Findel Puts Kitbag Up For Sale
Just less than 3 years after the acquisition of Kitbag Ltd from European Home Retail, Findel PLC have put the Middleton-based online sportswear retailer up for sale.
They haven’t done a bad job at all given that when they took control the retailer was making a loss, turning this around to a £500k profit (according to their most recent published accounts) is no easy task and credit should be given where it is due.
Findel however are going through tough times, Only last week they announced they were considering an equity issue to pay down some of its debt burden of more than £300m. Along with the closures of Letterbox.co.uk and The Coltswold Company, it would appear their strategy of acquiring establishing online retailers doesn’t appear to be giving the returns they had hoped for.
Findel will expect to reclaim around £12m by selling Kitbag and given the relationships formed to manage the online stores for Manchester United, Barcelona, Real Madrid and other leading soccer clubs as well as Formula 1, Ryder Cup and the British Lions, a number of private equity companies are showing an interest.
Kitbag being the third online retailer for Findel to let go of in one way or another obviously raises questions, Studio 24 shut down their affiliate programme on the grounds of “current trading conditions” and it looks like the group is struggling to embrace the online channels in the same way as it thrives in the mail order / catalogue channels.
If your promoting them, it’s worth keeping an eye open to see what happens.
I’ll Shut Up Now …
June 9th, 2009 at 11:17 pm
Concerning that Findel are letting so many of their online retailers go in one way or another, certainly worth keeping an eye open if you are an affiliate of any of their online retailers.
June 15th, 2009 at 4:32 pm
There are a number of questionable elements in this article which should be pointed out.
The statement “According to their most recent published accounts” suggest a contempt for the accounts. Just to clarify, in line with PLC UK business legislation these are independently audited accounts to which you refer.
Letterbox was not closed, it was sold to Hawkins Bazaar and will be remarketed later this year when the new owner has decided the strategic route for the brand.
You state “Along with the closures of Letterbox.co.uk and The Coltswold Company, it would appear their strategy of acquiring establishing online retailers doesn’t appear to be giving the returns they had hoped for.” Neither of these were “online businesses” they were retailers with a website. There is a huge difference.
The two businesses that were online were Kitbag and IWOOT, both of which made a profit last year.
You state Studio 24 shut down their affiliate business.
Its 24studio BTW and the affiliate program became a closed program and was not “shut down” as you state here. 24studio still work with a suite of affiliates through the AW and CJ networks and the program is actively and well managed.
Online sales last year for 24 Studio were in excess of £54m and totalled over 1.4 million individual orders; this doesnt come from inertia, it comes from a fully integrated marketing campaign of which online is a fundamental component and is actively embraced; contrary to your assumption.
I think its worth pointing out the axe you have to grind too Paul, I dont expect this to be published, but surely stating your bias as a former employee of the said group would be prudent to ensure no conclusion of impartiality is incorrectly frawn with regards to this article!
June 15th, 2009 at 4:51 pm
Thanks Craig,
Interesting response, especially as this was in no way an attack on Findel or their business, merely an account of how I see the facts.
I find it interesting that you are picking apart the terminology used: “According to their most recent published accounts” - I’m not debating the fact that these are legitmate or not, if it says you have made a profit then you have made a profit, I was merely stating that this is what they say.
“Letterbox was not closed, it was sold to Hawkins Bazaar and will be remarketed later this year when the new owner has decided the strategic route for the brand.”
My perception of this will be down to the communication then, because I recall the landing page that was their before the one that is there now saying “Letterbox.co.uk has been closed” not sold …. it said closed. Maybe to return sometime in the future…
Whether Cotswold and Letterbox are “online” companies or not can be argued for the rest of time, with the sheer percentage of revenues generated from the websites for both I’d class them as online businesses, maybe you wouldn’t but happy to agree to differ.
Again with Studio 24 or 24 Studio ;o) - The perception I’ve been given is that the affiliate programme has been closed, if you’ve merely closed the door to new business and have kept all of your old affiliates running the programme then my bad, I say it as I see it Craig.
Lastly my first ever post on this blog says I worked for IWOOT who were a part of the Findel group - I have no axe whatsoever to grind with IWOOT or Findel and left under very good circumstances. I still keep in touch with IWOOT frequently and only wish you all well.
I’m not entirely sure why you jumped to such a defensive response Craig and apologies if I caused you any offense. None intended, and your response is much appreciated.
June 16th, 2009 at 9:31 am
Hi Paul,
My article, like yours, was also my interpretation of the facts too. My concern with your post is potrayal of Findel bumbling along and in particular the 24studio brand.
I take your point regarding Letterbox, but be assured it has been sold and will refloat later this year.
You stated “Kitbag being the third online retailer for Findel to let go of in one way or another obviously raises questions, Studio 24 shut down their affiliate programme on the grounds of “current trading conditions” and it looks like the group is struggling to embrace the online channels in the same way as it thrives in the mail order / catalogue channels.”
Well that’s one point of view, but clearly as and advocate of Findel it would be wrong not to respond to what amounts to a very negative article as I am sure you would if you were still championing the cause for IWOOT and saw something similar.
I could sum up a response in one word, but being a marketeer why say one word when several will do! Also I would probably cause offence and it would not give me the opportunity to negate the “intepretation of the facts”.
Regarding 24studio affiliates -
Prior to reigning in the activity, some rogue affiliates were brand bidding whenever they could get away with it, using other underhand tactics such as arbitrage, and generally taking advantage of the business arrangement which sees them getting paid commission on gross sales whether we can convert the customer or not. This wasn’t in anyone’s interest for a long term business relationship and simply leaving the program running as it was made no commercial sense.
Now our closed program affiliates serve the business well and drive incremental revenue, in my view this is the whole point of working with affiliates - and I personally thank them for their hard work. I fail to see how this can be seen as “struggling to embrace the online channel”, in fact it is the reverse, it is embracing the online channel to ensure it remains commercially mutually beneficial, a strategy which we try and use in every aspect of our direct marketing, both on and offline.
It’s fair to say Findel is going through a period of change but I think you will find it is actively embracing online, but at the same time making commercial decisions that ensure its long term viability.
In my view, as an employee this should be commended and I will always jump to the defence of the business accordingly.
Regards
craig
June 16th, 2009 at 11:18 am
Thanks Craig
Again a well thought through response and much appreciated.
I’m not going to debate the commercial viability of running the closed affiliate programme with you, as already stated I thought you’d shut the thing completely and thanks for putting me straight.
I do however stand by my point that it appears to me that Findel haven’t embraced online effectively given the speed in letting some of it’s online (maybe not pureplay) retailers go.
However as you stated, going through a period of change is no bad thing and it’s always interesting to see how corporate giants like Findel reposition themselves.
After all thats what this article was about, debating whats going on and why.
July 20th, 2009 at 2:20 am
[...] I first Started this blog a few months ago I made a post about Findel Potentially Putting Kitbag.com up for sale which was met with quite a lot of feedback from one of Findel’s [...]