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Friday, 21 September 2018

Kate's fashion CURSE: Her magic touch sends her favourite brands' sales soaring, but as Orla Kiely, LK Bennett, and Alice Temperley found out, having a piece in the Duchess's wardrobe can be a jinx

  • Over the years several of Kate's favourite designers have suffered big losses
  • The 'Kate Effect' has boosted the economy by around £152 million a year 
  • Shoppers more likely to buy one-off items rather than becoming loyal customers
For any fashion designer, having a member of the royal family wear your clothes is the ultimate endorsement, guaranteed — one might think — to send sales soaring.
But when that royal is the Duchess of Cambridge, it seems, her sartorial support can be counterproductive.
Over the years, several of Kate's favourite designers — high-end and High Street — have reported financial difficulties, crippling losses and, in some cases, been forced to shut up shop completely.
The latest casualty is Orla Kiely, the Irish fashion retailer which this week collapsed and closed all its stores after a slump in profits.
The latest casualty is Orla Kiely, the Irish fashion retailer which this week collapsed and closed all its stores after a slump in profits.
Fashion experts say there may be a link between Kate's backing of a fashioner designer and financial woes further down the line. She is pictured (left) wearing Issa and (right) wearing Orla Kiely
The latest casualty is Orla Kiely, the Irish fashion retailer which this week collapsed and closed all its stores after a slump in profits.
And rather than being coincidental, fashion experts say there may be a link between Kate's backing of a fashion designer — and financial woes further down the line. 
For although clothes fly off the shelves at first — the so-called Kate Effect has boosted the UK economy by £152m a year — this requires a huge increase in production. 
As a result, many retailers take out loans, rack up debts they can't pay and end up on the brink of bankruptcy.
What's more, customers acquired this way tend to buy one-off items rather than become loyal shoppers — and then move on when Kate debuts a new look. As one designer endorsed by the Duchess put it, it's like being hit by a 'tsunami of global interest'.
So who's fallen victim to the Curse of Kate?L.K.BENNETT: SALES SLUMP  
A royal wardrobe essential, High Street label L.K.Bennett has become something of a trademark for the Duchess — particularly its nude Sledge platform courts (£195), which Kate rarely leaves the Palace without. She owns six other styles from its footwear range, most of them in patent nude, as well as an array of similarly hued handbags, such as the Nina clutch, which she carried to an event at the National Portrait Gallery in 2016.
Kate (right) wore this red LK Bennett dress when she visited a helpline service run by one of the eight charity partners of Head Together
Kate (right) wore this red LK Bennett dress when she visited a helpline service run by one of the eight charity partners of Head Together
One of her most memorable looks was the £245 blue-and-white Lasa Poppy dress, which she wore to a tour of an Australian air base in 2014; plus the £400 floaty number she donned to meet Barack and Michelle Obama in 2016 — both of which were instant sell-outs.
She also owns the striking red Ami coat, which she's worn four times since 2011, and the teal Jude jacket, which she wore on a walkabout in Leicester with the Queen in 2012. Here, she is wearing the £225 Eugenia dress in red
FINANCIAL LOSSES: Earlier this year L.K.Bennett reported losses of £5.9 million in 2016/2017, compared with a £100,000 profit in the previous 12 months. Total sales also fell by 1.8 per cent to £77.4 million. The company blamed the figures on 'exceptional costs' of £28.7 million, spent on corporate restructuring.
OTHER WOES: Last month the company was hit by an IT glitch, forcing it to cease all online trading for three days. Unhappy customers were stopped from buying anything new from the website, and there was a delay in dispatching existing orders.
WHAT THEY SAID: 'Clearly, the results for this period were unsatisfactory and we have taken decisive action to improve performance.'
HOBBS: FINANCIAL WARNING  
Sloaney staple Hobbs — founded in 1981 by London couple Yoram and Marilyn Anselm — is one of Kate's High Street favourites. She wore the brand long before she entered The Firm.
Kate (left) wore this Hobbs teal coat during a visit to Whitehorse in Yukon Territory, Canada, with Prince William (right)
Kate (left) wore this Hobbs teal coat during a visit to Whitehorse in Yukon Territory, Canada, with Prince William (right)Her most-worn Hobbs pieces are coats — most memorably this £279 emerald green Persephone trench she wore on St Patrick's Day in 2014, and dresses, such as the £169 Animal shirt dress she chose for a charity event in London in 2015. She also turned to Hobbs for her final engagement before giving birth to Prince Louis, in March this year — the £79 polka-dot Rosie top — which promptly sold out worldwide.
FINANCIAL LOSSES: In 2015, Hobbs racked up pre-tax losses of £15.6 million, after a management shake-up left it with hefty legal fees. The previous year, it was forced to ditch its sister brand, NW3, after a £1.9 million loss.
Even though gross profits jumped 8.7 per cent in 2017, earlier this year, it was named one of the UK's loss-making retailers, with financial analytics firm Company Watch placing it in its 'warning area'.
OTHER WOES: In 2017, Hobbs was put up for sale by private equity firm 3i, which bought the business for £111 million in 2004. Its new owner, the South Africa-based Foschini Group, which owns Whistles and Phase Eight, thought the £80 million asking price too high, and secured it for an undisclosed sum.
WHAT THEY SAID: 'Our sales are up, gross profit is up, our margin rates are steady and we now have a very strong platform to grow.'
ORLA KIELY: COLLAPSED OVERNIGHT  
Kate has been wearing the Irish designer, known as 'The Queen of Prints', since 2011, when she was crafting her early royal looks.
Her first high-profile outing in Orla Kiely came in February 2012, when she wore the brown wool 'Birdie' dresscoat to visit a school in Oxford – and ended up with a splodge of red paint on the sleeve. Ever-thrifty, she wore the coat again in November 2013, on her return to the spotlight after Prince George's birth.
