Displaying items by tag: Birmingham

Wednesday, 26 August 2020 13:38

ChicGeek Comment Knowingly Fixing John Lewis

fixing John Lewis Waitrose chic geek expert comment

The department store sector is at a crossroads. It’s do or die time, and a race to right these historical businesses before the whole thing capsizes.

Left - The John Lewis in Birmingham is closing after only 5 years

John Lewis was always seen as a steady ship amongst the losers, like Debenhams and House of Fraser, made unseaworthy with oodles of private equity debt.

But, even John Lewis, the famous cooperative, is suffering in this retail storm. Is it time to batten down the hatches and lose its price matching promise? What can the John Lewis Partnership do to sail through?

John Lewis’ ‘Never Knowingly Undersold’ promise is a left over from a bygone time, much like its ‘Clearance’. Group chair, Sharon White, told the Sunday Times, last Sunday, she expected the price pledge to go. The famous promise to match rivals' prices has become harder to defend as competition from online retailers has become ever tougher and eaten into margins. The slogan is nearly 100 years old having been in place since 1925. "The proposition is important because it signifies being fair to society. We're reviewing it to improve it,” she said.

Pre-COVID, the John Lewis Partnership - John Lewis and its supermarket Waitrose - full year trading update for the 52 weeks ending January 25th showed operating profits dropped by 23 per cent year-on-year to £123 million, while pre-tax profit suffered a 25 per cent year-on-year decline to £146 million. Meanwhile, revenues declined 1.6 per cent year-on-year to £10.15 billion.

While core operating profit at Waitrose grew by £10 million to £213 million, it slumped by £75 million to £40 million reflecting weak sales in home and electricals, investment in technology and higher staff costs.  

fixing John Lewis Waitrose Birmingham chic geek expert comment

The staff bonus - the profits split between its employees -  was two per cent. The lowest amount since 1953 when staff received nothing.

Right - John Lewis' shiny Birmingham store was opened to great fanfare in 2015

Profits were falling at John Lewis’ department stores before COVID 19, and while sales at Waitrose would have increased, it is doubtful it would have made up the difference. So, what’s gone wrong at John Lewis?

Over Expansion - Many people might think John Lewis’ huge retail estate was a legacy leftover from a previous era, but it is worth noting nearly half, 24 of their 50 John Lewis shops, were opened after 2000. They weren’t a traditional legacy retailer and haven’t been afraid to close stores over the years. The Knight & Lee department store in Southsea closed in 2019 after more than 150 years, and was the first to be closed since 2006. John Lewis has announced the closure of a further eight stores including its shiny flagship in Birmingham, above New Street Station, opened only five years ago. This year between 60% and 70% of John Lewis's sales are expected to be online, compared to 40% last year, making a large number of stores harder to justify.

Waitrose has been lightly trimming its 338 store estate announcing the closure of 17 stores since June 2018 and a further three Waitrose stores are to go, at Helensburgh in Scotland, Four Oaks in the West Midlands, and Waterlooville near Portsmouth, later this year.

The company has said they were exploring whether excess shop estate could be used for new mixed-use affordable housing. White said she is talking to developers and investors about partnering to build flats, many of them affordable, on top of existing shops, starting in west London.

John Lewis has announced selling more Waitrose food in their department stores which would make good use of excess space and fill the in-town convenience many other food retailers offer as long as the opening hours are extended.

Lack of Convenience - As people shunned town centres and shopped local, Waitrose & Partners lack of convenience stores has become more prominent. Out of its 338 shops, across the UK, just 65 are "little Waitrose" convenience shops. In comparison, Tesco operates 153 Metro stores and more than 1,700 Express outlets. Sainsbury's Convenience Stores Limited (trading as Sainsbury's Local) is a chain of 770 convenience shops operated by the UK's second largest supermarket chain Sainsbury’s.

Waitrose has a 5.1% share of the food market, making it the eighth-largest retailer of groceries in the UK. These convenience stores can charge more for their restricted selection of products and would make Waitrose, perceived as more expensive by many, more competitive on pricing.

White told John Lewis staff, "We are looking at how we make our products available through other routes, reflecting the fact that Waitrose has a smaller presence in the convenience market than other supermarkets.”

Waitrose needs to extend its opening hours. Many close at 9pm which feels early in today’s competitive supermarket landscape.

Too Much Focus On Fashion - White told the Sunday Times the chain needed "more inspiration, surprise, fun" and that it would compete by "curating" items in store better. John Lewis would focus less on women's fashion and get rid of travel and spa services. Instead it would offer more financial, home and garden products.

