House of Fraser and a stake in toy chain Hamley's, which like House of Fraser, has its only Irish outlet at the Dundrum Town Centre. Many of the Baugur brands have expanded their Irish floor space in recent years, with Karen Millen signing up for a record high rent of more than €1 million when it opened its Grafton Street store in 2006.
Mosaic Fashions saw Irish sales rise 52 per cent to €110 million in 2007, the last year for which accounts are available, but has been hit by the slowdown in the retail sector since then.
In July, Irish unit chairman Ian Galvin said stores no longer carried reserves of stock, but marked down everything that had not sold after six weeks.
Some Mosaic brands such as Oasis have introduced 10 per cent "exchange rate bonuses" in stores, although keen-eyed shoppers will have noticed that euro prices still seem to cost more than their sterling equivalent.
It is a grim time for debt-laden clothing retailers: according to the Central Statistics Office, clothing sales volumes have dropped almost 7 per cent in the past year, suggesting that even as bigger price cuts become prevalent, shoppers will remain stoic.
