Magazine article Marketing

Jessops

Magazine article Marketing

Jessops

Article excerpt

The photography chain's recent woes have been capped by a forced restructure.

The strapline for the photographic retailer Jessops is 'Advice for life'. Given its recent woes, the company may need to avail itself of this if it is to continue.

Last September Jessops' parent company, Jessops plc, was forced to sell its remaining shops and online retail site to Snap Equity, a company comprising its biggest creditor HSBC, which was owed pounds 54m, along with its pension trustees and an employer trust.

The restructure, which prompted Jessops plc to enter voluntary liquidation, was forced on it by rising debts and increased competition from supermarkets and internet sellers.

This fire sale marked the lowest point in the specialist retailer's history, but it is not the first time that Jessops has been forced to take dramatic steps in reaction to challenging market conditions. In 2007, it closed 81 of its 315 stores in a bid to cut costs.

Less than a year later, the company axed the assistant manager role and shut its flagship World Photo Centre store in Leicester, the town where Frank Jessop had founded the chain more than 70 years beforehand.

Given that one of Jessops' biggest difficulties has been its loss of market share to supermarkets, the irony of selling the site to Tesco cannot have been lost on its management.

What hope does Snap Equity have of doing a better job? We asked Kate Cox, head of creative communications at media agency MPG, who has worked on Boots' photo business, and Andrew Hawkins, managing director of DCH, which handles the Nikon account.

DIAGNOSIS

- Two industry experts offer some advice on how Jessops can refocus

KATE COX - head of creative communications, MPG

Brand expansion must have seemed like a good business strategy in buoyant times, with Jessops conducting a major store-opening programme in the early part of the decade and extending into product ranges such as satnavs.

However, in more difficult economic circumstances it looks a tad profligate. After all, alongside the music industry, the photographic sector has been at the sharp end of business model reinvention caused by the impact of technological innovation.

Indeed, many famous and important brands, including Kodak, Polaroid and Pentax, have been left fighting to survive and evolve. It is little wonder, therefore, that Jessops is having a hard time.

The chain's decision to widen its focus beyond its core target of photographic enthusiasts and play in the mass market has eroded profit margins further. More importantly, this has distracted it from developing an understanding of the fragmentation of this core audience resulting from the differential uptake of technology such as home-printing devices and home use of 'professional' photo manipulation packages. …

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