Shirtmaker Nicholas Jermyn went into voluntary administration in early May, and closed two of its 10 stores across New Zealand shortly afterwards. We spoke with founders Nick and Shannon Harris about the cause of its financial trouble.
The crux of the issues facing Nicholas Jermyn is that the retail scene has been changing faster than the company can adapt, Harris says. Commercial leases meant it was tied to a number of poorly-performing bricks and mortar sites while online retailers from overseas competed for business.
“It’s just a much bigger playing field,” says Harris.
The high street in New Zealand itself is “pretty fierce,” Harris says. He spoke of aggressive discounting strategies being employed by other retailers, saying Nicholas Jermyn preferred to employ ongoing multibuys and other promotions.
Harris says in the last 12 months, the Nicholas Jermyn team has made an effort to remove poorly-performing stores, but the work of renegotiating leases could not be completed before it became necessary to enter administration. The company has gone from 12 stores at this time last year to seven.
“It’s really important to make sure all stores are making a good contribution.”
Shannon Harris cited constant change in the retail landscape since 2011-2012, saying three to four stores became unprofitable “very quickly”. The scope of Nicholas Jermyn’s financial difficulty is still unknown.
“Just about overnight, our revenue, the same as everyone elses’, started to migrate online.”
Now that Nicholas Jermyn is in administration, change can take place much faster. Five of the businesses’ 35-40 FTE staff have been lost, but it will continue to trade and service customers under the new model.
“It’s already more of a business as usual scenario,” Nick Harris says.
He says he has been touched by the supportive correspondance from customers after the company’s situation became public: “They’ve been buying at unprecedented levels, really.”
The Harris’ believe the retail model is changing to favour fewer bricks and mortar stores and more online investment. Further investment in any part of the company is inappropriate at this stage, they say, but may be on the cards when Nicholas Jermyn’s financial situation is stabilised.