The international retailing world is continually evolving and trying to fit into a newer digital world. So how do these brick-and-mortar stores survive? With little room for new brick-and-mortar brands to emerge, companies like Bluestar Alliance, with their expertise and finances, choose to acquire established but struggling brands to add to their portfolio in hopes for a rebirth.
For a bit of background, Netherlands native Scotch & Soda has filed for bankruptcy and Bluestar Alliance has decided to pick up the check. Scotch & Soda is a clothing brand that carries denim, business casual clothing, and accessories at a higher-end price. Their clothes range from $100-$400 with accessories like socks starting at $28; it is very popular in cities like Amsterdam. The brand is considered to have a niche target market with its pricing, responsible denim sourcing initiatives, and its commitment to its charity partnerships. So why does Blue Alliance feel that it is a good fit for its portfolio? This acquisition firm currently owns brands like Bebe, Brookstone, and Hurley – all incredibly different types of retailers.
Many retail brands are facing bankruptcy risks over the past several years due to the transition of buyers preferring to shop e-commerce. Certain brands are not able to compete with the ease and convenience of online brands and possibly have a lower budget due to the decline of sales. Although Scotch & Soda does have an online presence, it does not see itself as an e-commerce brand. The company has been heavily spending its revenue on marketing collaborations and investing in flagship stores. Smart move? Probably not. That is where American born Blue Alliance comes in! According to a spokesperson for the brand conglomerate, the purchase will “allow for the continuation of the brand and its products across key markets including the Netherlands.” Blue Alliance sees Scotch & Soda as a unique brand that attracts social-conscious Millennials who appreciate luxury and well-made clothing. It will continue with its original retail strategy and as of now, stores will remain open. Blue Alliance sees that Scotch & Soda’s success stems from consumers shopping in stores, physically touching the clothing, and experiencing the first hand customer service experience – perhaps the plans just need to be tweaked (scrap plans for large flagship stores!). With some budgeting and downsizing, Blue Alliance feels that Scotch & Soda has great potential to not only remain an on-trend brand for Europe, but can possibly expand its popularity to the U.S.!
Time will tell if that acquisition is optimal for both companies. Blue Alliance has maintained its portfolio of brands so far and management on both sides believe that this is a lucrative transition to a modern retailing future. With Blue Alliance’s revenue, knowledge of international retail, and history of success, it seems that it is able to meticulously select brands that have great potential. For Scotch & Soda, it will receive a stream of cash that will not only help it stay afloat, but can expand to more unique initiatives that represent their customers today. How do you feel about Blue Alliance keeping Scotch & Soda a brick-and-mortar retailer?
https://www.retaildive.com/news/scotch-soda-acquired-bluestar-alliance/646039/
https://www.scotch-soda.com/us/en/discover-plastic-whale.html