She also owns a grey pleated dress by the designer, which she wore for a charity engagement in October 2015, and this powder pink appliqué frock which she donned at Paddington station in November 2017. Most recently, she chose the Leith Margaret smock dress, a £490 mid-length black floral design, for the opening of an exhibition at the National Portrait Gallery in March.
Mum Carole and sister Pippa are fans, too, with Carole sporting a blue polka-dot dress to hospital to meet Prince George in July 2013, and Pippa wearing a £120 white Kiely blouse on her honeymoon.
All of Kate's outfits sold out within 24 hours, with designer Orla, 55, who set up the brand with her husband, Dermott, in 1995, delighted by the royal endorsement. 'We don't know in advance,' she said in 2017, 'so it's a case of, 'Holy smoke!' '
FINANCIAL LOSSES: The brand went bust overnight this week, closing all five of its shops, ceasing online trading and going into voluntary liquidation. Liquidators blamed the collapse on 'challenges' in recent years. Profits fell from £109,000 to £74,000 last year, according to Companies House records, although turnover grew from £7.2 million to £8.3 million.
OTHER WOES: Staff were reportedly escorted out of the building in tears, with one source saying they were told they wouldn't be paid for three weeks' work. It was also said that Kiely and her husband paid themselves £400,000 as the fashion empire was on the brink of collapse.
WHAT THEY SAID: 'We apologise for any inconvenience caused . . . Thank you for embracing our brand and designs throughout the years and for your ongoing support.'ISSA: DESIGNER QUIT BRAND 
When a youthful Kate Middleton appeared on TV with her new fiancé Prince William on 16 November 2010, wearing this blue wrap dress by sleek womenswear brand Issa, it should have been the best day of founder Daniella Helayel's life. 
The Brazilian - born designer, who started making dresses when she came to Britain in 2000 and built a cult celebrity following, said her company had been in 'serious financial trouble' — but Kate turned its fortunes around. 
The £400 garment sold out in five minutes and was reordered 'countless' times, with one New York department store buying 1,100. 'We soon knew Kate was wearing Issa because the phones began ringing and didn't stop,' Daniella explains. 
'It was bonkers.' Kate had worn the label previously, buying dresses directly from Daniella's studio, but the designer had no idea the dress would feature on such a momentous occasion. 
At its peak, the brand's value boomed to £47million. But the Duchess's endorsement also triggered its demise. 'I didn't have the money to finance production on that scale. 
The bank refused to give me credit and the factory was screaming for me to pay its bills,' says Daniella. 
Later that year, she sold 51 per cent of the business to close friend Camilla Fayed, daughter of Egyptian magnate Mohamed Al-Fayed. But relationships soured and in 2013 Daniella quit as creative director. 
Issa closed two years later. Having cut all ties, Daniella did produce special £200 versions of her iconic dress for a United Nations moneyraiser in 2016, then launched a new clothing line of her own, Dhela, in 2017. 
FINANCIAL LOSSES: Issa ceased operating in December 2015, with final company accounts showing annual losses of more than £4.3 million. 
OTHER WOES: In 2017, the department store House of Fraser bought what remained of the brand, taking it on as one of its in-house womenswear labels. Yet 12 months later House of Fraser, too, is in dire straits. Having announced 6,000 job losses and the closure of 31 stores, it's been bought by Sports Direct tycoon Mike Ashley. 
WHAT SHE SAID: 'I had a great business, which I'd built up on my own over a decade. To watch it evaporate was heartbreaking.
ALICE TEMPERLEY: £9 MILLION LOSSES 
The bohemian British brand is a favourite of Kate's — for everything from casual days out (the embroidered blouse she sported on her 2011 Canadian tour) to formal occasions (the green lace gown she wore to a London gala in March 2017).
Kate (left) wore this Alice Temperley dress to The Portrait Gala fundraising dinner in London in March 2017
Kate (left) wore this Alice Temperley dress to The Portrait Gala fundraising dinner in London in March 2017She chose Temperley London, founded by 43-year-old Alice — dubbed the 'English Ralph Lauren' — for a post-engagement outing to Wimbledon in June 2011, and again in 2014, when she wore a daring black cut-out number to a London charity event. 
Both times the garments, which can cost up to £5,000, sold out overnight, with fans flocking to the website.
In a 2013 interview, Alice, who said she received no prior warning when Kate was about to step out in one of her creations, described The Duchess as 'the perfect modern-day woman'. 
With Carole and Pippa both also Temperley fans — not to mention a host of celebrity devotees including Beyoncé, Emma Watson and Heidi Klum — it seemed its future was secure. But beneath the surface cracks were beginning to form.
FINANCIAL LOSSES: In 2016, reports showed losses of more than £9 million over five years. In both 2011 and 2012, Temperley Holdings lost more than £1 million, followed by pre-tax losses of over £5.8 million in 2013.
In 2014, the company posted losses of £2.8 million, with auditors warning of 'material uncertainty' over the brand's future. 
Well-connected Alice secured a £1.8 million bail-out from 20 wealthy friends to stop the business going under. And in January it was reported that things may be turning round with growth almost doubled to 9 per cent.
OTHER WOES: Alice's business troubles coincided with the breakdown of her marriage to German financier Lars von Bennigsen, whom she married in 2002. The pair, who have an eight-year-old son, Fox, separated in 2011.
She put Cricket Court, her beloved listed Somerset mansion and the venue of her extravagant summer parties, on the market in 2016, slashing the price by £250,000 to £2 million after it failed to sell.
WHAT THEY SAID: 'Temperley London's business continues to develop strongly on the back of a newly focused strategy.'

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