Down on the farm, Brexit casts its shadow

Organic farm co-manager Ellie Woodcock picks blackberries on a farm in East Sussex, which is run to strict biodynamic principles. (AFP)
Updated 13 October 2019

Down on the farm, Brexit casts its shadow

  • Even with no customs duties to pay, the UK-EU divorce can deliver an unexpected bite

EAST GRINSTEAD, UK: On the face of it, Ellie Woodcock’s organic farm two hours south of London shouldn’t be affected by Britain’s impending departure from the EU.

“We don’t export anything, so that wouldn’t affect my farm. We sell very much directly to the English public and quite locally,” she told AFP.

But even with no customs duties to pay or headaches at the border, Brexit can deliver an unexpected bite.

“I think for the farming community, Brexit will have quite a negative impact,” said Woodcock, who co-manages Brambletye Farm, near East Grinstead, in Sussex.

“The farming community around here really rely on foreign workers, so changes to the legislation and people movement could really affect them.”

“There’s not one positive thing that I can spring out of it, even if I was to twist my mind,” added co-owner Stein Leenders, as he harvested the final fruits of the season.

Brambletye grows apples, pears, raspberries and blackberries, and sells eggs laid by dozens of free-range chickens over its nearly 45 acres of land.

Woodcock, Leenders and their 20-odd employees make or grow virtually everything on site, including fruit purees and bottled juice from a shed housing three busy workers.

“Some of the supplies I might buy from other European countries directly or indirectly through a third party,” said Woodcock.

“One of them would be corks. I also buy mushroom substrate, which comes directly from Holland.”

Such products risk becoming more expensive because of Brexit, which has both made the pound weaker since the 2016 referendum and upped expectations of disruption at the border.

Where Brambletye has opted to focus on a few products, other smallholders bring in fruit from Spain, Portugal and other sunnier European countries to sell during the long rainy winter months.

Fans of organic produce wander among the stalls at The Spread farmers’ market in the trendy Primrose Hill area of London. But the high spirits of the weekend hide a downbeat mood.

“Everything we plant is imported,” said Dave Newton, from Brockmans Farm, at his stall opposite Brambletye’s. “Brexit is going to affect us a lot because prices are going to go up. “Small farms are going to suffer the most.”

Large farms which export most of their produce, and particularly livestock rearers, are facing the threat of financial ruin.

They could see the possible loss of European subsidies and huge customs duties while importers could be given tax free incentives.

“We don’t know what’s going to happen yet in terms of subsidies,” said Mike Norledge, who helps run The Spread.

“A lot of workers have to go back to where they’re from, so that’s a worry,” he added.

Woodcock meanwhile said economic conditions since the landmark Brexit vote have not helped.

“It’s not a particularly glamorous job to pick fruit for eight to 10 hours a day,” she said.

“There was an incentive for workers from poorer countries when the pound was high as they made a lot of money quite quickly.

“With this sometimes xenophobic atmosphere, the big thing with Brexit is do (workers) feel welcome? If they don’t feel welcome and if there’s not a big incentive for the money, then they’re not going to come.”

Woodcock herself only employs locally because she has no facilities to house seasonal workers but has faced great difficulties finding anyone.

“That makes me really worried for other farms. How are they going to manage?” she said.


Struggling Victoria’s Secret sold as women demand comfort

Updated 22 February 2020

Struggling Victoria’s Secret sold as women demand comfort

  • Chairman calls time following difficult year of Epstein links and controversy over chief marketing officer comments

NEW YORK: Victoria’s Secret has a new owner. Now, the big question is whether the once sought after but now struggling brand can be reinvented for a new generation of women demanding more comfortable styles.

The company’s owner, L Brands, said that the private-equity firm Sycamore Partners would buy 55 percent of Victoria’s Secret for about $525 million. The company, based in Columbus, Ohio, will keep the remaining 45 percent stake. After the sale, L Brands will be left with its Bath & Body Works chain and Victoria’s Secret will become a private company.

Les Wexner, 82, who founded the parent company in 1963, will step down as chairman and CEO after the transaction is completed, and become chairman emeritus. Wexner has faced seperate troubles, including questions over his ties to late financier Jeffrey Epstein, who was indicted on sex-trafficking charges.

The selling price for Victoria’s Secret signifies a marked decline for a brand with hundreds of stores that booked about $7 billion in revenue last year.

