Mike Lester, CEO of lifestyle retailer WoolOvers, unexpectedly doubled its sales in April.
Mike Lester, WoolOvers
The last couple of weeks of March were really difficult because sales dipped because of coronavirus, but then during the course of April things picked up online and through our mail order catalogue, and we ended the month with a really positive like-for-like sales performance.
Structurally, we’ve got a few things in our favour. We are mostly direct to consumer – selling online through our own website and our mail order catalogues – so haven’t been impacted as much by the closure of shops or from loss of wholesale business, as other retailers have been. We have a factory shop, which is currently closed, but it only accounts for 2% of our overall sales.
At our call centre and distribution facility in West Sussex, we are able to ensure we are working as safely as possible.
We are also all on one site, which meant we could make changes really quickly as soon as we saw what was going on in terms of working patterns and processes to ensure we could keep critical staff in the building and let others work from home.
At our year-end at the end of March, we were trading 30% up year on year with gross sales of more than £23m. Following the setback in late March, April trading was really strong – up 100% year on year. We were only expecting to be up 40%-50% up year on year.
In terms of why sales have increased, I think it’s a lot to do with talking to our consumer in as many ways as possible.
Our annual marketing spend is 25% of net sales, which includes 12 catalogues per year.
Others have pulled back on marketing spend, but our catalogue has worked really positively for us – we’ve increased spending on digital channels, and we’ve continued to advertise in all the national newspapers.
There was a period where every CEO was sending out a message about how they were introducing deep cleaning in their warehouse and how they were ensuring their staff were washing their hands.
We felt there were better ways we could talk to our customers. At our call centre, we weren’t taking a lot of orders, so we invited customers to just give us a call and have a chat – they didn’t need to be placing an order.
Our customer demographic is slightly older at 50-plus and had often started self-isolating earlier, so had the potential to be quite lonely. We put that message out and had an amazing response.
Over the first couple of days, there were about 250 people that contacted us to say it was really nice to see that we were offering it.
There were obviously some lonely and sad stories, but it felt like an honest and authentic thing for us to do rather than talking to people about our cleaning regimes.
We’ve also benefited from the diversification in the business, both in terms of international markets and our product offer. We sell in five international markets: Germany, Australia, the US, France and Russia, and 45% of sales coming from our international markets. We offer everything from loungewear to homeware and footwear.
We’re now in a much better place than I thought we’d be in six weeks ago.
Early on when the furlough scheme was announced (20 March), we furloughed around 35 jobs – about 30% of our staff – after we saw a sharp decline at the end of March.
We would have been in a position where we might have had to make redundancies, but we didn’t because of the government furlough scheme. But now we’ve brought most of them back into the workforce. We have about 5% still furloughed but over the next six weeks, we think they will be brought back into the business.
What the next year will hold is an unknown at the moment.
I think it will be impossible for the workplace to go back to what it was, but I’m not sure what that means. Being on site for us is hugely important, but whether we’re all on site every day is another question.
Across retail, direct-to-consumer channels will become increasingly important.
In the autumn, it’s almost certain we’ll be living in a recessionary world, but I believe some people will still want to update their wardrobe as it gets colder.
We haven’t cancelled any orders with suppliers, and we’re not planning on reducing our marketing spend at the moment.
All in all, we’re cautious, but I believe we’re small and agile enough to trade through this.