ASDA’S iconic George clothing range has been a major success story for the Leeds-based supermarket chain.
Its success has left rivals Tesco, Sainsbury’s and Morrisons playing a very long catch-up game.
George, founded by veteran retailer George Davies, who went on to found Next and Per Una for Marks & Spencer, has created its own niche of budget fashion that hits the spot.
Indeed Blackfriar has often been complemented when wearing a £14 George summer frock kindly supplied by the company.
George currently accounts for around half of Asda’s general merchandise sales and is already a growing global brand through parent company Wal-Mart’s stores.
Yesterday Asda announced plans to take George to the Middle East as it explores opportunities to expand the brand overseas.
Now maybe Blackfriar’s flimsy summer frock will not prove such a big hit in the Middle Eastern market, but the George range has plenty of other garments that should appeal.
Asda will reveal exactly how many stores and where they will open during the next few weeks. The stores will open before the end of the year in a franchise agreement with a Lebanese company called Azadea Group.
Closer to home Asda has also come to an agreement with Sandpiper, a company based in the Channel Islands, which will be responsible for opening George franchises in both Jersey and Guernsey.
Asda says it has done its research and it will be working with two of the world’s most respected franchise businesses to establish the new George stores.
It said that both Azadea and Sandpiper have “vast franchise experience” from successful partnerships they operate with a number of other clothing brands.
To co-ordinate all of this Asda has set up a new team to establish, build and manage the franchise stores and develop the two partnerships. Asda said the team will ensure the franchise partners make sure the George brand is sold and merchandised around its “core values of style, quality and value”, ie, they won’t alter the George image in a way that could be detrimental to sales.
At a time when economies in the UK and Europe hover on the edge of a double dip recession, markets such as the Middle East represent an attractive alternative. This is a wise move for Asda and one that other Yorkshire companies should be adopting.
Another day, and another small Yorkshire firm decides to leave the stock market, seeking its fortune elsewhere.
The latest company in question, Atlantic Global, has opted for the embrace of a US software group backed by a multimillionaire. It has accepted the advances of KeyedIn Solutions, which likes the Cleckheaton firm’s business software. Atlantic had £2m in the bank in June.
The recommended offer at 22p per share values AIM-listed Atlantic at £4.9m – a hefty premium on its share price before takeover talks were announced. Even so, KeyedIn is paying less than Atlantic’s £5.2m market capitalisation upon listing in 2001.
Atlantic said it is “small and unlikely to deliver significant additional shareholder value either organically or by bolt-on acquisition in the short or medium term”. It added KeyedIn will help it grow, thanks to its scale and reach. KeyedIn has pledged not to make redundancies and instead wants to grow in Yorkshire.
Atlantic refused to elaborate further on its decision to sell up, the logic behind the takeover price, or deviate beyond its press release. It cited the Takeover Code for its silence – but a quick check with the Takeover Panel confirmed the company is not banned from speaking to the press, just restricted from imparting new information.
It’s a situation Blackfriar has seen before, and not one which fills him with confidence in companies’ transparency.
Shareholders, many of whom have clung on to Atlantic’s shares through thick and thin, at the very least deserve a thorough explanation from Atlantic’s independent directors. They need to be clear that the offer beats Atlantic’s other growth strategies, and the price is the best possible.
When the company initially said it was putting itself up for sale in September, two companies were competing to buy it. Blackfriar would like to know why KeyedIn won the auction.
Although a very different situation, Grimsby offshore services group Cosalt similarly refused to put its independent directors up to talk when it recommended a takeover approach from chairman David Ross.
The controversial decision to back a £400,000 offer from the Carphone Warehouse co-founder, (later doubled to £800,000), deserved a full explanation, not just a press release which had been through the PR filter.
Being a public company brings obligations, and justifying your decisions to shareholders is surely one of them.