In a statement, Wexner said the deal would provide the best path to restoring Victoria’s Secret’s businesses to their “historical levels of profitability and growth.” The deal will also allow the company to reduce debt and Sycamore will bring a “fresh perspective and greater focus to the business,” he said.

To successfully turn around Victoria’s Secret, Sycamore will need to change up the corporate culture, reinvent fashions and redesign the stores to make them more contemporary, experts say. Sycamore manages a $10 billion portfolio including retailers as Belk, Hot Topic and Talbots.

The management team at Victoria’s Secret essentially was designing what men wanted, and not catering to women’s tastes, said Neil Saunders, managing director of GlobalData Retail.

“The brand is very embedded in the past,” said Saunders. “It was always about men feeling good. It should be about making women feel good about themselves.”

Victoria’s Secret has an unparalleled history of success. The brand was founded by the late Roy Larson Raymond in the 1970s after he felt embarrassed about purchasing lingerie for his wife. Wexner, the founder of the then Limited Stores Inc., purchased Victoria’s Secret in 1982 and turned it into a powerful retail force. By the mid-1990s, Victoria’s Secret lit up runways and later filled the internet with its supermodels and an annual television special that mixed fashion, beauty and music.

That glamor has faded and so have sales in the last few years. The show was canceled last year, and shares of Victoria Secret’s parent have gone from triple digits less than five years ago to a quarter of that today.

Victoria’s Secret struggled to keep up with competition and failed to respond to changing tastes among women who want more comfortable styles. Rivals like Adore Me and ThirdLove, which have sprouted up online and marketed themselves heavily on social media platforms like Instagram, have focused on fit and comfort while offering more options for different body types. Meanwhile, American Eagle’s Aerie lingerie chain, which partners with women activists like Manuela Baron, has also lured customers away from Victoria’s Secret.

And in the era of the “Me Too” movement, women are looking for brands that focus on positive reinforcement of their bodies.

“Victoria’s Secret will need to empower women, not make them spectacles,” said Jon Reily, senior vice president and global head of commerce strategy at digital consultancy Isobar.

Stacey Widlitz, president of SW Retail Advisers, a retail consultancy, said that Victoria’s Secret designs in the last few years had gone in the opposite direction to what women wanted, ever sexier and poorer in quality.

And while last year Victoria’s Secret started featuring more diverse models, including its first openly transgender model, the moves fell short.

Victoria’s Secret suffered a 12 percent drop in same-store sales during the most recent holiday season. L Brands said on Thursday that same-store sales declined 10 percent at Victoria’s Secret during the fourth quarter. Bath & Body Works, which has been a bright spot, enjoyed a 10 percent increase. The skincare chain represents more than 80 percent of L Brands’ operating profit.

“The (Victoria’s Secret) brand has lost its way, while the lingerie market is not large or high growth, and has become commoditized,” Randal Konik, an analyst at Jefferies, wrote Thursday. “Furthermore, with athleisure taking over, the need for regular bras continues to wane.”

The company has also been beset by allegations of a toxic work environment and its founder recently apologized for his ties to Epstein, who was found hanged in his cell after federal indictment for sex trafficking of minors. L Brands’ Chief Marketing Officer Ed Razek resigned last August after making controversial comments about why transgender models shouldn’t partake in its annual fashion event.

Epstein started managing Wexner’s money in the late 1980s and helped straighten out the finances for a real estate development backed by Wexner in a wealthy suburb of Columbus. Wexner has said he completely severed ties with Epstein nearly 12 years ago and accused him of misappropriating “vast sums” of his fortune.

Wexner offered an apology at the opening address of L Brands’ annual investor day last fall, saying he was “embarrassed” by his former ties with Epstein.

Wexner is the longest-serving CEO of an S&P 500 company. He founded what would eventually become L Brands in 1963 with The Limited retail chain, according to the company’s website. Wexner owns approximately 16.71 percent of L Brands, according to FactSet.

Mike Robbins, a San Francisco-based corporate culture expert who has advised chains including Gap and Sephora, said the team at Victoria’s Secret would have to retrain workers and hire more people with diverse voices.

“They have a lot of work to do — within the company and also outside with the customers,” Robbins said. “The companies that are able to have (a) great culture attract the best employees.”