John Lewis made a big push into the fickle and highly competitive world of fashion a few years ago, and, while it was the correct place for expansion at the time, it has taken focus away from its core home and electricals. During lockdown people have re-evaluated their homes and want to spend the money they would have spent on holidays and fashion on their surroundings.

It is worth noting that online electrical retailer AO saw annual revenues of £1.05 billion to March 2020, up 15.9% on a year earlier. AO’s customer base grew last year to nearly 6.5 million customers in the UK. This, along with many other online retailers, must have eaten into John Lewis’ traditional hold on the white goods market.

Waitrose/Ocado Loyalty Battle - September sees Waitrose’ 20 years relationship with online delivery service Ocado come to an end. The tie-up generated 6% of Waitrose’s sales. They are being replaced by Marks & Spencer.

Ocado has already said it has no spare capacity for new customers and it will be interesting how many stay loyal to either brand.

Waitrose has two online distribution centres - Coulsdon and Edmonton in London - to service their online orders and has an opportunity to poach customers from Ocado.

Ocado says it will stock 6,000 M&S products, compared with the 4,000 it sells as part of its supply deal with Waitrose. The alternatives would be the “same price or lower, and of the same quality or better” than the Waitrose ones, Ocado said.

Can Waitrose compete with the robotic efficiency of Ocado? Waitrose had enlisted Today Development Partners, a technology business run by Ocado co-founder Jonathan Faiman, to help grow its online operation without Ocado. However, the deal ended after just four months and it subsequently emerged Faiman, who left the online business in 2009, was being sued by Ocado. 

Online orders are always restricted by the number of vans, drivers and delivery slots. A Waitrose tie-up with Amazon Fresh has been rumoured to help with these online growth ambitions. It is predicted sales online with John Lewis to become a 60 per cent and Waitrose to rise to over 20 per cent.

Waitrose has too many disparate websites selling flowers and gardening products, and should push these all into one site and delivery option. It should also link John Lewis and Waitrose more.

Too Expensive? - Walk into a John Lewis or Waitrose and it feels like everybody shopping there has white hair. While the Boomers are an affluent demographic, the brands are perceived as being too expensive and aren’t engaging with younger or those who are more price conscious. It is particularly noticeable at Christmas with small gifts coming in much more expensive than competitors or what consumers are willing to pay. It needs to broaden its pricing with more prices at the lower end. It also needs to offer more exclusive products and give people a reason to pay more. It needs to think of places like TK Maxx as competitors.

Can Rental Replace Sales? - The company said it was considering creating a way for rental of its products and re-sale of used items. While everybody is going rental crazy, can John Lewis renting white goods and sofas make up sales or will it just cannibalise existing sales and be an expensive distraction?

Announced in August 2020, the items will be rented via a third-party site, Fat Llama, with the service available initially just in London but set to roll out nationally if successful. People can choose between 50 different items from the retailer’s range. Prices start at £17 a month for a desk or chair rented for 12 months, and rise for larger goods on shorter contracts.

John Lewis has said "fair value" would still be central to its ethos but "in a more modernised form” and it hopes to have a new slogan to replace “Never Knowingly Undersold” in place by October.

In January 2020, John Lewis stopped publishing its weekly sales figures, it was seen as a bellwether for the whole retail sector.

Department stores are suffering the most at the moment. Many of these issues were pre-COVID 19, but, like all retailers, it would have speeded up the need for change. John Lewis is a special example of a retailer which, luckily, hasn’t been saddled with a debt mountain. They have the opportunity to be the last national department store standing in the UK and could reap the benefits of high-street competitors disappearing, but that doesn’t change the challenges from online.

It sounds like John Lewis is moving in the right direction and making the right noises, but this cautious retailer needs to make some hard decisions. John Lewis is a retailer people would miss, they need to remind people of that. It just needs focussed adjustment rather than radical amputation.

Published in Comment
Tuesday, 16 April 2019 11:08

ChicGeek Comment Big Shops Flop?

big shops primark BirminghamThe simple narrative of big shops are dying, department stores are dinosaurs and physical retail is on its knees just doesn’t ring true. Primark is bucking the trend, and, to really the ram the point home, has just opened not only the world’s biggest Primark in Birmingham, but also officially the largest fashion retail store in the world according to the Guinness World Records. Move over Topshop!

Spread over 5 floors, and 160,100 sq ft in size, the new store boasts womenswear, menswear, kidswear and homeware, plus the largest ever Duck & Dry beauty studio, the first in-store barbers salon from Joe Mills, and 3 dining experiences, including a Disney Café. If it sold washing machines it would be classed as a department store.

Left - Primark's new Birmingham mega-sized store

While nobody seems to know what is going on at Debenhams, and Mike Ashley is hoovering up brands like a hyperactive Dyson - we’re still not sure what he is going to do with all these companies - Primark is an illustration of very large physical stores still opening and doing well.

