Retail Day
Retail Week, today
Archive for July, 2009
Funny old day
This is a funny sort of Friday. Very sad to hear of the death of Bobby Robson, who always struck me as a true gentleman, and anyone of my generation who’s into football has him to thank for some terrific memories during our childhood.
On a similarly sporting front, am chuffed that David “Bumble” Lloyd is following me on Twitter. Not sure its anything to do with him being a Retail Week fan, more because I’m following him. Anyway, his Tweets are hysterical, well worth following. And what about Graeme Onions taking two wickets with the first two balls of the day? Not sure anyone would have expected that. This England team really has the ability to surprise.
We’re sadly saying goodbye to two excellent members of the Retail Week team today. Not many readers will be familiar with our art director Michael Sullivan, but he’s the man who’s transformed the look of Retail Week over the past few years. He’s going off to set up a design consultancy with his counterpart on our sister title Screen International, and if you have any requirements he comes very well recommended - his email is michael@forty6design.com
Our well-liked property correspondent Ben Cooper is also heading off for pastures new - Ben is a real expert in that world and is going off into the world of freelancing, looking for both journalism and PR commissions. His email address is ben_cooper1@hotmail.co.uk
Another unusual thing about today - a Tim Danaher front page lead on Retail Week, on River Island’s results. River is a retailer I have a lot of time for. It knows its market, and is focussed relentlessly on the basics of good retailinf - first product, then store environment and service. Its results are no fluke, and show that even in tough times, good retailers will be fine.
Weather or not?
June was a scorcher, but July has been a washout and the forecast for early August doesn’t look much better. Bad news for those of us planning to watch the Ashes, and for retailers which bought heavily into Summer product on promises of a really hot Summer.
The Met Office has today backed down on its forecast of what it’s PR team termed a “barbeque Summer“, but many retailers buy long-range forecasts from specialist companies and use them as a crucial part of their buying decisions. Opinions vary on the value of these forecasts - we publish a week-ahead one every week from Planalytics which is very accurate, but the real value to retailers is in the longer term view. I guess the key lesson is to use forecasts as part of your planning, but not to rely on them too much.
The man in the news today is HMV chief executive Simon Fox, who is in all the papers being linked with the chief exec job being vacated by Michael Grade at ITV. The link shows the stature in which Fox is held both within and beyond the retail world, rightly so because he has done a great job with the entertainment retailer.
It becomes increasingly apparent to me that the very best chief executives in retail are people who can effect genuine business transformation, and not many have the very special vision required to do that. Those that possess it, like Fox, are going to be in real demand.
That said, while he should be flattered by ITV’s interest, he’d be mad to take the job. I’m no expert in media but the structural problems facing ITV make HMV’s pale into insignificance, and while he has a great grasp of media, Simon is a retailer at heart. If he takes the ITV job, he’ll be a very brave man indeed.
Bow-ing out
Maybe it’s me but it seems like the nice, friendly and entertaining chief executives are the ones who leave their jobs and the dreary ones or the ones who don’t want to talk to us stay around. The bow-tie wearing David Carter-Johnson of Adams Childrenswear definitely falls into the former category so I was sorry to hear from his equally nice chairman John Shannon (who regular readers will know isn’t Irish) that David is leaving at the end of the week.
Adams has certainly been through the mill over the past couple of years, with two spells in the hands of the administrator, and I’m not sure even now it is anywhere near out of the woods. David and John have worked hard to come up with a really good new format for the stores and saved what many thought was probably an impossible cause.
The problem is that kidswear is such a competitive market with the supermarkets piling on the pressure, and it’s really hard for retailers coming back from administration to keep up when they’re managing nervous suppliers, landlords and credit insurers. But I’m sure there is a role for a store selling fashion-led childrenswear on the high street and apparently a new CEO appointment is imminent, so hopefully there’s no more to David’s departure than his desire to concentrate on his non-exec portfolio.
David also does an excellent job as head trustee of the Textile Industry Childrens Trust, a very worthwhile cause I know he is hugely committed to, and I’m sure he’ll be remaining involved with that.
I met this morning with two very nice chaps from Paypal, the excellent online payment service owned by Ebay, and they have a very interesting story to tell. I was delighted to hear they are regular readers of this blog, so I was more than happy to give them a plug -so Rob and Simeon, hello!
Wakey and Wills
With an hour to kill before a train yesterday, I found myself exploring the shops of Wakefield. Wakey, as the locals call it, is well-known in the retail world as having had the misfortune of having a new shopping centre, Trinity Wakefield, stopped midway through development when the money ran out, and this has blighted part of the city centre.
That said, Wakefield looks to me like a classic example of a town which doesn’t need more space but where a developer just got carried away. It has no shortage of empty shops and while the existing Ridings centre is smart and modern, many of the brands in there are rather secondary in nature. M&S was by far the best looking store in there, many others looked very tired.
The reality for many second tier towns like Wakefield is unfortunately that they probably don’t need the new shopping centres they are promised. After all, it is only 15 minutes or so from Leeds, and Meadowhall isn’t far either. It might be a long time before the promised Trinity Wakefield scheme is complete.
