The managing director of footwear supplier Jacobson Group has risen from market trader to the Rich List, but his traditional business values and a penchant for doing a deal have stuck with him, not to mention his love of a prank.
Above anything else I’m a trader,” says Harvey Jacobson, managing director of footwear supplier Jacobson Group, in his slow, northern growl.
“But people have called me a little tinker. I do things just for devilment, just to see the look on people’s faces,” he adds with a glint in his eyes from behind his trademark black-rimmed spectacles.
Over a cheese sandwich at the Jacobson Group head office in the heart of the rolling Rossendale Valley in Lancashire, Jacobson is talking Drapers through the group’s history and his own rise up the footwear ranks.
From a market trader to The Sunday Times Rich List (1,446th, worth £50 million), Jacobson owns and runs D Jacobson & Sons, a British footwear supplier that sells every type of shoe – from £1.99 slippers to Netto and £300 boots to Selfridges. He is a low-key 52-year-old hailing from Salford in Greater Manchester and the grandson of a Russian immigrant who arrived in Manchester in 1910, with nothing but a cobbler’s hammer in his pocket.
Born into footwear, the 12-year-old Jacobson started working in the family shoe shop, which had been opened by his father when he left the army at the end of the Second World War. At 15, Jacobson left school to work in the store full-time.
“I think I liked trading better than school,” he explains. “As a 15-year-old fella I went into my father’s shop and he had loads of old stock. I went in and put a Sale on. We usually took about 30 quid a day and I took almost £100 on that Friday in 1971.”
Jacobson is a true old-school merchant. His business style may lack modern corporate finesse, but his straight-down-the-line, unconventional approach gets results.
In 1981 Jacobson struck out with his brother Melvyn, and the pair opened up their own footwear cash and carry market stall in Rossendale. A friend of Melvyn’s was an importer from the Far East. “He said to us, ‘you’ve just got to get out there for product,’” recalls Jacobson.
So the brothers got on a flight to China to find some bargain footwear. Jacobson recalls writing the Chinese words for ‘cheaper’ in thick black pen on a piece of paper and folding it up in his wallet, which he whipped out when negotiating with those in China who didn’t understand his gesticulating. It was a steep learning curve for the duo.
“We paid far too much for the stuff, but we didn’t half learn quick,” he admits.
The brothers bought cartons of slippers and trainers. The first batch fell apart, but as Jacobson grew more savvy he secured better deals and became one of the first UK footwear suppliers to source product from so far afield.
The experience led him to put all his energy into the supply business, which he believed was more lucrative than retailing. “I wasn’t a good retailer from a merchandising point of view, but we knew the product and the stuff that the retailer wanted,” he explains.
“We were quick to work out price points and in 1985 we took on our first sales reps.” At this point, the Jacobson Group was dealing mostly in own label, basic Far Eastern imports at the value end of the market.
By the 1990s sales had smashed through the £15m barrier and the firm, and Jacobson himself, were growing in confidence.
In 1996, after a drawn-out negotiating process, which Jacobson recalls with glee and with that trademark twinkle in his eye, he bought iconic sportswear brand Gola.
In one transaction he had bought into more than 100 years of heritage and the brand that would eventually become an anchor of the Jacobson Group’s business. Heritage, he says, was not even a word in his vocabulary at the time.
“I didn’t realise what we had bought and didn’t understand the branded market. I thought I’d bought a sitter,” he says. “Then I realised I’d bought gold, and now I realise I actually bought platinum.”
Following the Gola deal Jacobson went on to secure further household names including a licence for Lonsdale in 2003 and the acquisition of classic footwear brand Lotus. Contemporary men’s footwear brand Frank Wright was snapped up in 2004 and the acquisition of the iconic Ravel name followed last year. The group’s total sales are now 70% branded.
Jacobson bought the Ravel name from Clarks, after the footwear giant shut the retail business down last year after 40 years, blaming difficult trading, and used it to launch a young women’s fashion brand at wholesale. He believes the brand has mileage – which would appear to be true given it has secured 70 stockists in its first season.
Jacobson’s foresight and subsequent switch to a branded operation in the mid-1990s has paid off. The company secured a £7.8m profit on £64.2m sales in 2006. The Jacobson family has an 89% stake, which The Sunday Times Rich List values at £45m. Jacobson estimates that the Jacobson Group’s products account for about 4% of all footwear sold in the UK, although he quickly quips: “Statistics are a load of rubbish, 78% of people know that”.
In January, via a newly created acquisition vehicle called Jacobson Ventures, Jacobson made a return to his retail roots by snapping up 25 Famous Footwear retail stores when its parent company Stead & Simpson fell into administration.
He says the Famous Footwear stores will only be used to clear excess stock and is angered by speculation that he might be about to open a retail chain to compete with his customers.
“I don’t want the involvement [with Famous Footwear] to be misconstrued by the trade,” says a riled Jacobson. “It’s not to be looked upon as a means to compete with our customers. It’s the opportunity to dispose of surplus stock without disrupting our retail customers’ businesses.”
Jacobson insists there are no immediate plans to roll out any more Famous Footwear stores on the high street and says that apart from his ambitions to secure more units for Gola – he has set his sights on stores in New York and Dublin and already has a flagship shop in London’s Carnaby Street – he remains a supplier at heart.
This is a family business, proud of its traditional values and dealings with customers, which is clearly why Jacobson is so irked by any suggestion to the contrary.
The driver that picks Drapers up from the train station is Jacobson’s nephew, who says he has been working at the firm, or at least going into the office, since he was seven, reflecting the family’s all-round dedication to the business.
“The business is tight knit,” says Jacobson, who is very proud of his team, with one employee having worked for the business for 29 years. Jacobson is concerned that this interview will be too much about his achievements and not enough about the team.
With assets of £50m and a head office full of trustworthy family members, one might question why Jacobson is not lying on a beach enjoying the fruits of his labour. But letting go of the reins is something he struggles with. “I’m criticised for being a bad delegator, but I’m not, I just want to get involved myself,” he smiles.
Jacobson admits that the buzz of a deal keeps him excited and committed. This month he acquired the licence for US comfort footwear brand Naturalizer and he has another deal in the pipeline.
“I do enjoy the deal-making process,” he says. “You see it as a money-making process and then you get attached.
“Utopia for me would be more of a chairman’s role, and I’m slowly moving into that, but the things that stop me doing that are new ventures.”
Although clearly passionate about his business, Jacobson is just as enthusiastic about his practical jokes and sense of humour. Jacobson can often be spotted wandering the halls of young fashion trade show Bread & Butter Barcelona in a suit and tie while all around him are dressed down in jeans or shorts. “That cheeky monkey thing means I might do something unexpected,” he laughs.
His lively nature does not necessarily reflect the state of the current retail market, but he accepts the situation with a smile on his face, as ever.
“In 30 years of business, I have seen our prices take a hike, oil and food prices take a hike. Utilities have hiked, house prices have dropped. Mortgages have been difficult to secure and banks have been frightened to lend. I have experienced all of that before – but never at the same time.
“If you want to ask me when it will end, you’ll have to call me Clair…Clair-voyant,” he shouts, and rolls about laughing.