British fashion group Aurora Fashions is to divide its activities in two branches: party wear chain Coast will be placed in a separate company, the remaining two chains (ladies fashion brands Oasis and Warehouse) will be pooled in a new division of Fresh Channel.
Aim: to be faster and more focused
The separation will allow the management of the new companies to make better decisions faster, because they no longer have to take other branches of the company in to account.
This is a useful strategy, because the two companies have different ideas on expansion: Coast wants international growth and more locations, while Oasis and Warehouse seek to expand through a larger number of franchises and more sales online.
More manageable for possible buyers
Furthermore it is easier to find buyers for separate companies. This could be useful, because an important shareholder of the Aurora group is the no longer existing Icelandic Kaupthing bank.
Aurora was founded in 2009 as a host structure for the brands Coast, Karen Millen, Oasis and Warehouse. Back then they were separated from the ailing fashion group Mosaic Fashions, just before it went bankrupt. Beside the four previously named brands, that group also contained Principles and Shoe Studio.
Karen Millen separated from the others in 2011, after which the brand started an international expansion. According to the British paper The Independent, CEO Mike Shearwood is planning on buying the fashion label. Karen Millen however would love to get back her own brand name, after having to let it go in 2008.