With no e-tail presence, Primark is where all the other department stores’ physical customers have gone, not to mention Marks & Spencer’s and Next’s. Primark’s Adjusted Operating Profit was £843m in 2018, with revenue of £7.477b, up from £7.053b the year before.

According to local press, Birmingham Mail, “The new Primark megastore Birmingham has been jam packed for four days in a row. Crowds of people flooded into the 160,000 square foot shopopolis when Primark opened its doors 15 minutes early at 9.45am on Thursday, April 11. Ever since our live Primark updates began, the five-floor giant has been packed from the basement to the roof with shoppers - and diners - keen to see what all the fuss is about.”

Primark needs large stores to make its business model of pile-it-high-and-sell-it-cheap work. Only this week, another Primark opens in Milton Keynes. centre:mk see its new 75,000 sq ft store open in the heart of the shopping centre and is the largest new store to open in centre:mk in the last 25 years. Over 3 floors, Primark was the most requested brand by the centre’s 25 million visitors in exit surveys over a number of years.

Kevin Duffy, Centre Director at centre:mk, said “We are thrilled to announce that Primark will be open on the 16th April and joining our fantastic selection of fashion and beauty brands at centre:mk. This is a key moment for us – the new flagship store will be the single biggest store since we introduced Marks & Spencer to centre:mk nearly 25 years ago. Primark is a firm fashion favourite, and so we look forward to attracting more visitors by expanding the centre’s fashion retail mix.”

Primark are expanding into Slovenia, this year, and continuing to grow in America. Primark currently has 9 US stores clustered in the north eastern corner, but plan to open a store in Florida in late 2019. While its expansion has been slow and steady, it was ranked in the top spot on a list of the 100 fastest-growing retailers in America by the National Retail Federation's Stores magazine, which used sales data from Kantar Consulting. In the US, specifically, Primark sales were up 103% year-on-year.

big shops primark Birmingham

Urban Outfitters is another brand looking to expand with larger stores. Planning to open 15-20 new stores annually for the next five years, the US-based retailer has 50 stores in Europe, including 28 in the UK and Ireland. Emma Wisden, European Managing Director, said the retailer has identified several key markets of interest within Europe that it is underexposed in, which it will be pursuing imminently. Speaking to Drapers, she said, “Urban Outfitters is in the fortunate position of being one of the ‘disruptor’ brands in fashion at the moment. We are opening stores, not closing them, unlike so many of our neighbours on the high street. Ecommerce is, of course, increasingly important, so it is crucial to constantly evolve omnichannel shopping. However, bricks-and-mortar retailing isn’t going anywhere soon.”

Right - Primark's Duck & Dry Beauty Studio in Birmingham

Urban Outfitters has increased its European store portfolio by more than 30% over the past 12 months with new stores in Vienna, Milan, Paris, Eilat and Düsseldorf.

These two retailers illustrate the polarisation of physical retail. Bad, boring retail is dead, and while people are attracted to Primark for the prices, by adding hairdressers and restaurants, they are giving people more reasons to visit and stay longer. Primark’s phenomenal success is allowing them to think beyond cheap clothes and their tie-ups with Harry Potter and Disney at pocket money prices is a guaranteed success. 

Urban Outfitters is clearly riding the retro, sportswear trend, but being a shop of discovery and fresh ideas and brands allows a chance for constant change if the buy is right.

Many retailers with large stores are finding it hard to balance business rates, rents and falling footfall, but Primark and Urban Outfitters are proving, clearly, that people still want to leave the house. 

Published in Fashion

the chic geek ottd menswear birminghamTheChicGeek headed north to experience the renaissance of our great industrial centres. The first stop was the heart of the UK, Birmingham.

Arriving at the new and shiny - quite literally - Birmingham New Street station, TheChicGeek headed to the comfort of the new AC Hotel at the Mailbox development adjacent to the canal.

With more canals than Venice, Birmingham’s Mailbox is a mix of industrial heritage and modern architecture with a recently refurbished Harvey Nichols, shops and restaurants. 

TheChicGeek went sporty in his OOTD with a fitted biker jacket in soft suede and new, relaxed dark denim jeans with an athleisure drawstring. Finished off with bright white plimsolls, Birmingham was the perfect eclectic backdrop for TheChicGeek.