When it finally is built, one retailer which certainly won’t be taking space there is Jack Wills, the unashamedly upmarket business which is often described as a British Abercrombie & Fitch. Its founder Peter Williams keeps his head down and I’ve only ever exchanged the odd brief email with him, but he broke his silence in the Sunday Times this weekend with an interview I really wish we’d written.
The interview is well worth reading because Jack Wills is a great story of retail triumph following initial adversity. It’s also a really good example of how by developing a really distinctive brand identity and sticking firmly with it, retailers can build real customer loyalty. Best of all - as both Jack Wills and Abercrombie have shown with their admittedly affluent teenage customer bases - if the product and the brand are good enough, price ceases to be a significant factor.
Its low profile means Jack Wills doesn’t always get the credit it deserves. That might be about to change.
Crowning glory
I will refrain from talking about carpets on the blog today, except to highlight our front page lead in the magazine about Steve Johnson and Gary Favell being appointed to senior roles at Allied Carpets. That’s right, former Woolies boss Steve Johnson, and Gary Favell, the man who put MFI into administration twice. Not entirely sure I’d give those two my deposit….
I was interested today in the appointment of former John Lewis Partnership chairman Sir Stuart Hampson as chairman of the Crown Estate. Never was there a more suitable person for a job. I like Stuart, who is probably the poshest person I’ve ever spent time with but also very down to earth, if that isn’t a contradiction in terms, likeable and funny.
I can say with confidence he is the poshest man I know because of the way he says “because”. Most people, to a greater or lesser extent, say “becoz”. Stuart is the only person I know he says “becorrrrrse.”
He is an excellent match with the Crown, which is the Queen’s property company and owns the whole of Regent Street. HM will no doubt be familiar with Sir Stuart, not just because he’s a Sir but also because he is a close confidant of her eldest son.
Stuart will inherit an organisation which has much to be proud of. The Crown Estate’s remodelling of Regent Street introduced a raft of new names, most notably Apple, into the UK market and really redefined the role a progressive landlord can play in creating dynamic retail environments. On the debit side though, its refusal to allow TK Maxx into an empty unit on Piccadilly Circus smacked of snobbery and ignored not only the fundamental differences in nature of the different areas of its portfolio, but also the retail climate.
Stuart will inject that realism into its approach and I’m sure on his watch it will continue to be a pacesetter.
Today sees the JJB AGM up in Wigan, and Mike Ashley has promised fireworks. My colleague Lisa Berwin has gone up there and will be tweeting from there - keep in touch here, it should be fun.
More floors
Apologies for this blog turning from Retail Day into Carpet Day, but with good timing I was due to make a long-scheduled visit to the headquarters of Carpetright down in the Thames Estuary, where London meets Essex.
There aren’t too many sights in the area, it’s fair to say. The taxi driver who took me from the station to the office was very disparaging about the birdwatchers - particularly “that Bill Oddie” - who have made Rainham Marshes famous, while I was sorry to learn that famed darts venue the Circus Tavern, just round the corner from Carpetright, is now a “gentlemen’s club”.
However the trip was very worthwhile. Lord Harris and his son Martin, who is group commercial director, are very proud of their new distribution centre which is attached to the HQ, and with good reason. It is half a million square feet in size yet needs only 40 people to operate it, and the levels of efficiency and automation are truly something to behold.
Big automated DCs turn me into an excitable schoolboy all over again, and the sight of all the carpets whizzing around was as impressive as anything I’ve seen in the non-food sector,(although not quite up there Ocado’s space age warehouse in Hatfield, which is truly amazing).
But crucially what it means to Carpetright is enables it to leverage the benefits of its scale to reduce costs to a minimum, fulfil orders quickly, and ensure remnants - the sale of which is where carpet retailers make their real profit, I learnt - are sold through. Even before the collapse of Allied no retailer could match Carpetright’s share, and if it can win even half of Allied’s business, it will consolidate its already dominant position.
Lunch with Lord Harris is always enjoyable, particularly because we share similar politics and he is from the same part of the world as me, where he is a big investor in improving the local schools. Not many businessmen are genuine philanthropists, but he will be one of the few of the current leaders to leave a genuine legacy not just in retail but in the wider world too.
Without Borders
With all the focus having been on Allied Carpets over the past week events at Borders - where management has bought back the business from Luke Johnson, backed by Hilco offshoot Valco - have been neglected.
While the move gives some more certainty about the struggling company’s future in the immediate-term, past form suggests that businesses where Hilco becomes involved more often than not don’t have a long term future. Valco is Hilco’s private equity arm, which suggests the aim here might be more about running the business for the medium term than a quick sale or closure, but I’m not over-confident.
I’m not surprised Borders has struggled though. Books is a tough market for everyone and Borders hasn’t helped itself with its odd choice of locations. I know books work on retail parks in the US but in this country it hasn’t really hapenned, particularly when the parks you choose are ones like Gallions Reach in East London - a less promising location for a bookstore is hard to imagine. It was also very slow into the online game, and has - as seems common for booksellers - struggled with its supply chain, siting a big warehouse in the unlikely location of Cornwall, nowhere near anything, only to close it again.
