When cultures clash - West 49's problem with Off The Wall
On April 14th, sports clothing retailer West 49 announced “it anticipates a $3.5 million, non-cash write-down of goodwill associated with its Off The Wall banner in the fourth quarter for the fiscal year ended January 26, 2008.” 
This is shocking news for those aware of Off The Wall at the time of the original acquisition in May of 2005, and the strength and value of this once cool young women’s fashion chain. Its also a lesson for those chains seeking growth by acquisition.
Fuelled by investor funding, what West 49 saw then was an age-target complement in women’s clothing to its more male-focused core banner, impeccable financials, solid competitive positioning against leading nationals in its BC markets, great private labels, and expertise in offshore sourcing.
"We are pleased to have Off the Wall and its president, Christian Toth, as part of the West 49 team," said Sam Baio, Chief Executive Officer, in a statement at that time. "This represents another tremendous growth opportunity, as Off the Wall serves market segments very similar to those of West 49." Well… not so much. Demographics aren’t everything. Its customers were not skaters. They liked fashion, and were the girl-next-door version of the Aritzia shopper.
Furthermore, in eschewing the “people fit” and proper research and consumer insight in favour of past operating metrics and financials, West 49 missed the obvious. The brilliance of Off The Wall was its culture, its core team, and its strong focus on fashion branding. Sure, it happened to have a number of teen and tween customers, but it was much more than that.
Too bad the new owners did not recognize the issues ahead of their decision. Or too bad they did not choose to nurture its new company and learn about branding from it. By the end of the 2006, the team at Off The Wall was gone. And so was its mojo.
