Times up for Asda’s 4 year George Trial

How long should it take for a major retailer to decide whether a new format has what is takes to be a winner. In the case of Asda, it has taken over four years to determine the fate of standalone fashion brand “George”.

News today that Asda is to close its chain of 11 George fashion stores.

400 employees will find themselves being offered new roles at other Asda outlets, including Asda Living, a non-food format that Asda hopes will help it take on the might of Tesco.

The fashion retail market is a great source of relevant news stories for business students, and the decision about George is a good example.

The article in the Telegraph explains how the George concept has really been a four year new product trial.

Why has the concept failed to deliver? I like this line from the article;

“[George] failed to deliver sufficient returns due to the high sales volumes required to cover the high rents for prime town-centre locations.”

What a great example to use to explain how breakeven analysis can be used to inform key business decisions.