I’ve always resented Borders for its neglect of Books etc, which was a really good London focussed book chain, and still - despite Borders best efforts to offload the stores down the years - still offers an intelligent yet mass-market proposition for the metropolitan book buyer, although the terrific branch near the old Retail Week office in Clerkenwell is now very sadly gone.
I will also be sorry to see the Borders Oxford Street flagship go. New Look is taking the store on. It always seemed busy to me, but unfortunately more with people using at as a library than buying - I myself have been guilty on many occasions of using it as somewhere to keep warm between meetings in the West End.
But with its departure and that of the Waterstones at the Tottenham Court Road end, Oxford Street, like so many high streets up and down the country, is becoming a book free zone - a sad state of affairs for the vitality of our shopping streets.
Pounding the streets
Some people think my job is quite glamorous, but while we do admittedly get to do quite a lot of fun stuff, a lot of the job is quite mundane. On my way in this morning I took my camera to the carpet shops of Brixton as we needed an Allied Carpets picture. The Allied store on Brixton Hill, in a tertiary high street unit, is one of the 51 saved, which makes me wonder what the ones they’ve jettisoned must be like. The Carpetright round the corner looked like Harrods by comparison.
By this stage I was getting rapidly drenched, and my emergency need for an umbrella prompted me to pop into Poundland opposite the tube station to get one. What a great shop Poundland is. While I was in there I found several books I wanted to buy, and could easily see myself stocking up with loads of stuff for the house there. The store was untidy, with cases everywhere (although in fairness it was only 9am), but the staff were friendly and the range and quality of the product was remarkable.
Sure, there is still a residual stigma attached to any store which includes the word Pound in its name, but after the brilliant M&S, Poundland is now officially the second best store in Brixton, and my visit made me reassess my view of Woolies. The much smaller Poundland store sold everything I probably would have bought in the giant former Woolies across the road, and I would have the certainty of it costing a pound. It’s basically a modern take on what Woolies stood for, and does it a whole lot better.
Floored
Just back from a relaxed week in Sri Lanka. Not much to report on the retail scene out there, which aside from the ubiquitous Cargills Food City stores - which have over 50% of the country’s organised food retail sales and really stand out on the country’s bazaar-like high streets with their smart modern appearance - seems to be mostly mom and pop stores and street markets. Not that that’s a bad thing though, with the markets in particular being a riot of colour and exuberance.
No great surprise to come back and find that Allied Carpets has hit the buffers, although some of the stores will survive in a pre-pack deal. It’s funny to think it wasn’t that long ago that Allied was the dominant player in the floorings market because these days Carpetright wipes the floor with it, if you pardon the expression. Wherever the two have stores close together - near me they’re located close to each other in Brixton - Lord Harris’s stores are streets ahead.
The Allied story has generated more comments on the Retail Week website than any other I can remember, with particular anger being directed at CEO Clive Hutchings, who many of the staff appear to blame for the collapse. Clive is a larger than life character with his suntan and bold pinstripes, and he’s taking a lot of the flak for what’s happenned. The Muillez family who owned the group before its collapse have to take some of the rap though because it was on their watch that it lost its way.
Ether way though, with only 51 stores emerging from the wreckage, it’s going to be very hard - actually make that impossible - for Allied to mount any sort of challenge to Carpetright in its new form.
Rising stars
Apologies for the lack of posts over the past few days - it’s been a hectic time here at Retail Week as we’re going through a few changes internally. I’m now off on holiday for a week but when I get back I promise faithfully to get back to posting every day.
The highlight of the end of last week was the judging day for Retail Week’s Rising Star Awards. We get all the candidates into our offices for a light grilling from our panel of judges, leading lights in the industry such as M&S HR director Tanith Dodge, House of Fraser’s brand director Matt Chambers and former HMV boss and now Fatface chairman Alan Giles.
I put my foot in it first thing by promising our judges lunch when there wasn’t any - “Welcome to the world of private equity” Alan laughed - but other than that the day went smoothly. While not all cope well with the pressure, even though we tell the judges to be nice to them, some always perform outstandingly and it’s truly refreshing to see people so energised with enthusiasm for the business of retailing. The awards themselves, on September 10, are always a hoot as all the shortlisted candidates let their hair down with quite some style.
Trying to encourage that enthusiasm for retailing is what prompted Philip Green to set up the Fashion Retail Academy, which held its annual prizegiving day on Tuesday. I wasn’t able to make but George went along and said it was a great morning, and the Academy seems to be going from strength to strength. I bumped into Philip outside the Dorchester on Wednesday night after a meeting of Retail Week’s 100 Club there - the thoroughly nice former M&S chief exec Roger Holmes was speaking - and it seems that whenever you meet him his enthusiasm for talking about retail and the businesses and characters that make it what it is remains utterly infectious. We need more retail leaders who are as outwardly passionate about the industry as he is.
