The contrarian view: Footasylum’s journey
Most investors have shied away from the retail sector in recent years, but the journey and recent successes of Footasylum under AURELIUS’s stewardship suggest that fortune really does favour the brave.
It’s a tough time to be in retail. Particularly with the tricky costs of fixed overheads, inflation impacting the supply chain, and rising labour wages in post-Brexit Britain. This is why the journey of Rochdale-based Footasylum is so impressive. The UK footwear and athleisure retailer saw sales up 6% in its financial year to 28 January 2023 in spite of a challenging environment for most consumer businesses globally. But there is much more to Footasylum than retail – amongst others, the company is a disruptive entertainer, a brand incubator, a trend indicator.
Footasylum’s confident pursuit of top-line growth flies in the face of many other retailers. Part of it may be down to the fact that footwear is less affected by downturns than other areas of consumer discretionary spend, and much of it will be down to the private equity backing Footasylum received in 2022 – when a UK Competition and Markets Authority anti-trust remedy processes provided AURELIUS with an opportunity to carve Footasylum out of its listed parent JD Sports Fashion plc.
Since the transaction was agreed, attention shifted to strategic priorities. An ambitious growth programme is centered around operational transformation, expanding the store network in key locations (such as the London corridor) and turbocharging the wholesale business.
Expanding the footprint
Funding and support from AURELIUS is underpinning the growth journey, with results already visible within the first year. Mid-September saw a new store open in Lakeside Shopping Centre, Essex, which at 10,000 sq ft is more than 3x larger than its predecessor. The increased floorspace has meant 30 new members of staff joined the team. Lakeside is one of a number of existing locations to upsize, with Stratford City already enlarged and more planned for Footasylum’s sites in Birmingham Bullring and Leeds White Rose.
Hands-on with footwear: AURELIUS’s experience in effecting corporate carve-out transactions as well as its proven track record in operational transformation is supported by its 150+ operating specialists. Part of this includes niche expertise in fashion & footwear, with AURELIUS having backed Scholl Shoes since 2014, and FitFlop since 2021, when AURELIUS Finance Company supported the ergonomic footwear company’s successful turnaround before providing further capital for growth in 2023.
It’s not just bigger, it’s also better, reflecting Footasylum’s recent investment into its digital capabilities: the Lakeside layout and shopping experience is the most technologically advanced store yet for the firm, offering customers a connected omnichannel shopping experience to create a seamless mobile-first customer journey, including click-and-collect lockers.
In addition to the expanding existing sites. The end of 2022 saw a new store in Cheshunt – Footaslyum’s first new store opening since April 2021 – and another earmarked for atria Watford. An entirely new flagship store opened on 21 September on London’s iconic Oxford Street, with 20,000 sq.ft of store occupying two floors. Today the firm operates over 60 locations across the UK.
Expanding Footasylum’s geographic footprint is just one of the aims of the partnership with AURELIUS, which has also seen a deeper push into digital. In addition to selling a range of products from mainstream sportswear brands and premium fashion labels, the company also supports new and upcoming brands in the street and sports fashion scene. To boost its marketing efforts across all of these channels, Footasylum now operates an industry-leading content creation platform with benchmark followership on well-known social media channels, helping to boost its marketing.
Within the first year of partnership with AURELIUS, Footasylum has grown its number of sites in the UK as well as its headcount.