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A new era of wholesale

As brands expand on the high streets and online, Drapers investigates their changing relationship with stockists

White Stuff Oldenburg

White Stuff Oldenburg

A White Stuff store

It used to be so simple: brands created product and retailers sold it.

But in the brave new world of omnichannel retail, brands and their stockists must try to keep pace with an ever-demanding consumer who wants to buy what they want, when they want and from where they want to buy it. Traditional relationships between brand and retailer, retailer and customer, and brand and customer are changing.

Open relationships, direct-to-consumer brand awareness and a different approach to holding stock are some of the ways the wholesale sector is evolving to the demands of the expanding retail landscape – and stockists are having to adjust to these new ways of doing business (see box, below).

Juls Dawson, co-founder of London-based fashion agency Just Consultancies, believes it is essential for brands to have a direct relationship with consumers, either through their own retail or on social media, to gain a following: “Some of the biggest recent successes have been brands that have huge social followings or strong ecommerce because that really underlines what the brand is about.”

Phil Hazel, owner of contemporary men’s and women’s wear independent The Liquor Store in Birmingham, agrees: “[Retail is] all about telling stories, so raising awareness [via stores or social media] can help.

“If customers see the brand more, they know about it and our customers will buy from us because they feel they know us and what we’re about.”

“It comes down to what your strategy is – a bit of common sense and openness,” says Fergus Patterson, managing director of Gant for the UK and Ireland, who explains the business is split fairly evenly between wholesale and retail.

“Our job is to make the brand as desirable as possible for the end consumer and our wholesale customers. It’s very much a two-way relationship: we want the brand to be stocked in those places as much as they want to stock us and if you have a couple of bad seasons, they’ll drop you.” He says Gant has a complex matrix of all its accounts, which is studied carefully when opening own stores.

“If there is any crossover [between our own retail expansion plans and existing stockists] we try to make sure they know about it as early as possible and understand why we’re doing what we’re doing,” says Patterson. “The other thing is that we have a big range, so while there will always be an overlap of the key styles and bestsellers, there is more than enough product to allow an element of exclusivity for all. Making sure there is enough point of difference is down to good account managers looking after their customers.”

Lifestyle brands Joules, White Stuff and Seasalt are among those that have a strong base of wholesale customers and are expanding own-retail operations.

It’s important to look after all of our customers and recognise all channels of distribution

Jeremy Seigal, chief executive, White Stuff

Joules and Seasalt were not available for comment but White Stuff chief executive Jeremy Seigal says: “It can be a challenge when you increase distribution but we need to be open and honest about it, and not give people unpleasant surprises. We sometimes get it wrong but we do try to get it right. It’s important to look after all of our customers and recognise all channels of distribution – both the final consumer and our stockists.” White Stuff has 104 UK shops and 175 wholesale stockists.

Many brands use own-retail channels to test products that will be eventually rolled out to wholesale stockists. Dawson explains that own stores and ecommerce allow brands to test and refine products and new concepts much faster than relying on sales data from third parties.

“There is no better indicator for a brand to be able to read trends and react quickly to make refinements than through its own retail channels,” he says. “Own retail also allows lower minimum order quantities for wholesale customers and a wider range. It works well if managed properly and discounting is kept to the correct Sales windows.”

Skechers, for example, is to launch its new clothing business through own-retail channels in the UK, starting with its new Oxford Street flagship in London, due to open in November. Skechers’ 43 UK stores make up about 25% of total sales.

James Eden, owner of Manchester-based menswear brand Private White VC, believes opening his first store gave other retailers the confidence to take on the brand as a wholesale label, as well as providing a representation of what the brand is about.

The future of wholesale is moving away from choosing a narrow assortment of products and when it’s gone, it’s gone

Fergus Patterson, managing director UK and Ireland, Gant

There is a growing movement of thought that wholesale may not be confined to just the items that the retailer has selected and holds in stock.

“The future of wholesale is moving away from choosing a narrow assortment of products and when it’s gone, it’s gone,” says Patterson. “Increasingly we’ll see stores, both ours and others’, as fulfilment hubs to allow us to give greater convenience and flexibility.”

While it may offer greater flexibility for brands, this change to the nature of wholesale has an impact on retailers. A brand opening a store close by or aggressively discounting through its own channels is not just an issue that affects independents. Colin Temple is managing director of footwear multiple Schuh, which stocks many brands that operate own stores, including Clarks, Adidas and Dr Martens. He says brands need to tread carefully when expanding their own retail to ensure they get the balance right with their existing stockists.

One British tech firm aiming to transform the traditional wholesale model is Cheltenham-based Anatwine. Its technology allows retailers to supplement their wholesale buy with product that can be ordered by the customer on its website directly from the brand. By enabling retailers and brands to integrate their systems, they give consumers more choice.

The firm, established by former SuperGroup ecommerce director Chris Griffin in 2013, has former Tesco chief executive Sir Terry Leahy as a non-executive, and carries some heavy retail clout, attracting a further £8.5m investment in June. Germany-based Zalando also acquired a minority stake last year and it is now working with Adidas, Next, Harvey Nichols, House of Fraser, Marks & Spencer, JD Sports and VF Corporation.

“I think that the traditional wholesale model is a good way of working for both brands and retailers but it is flawed because you have to use historic data to forecast by the nature of buying in advance and you are limited by warehouse capacity and buy size,” says Griffin. “Our technology can eliminate that inefficiency so we are not replacing wholesale, just growing the opportunity.”

As the relationship between brands and retailers continues to evolve, both halves of the equation need to act with sensitivity and caution. Independents will have to accept that their brands may want their own retail presence, and brands must acknowledge their stockists’ role in getting them to that point.


Indies in evolution  

Own-brand stores and brands competing online with their stockists are not new but the dynamics of an omnichannel market, wider economic uncertainty and issues such as discounting can create tensions.

“At the moment, it feels like brands want to have their cake and eat it when they open their own stores and hold mid-season Sales or offer discounts online that we can’t offer,” says David Harries, owner of womenswear independent Russell Smith in Felixstowe, Suffolk. He says he supports the brands that support him.

Steve Cochrane, owner of premium Middlesbrough independent Psyche (pictured above right), believes widespread discounting is a bigger problem: “There doesn’t seem to be much support or loyalty [from brands]. Brands used to police things like discounting early but now it can be a free-for-all.

“The whole retail sphere is changing faster than people can get to grips with so it is catching a lot of people out. A lot of people like the security and stability of the status quo.

“You either need to get out, go to trade shows, look online for new brands or perhaps indies could get together and do our own label,” he says. “We sell our own-brand shirts, so you can do more of that. It’s about thinking outside the box.”



Readers' comments (2)

  • The comments made by some of the brands are disingenuous and the 'element of exclusivity for all' quote cannot be taken seriously. What they are saying is 'We (the brand) will do what we like and you (the retailer) can either accept it or not. That's the way it is'

    Now that may be all very well in theory for Brand X, but once the retailer has moved on to others brands that aren't so self absorbed these fully integrated labels will gradually fall apart as they won't have an independent retail network to point out all their faults and mistakes and what they can do to turn it around.

    Brands that only want the fully integrated route are playing with fire, because their long term plan will end in failure because there will always be cleverer, smarter and better brands than themselves.

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  • Technology is coming to market to support independents.
    The challenge is whether enough will embrace developments 'en masse' to influence quick scaling so that wholesalers and designers get involved.

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