Credits - Brown Suede Biker Jacket - ASOS - Flamingo Shirt - River Island, Drawstring Jeans - Replay, Trainers - Muji, Spectacles - Salvatore Ferragamo, Watch - Mondaine

With thanks to AC Hotels Birmingham Mailbox #ACHotels

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Published in Outfit of the Day
Tuesday, 12 April 2016 11:36

Label To Know - Clements & Church

clements church tailoring the chic geekLife outside of London?! Yes! Tailors, Clements & Church, are proof that by doing what you do well and slowly growing your retail network in wealthy pockets around the UK, you can build a healthy menswear business with a point of difference.

Left - All images Clements & Church SS16

Starting life a decade ago when Clements & Church’s Managing Director, Mark Nash, bought a tailor’s in the heart of Birmingham, they now have a further four shops in Oxford, Solihull, Leamington Spa, Beaconsfield and, now, online.

They’re not cheap, but then quality tailoring never is. 

yellow mac clements churchThe Clements & Church’s localised tailors have a feel for their customers and, literally, tailor their offering to suit the area they are in. But, that doesn’t mean they don’t experiment. Using quality Italian and British fabrics, they design new styles of tailoring and accessories every season in bold fabrics and colours while still grounded with good taste. Many items are made in Britain and are an update of traditional designs and processes.

Mark Nash, says, “We have always wanted to combine the very best quality, with individuality and something different. If a customer was after something a bit different, when we first started, other than a navy or grey suit, they wouldn’t have been able to find it. We have filled that gap. 

“Clements and Church is unique. We are an extension of our customers’ lifestyle and have fantastic relationships and a very high level of retention. We offer a product that has a sophisticated and distinctive look and we pride ourselves on our knowledge and service,” he adds. 

Highly trained tailors are available to service customers for Bespoke and Custom Made suiting in each of their shops.

TheChicGeek says, "This is some of the best tailoring I've seen lately from a label unknown to me, until recently. It's great to see this kind of quality coming from outside of London. It is expensive, but, you are getting value for money when looking at the fabrics and manufacturing used. You're also pretty safe in the knowledge that nobody else will be wearing it, plus you'll standout for the right reasons. Slow and steady always wins the race!"

www.clementsandchurch.co.uk

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Published in Labels To Know
Monday, 23 November 2015 18:49

ChicGeek Comment - Bye, Bye, Brands

harvey nichols new menswear department chic geekKnightsbridge based department store, Harvey Nichols, has been busy excavating their basement. Long the home of their menswear offering, this cavernous yet claustrophobic space is, we are told, being completely made over ready for its unveiling in spring 2016. 

Left - Harvey Nichols' new store in Birmingham which gives us the direction stylistically of the Knightsbridge store's new men's basement.

So, what’s new? I recently attended a presentation of theirs describing how the new spaces are going to look. Bye, bye shop-in-shops and branded concessions: long the bastion of mega-brands, physically claiming prime spots in-store to be replaced by easily changeable spaces and the mixing of brands.

I'd like to think of it as a more democratic form of shopping: allowing labels to speak to people solely on product alone without the pre-judgement of walking over to a branded section or the muscling out of smaller brands by placing them in the parts of the store these mega-brands don’t want.

The big brands won’t like this. They will sell less. There will now be an equal playing field between them and whichever new brands Harvey Nichols decide to stock. It also allows Harvey Nichols to drop brands faster, regardless of size, to keep pace with the speed of fashion and allowing new brands to bring excitement and interest into their physical store.

People are tired of seeing the same brands everywhere regardless of how expensive they are. It also allows a form of curation rather than simply a mini-mall of the same designer names which you can find the world over.

harvey nichols menswear april 2016 the chic geekHarvey Nichols know they can’t compete with the likes of Harrods and Selfridges on menswear floor space, so, they are making theirs more flexible and less static. This is a very clever idea.

Right - More interiors from Harvey Nichols Birmingham. Let's hope London looks this good

In order to survive shops need to become destinations. They need to offer something you can’t find anywhere else: something new, fresh and inspiring. They also have to flow, both visibly and physically, and, ultimately, part time-poor people with their cash.

One of the more interesting ideas they have is putting all the same things together. So, white T-shirts, tuxedos etc., all at different price points, selected by Harvey Nichols, are together with the sales assistants explaining the differences between them all.

Fashion’s big names have long earnt their corners of the big stores, but they sell more and remain powerful because they have the best positions and are, therefore, stuck in a positive cycle which is very hard to break, making retail spaces look the same every time and everywhere. It all becomes quite predictable and menswear buyers and the retailers want something different and exciting while still retaining the spend.

Harvey Nichols is seeing this refresh as an opportunity to try something new. No doubt they’ll be some difficult discussions with brands, but I hope they hold their ground and give these ideas a chance to prove that the customer, now, buys into good product rather than brands. Menswear just got a level playing field!

Opening April 2016

Published in The Fashion Archives

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