After scooping two Drapers Footwear Awards last month, including Multiple of the Year, Dune chief executive Daniel Rubin aims to cement the retailer’s success with a new shopfit and overseas growth
As Dune chief executive Daniel Rubin strode away from the stage after picking up his second gong of the night at the Drapers Footwear Awards, the soles of his size eights flashed red. Carrying him back to a raucous Dune table where the team were celebrating their wins were a pair of spanking new Prada shoes, polished and dapper. “Prada gets it right, although the shoes do squeak,” says Rubin. “I should tell someone about that. You don’t want squeaky footwear - it can be embarrassing.”
Rubin is a traditional character and a perfectionist by nature. An accountant by trade, he is methodical and strategic, and has been the driving force behind a plan to make Dune a “respected, powerful, global footwear brand”.
Over the past year, Rubin has led the opening of Dune’s flagship store in Covent Garden, launched its transactional website, continued to roll out international stores and kicked off a revamp of the 40-store UK portfolio. He is also chairman of footwear supplier Browning Enterprises, which has sales of £60 million and supplies more than 10 million pairs of shoes a year to high street shoppers.
The fact that Rubin owns more than 90% of both companies does not please some of his peers. Stylo chief executive Michael Ziff says: “He is a really good retailer. His execution is excellent and his selection of product is good. However, it hacks me off that he’s a retailer because he’s also a supplier. He gets a better deal because he is a supplier as well.”
Rubin denies this, saying both businesses are run autonomously. “I think it’s healthier that way,” he says “Dune sources independently.”
The chief executive of one high-street multiple says Dune is a strong business, mostly thanks to its management team. “It is a tidy operation. It has the monopoly on the events market, including Ascot and weddings; its head office is strong; and, because Browning has a good handle on margin and supply chain, it also has speed to market.”
It is likely that the connection gives Dune a competitive edge. Drapers last interviewed Rubin in 2002 and since then, the business has grown by an impressive 177%. In 2005, annual sales stood at £18m. Today turnover is £50m, bucking Rubin’s ambitious targets of 20% year-on-year growth.
The online store - coincidentally launched on the same day as rival Kurt Geiger’s last October - has also exceeded expectations, taking £800,000 in its first year. Rubin says the site is the chain’s third largest shop and growing. It is transactional across Europe, and a US launch is scheduled for this month. At present, 15% of visitors to the European website are from the States, so Rubin hopes the Americans will welcome Dune’s foray into the US retail market.
In April, Rubin hired former River Island buying manager Liz Fenner as buying director. Charged with responsibility for both the buying and design departments, Fenner has a strong retail pedigree, including a stint at Kenneth Cole in the US.
Dune has 12 franchise stores overseas. Back in 2002, Rubin was bullish about his ambitions for a company-owned store in New York but this has not materialised. “I know I said that in 2002, but it hasn’t happened yet. I do think we’ll be there in two years’ time - I’m sure we’ll get there,” he says.
For now, Rubin is focusing on existing business. A new shopfit, being rolled out to top stores this year, is clearly his pet project, as he enthusiastically whips out the latest mood boards to show off the crafted light wood, glass and steel designs.
He hopes the new look will enhance the men’s and women’s offer. Men’s footwear is 28% up on the year and a real growth category - at the retailer’s Covent Garden store, men’s sales account for about 18% of turnover.
The Covent Garden store takes the highest sales per sq ft across the entire business, and its sales record has given Rubin the confidence to branch out globally. He says that steady foreign growth makes sense for the business, but adds: “One does not want to get carried away opening abroad.” After reaching into his waste paper basket to fish out the latest trading figures from his franchise stores, he says they are up on last year and the 12-outlet operation now accounts for 10% of total turnover. It is going well, he says, considering the franchise arm only came about when a franchisee approached Dune after seeing a store.
He says: “Six of our 12 outlets opened over the past 12 months and most of them are based in the Middle East. We got into negotiations with the franchisee and it made us aware of the opportunity. Customers there like the glitzy, glam nature of our shoes, so we teamed up with Dubai-based Apparel about three years ago.”
Only 35% of product in the franchised concessions and stores is the same as that offered in UK shops. The rest is designed and supplied for each international market. “All we do is sell the shoes. We don’t have to run the stores so, from our point of view, there really isn’t a limit to the number of stores that could be opened,” says Rubin.
According to its competitors, Dune’s strength is really knowing its customer - a typical British good-time girl, a little WAG-ish and very flashy. “British women like to dress up. In comparison, French heels are far lower,” he says, explaining that on a recent trip to France he noticed the height of the typical heel was conservative compared with that in Britain.
This may be so, but the UK has shifted to a more casual look in the past year. Like everyone else, Dune has been quick to capitalise on this, buying heavily into ballet pumps. But its pumps are covered in faux pony skin and priced at a steep £55 a pair compared with his mid-market high-street competitors. The “special ballerina” is the Dune bestseller and its casual range has seen one of the biggest increases in percentage terms over the past year, up 22% like-for-like.
Surely this long-term trend towards casual dressing poses a problem for Dune’s glamorous ethic? Not so. says Rubin. “If you can combine comfort and fashion, you’re onto a winner. Look at footwear brands such as Pod. You wonder how it makes money, but it has its strategy right. This season has been one of contrast - very high platforms or flats - and there has certainly been a big shift. It’s not casual in the same way as Ugg boots, for example, but in the sense that it’s unstructured and easy to wear.”
A pair of Dune shoes has an average price of £60, with summer styles averaging £50 and winter lines weighing in at £70. Today, the company’s pricing is at its highest ever. “The tendency now is to push the price up and add value,” says Rubin, who attributes the price rises to a larger in-house design team. There are three designers at the west London head office, taking the total number of staff there to 43.
Rubin says prices are rising across the market. On the supply side, prices are edging up in China on the back of heels and uppers being made from petro-chemical sources, the cost of which are inflating globally. Fewer people in China are moving to the south of the country, where manufacturing is based, leading to more competition for labour, and there are huge challenges with power and electricity. “A mix of factors means suppliers in China are saying ‘no we can’t go any lower on price’,” says Rubin. “That is filtering through and people are pushing up their prices to reflect that.”
One of Dune’s best-selling sandals - a strappy diamante-heeled style - retails at £120 and is sourced in China. “For shoppers, the next step up for this sort of product would be going into Gina or Russell & Bromley and paying three times as much,” he says proudly.
Rubin has a lot of respect for Russell & Bromley, believing that “much of the rest of the UK footwear market has lost its soul”.
“Internationally, our main competitors are Nine West and Aldo. We aspire to businesses like those in terms of size, muscle and professionalism, and in terms of the margin they make. I’m very envious.
“I really struggle to find anything else exciting in the UK. There are retailers out there that do a consistently good job, such as New Look at the value end of the market but, as far as shoe specialists go the fact that I am struggling to name a business is indicative of the fact the market is in a bit of a mess.”
The day before the interview with Rubin, the Ravel chain was axed by parent company Clarks which, in turn, forecast a loss of £13m for next year due to anti-dumping duties of 16.5% being leveraged by the EU on imports from China.
The EU debacle clearly riles him. “The problem lies with the EU,” he insists. “The whole thing was a farce and, in the end, the decision was down to the vote of Cyprus. The whole investigation was flawed. Comparing product made in China with product made in Brazil is like comparing apples with oranges.”
This pressure from the EU does not help struggling footwear specialists, and Rubin laments the consolidation going on. A number of businesses looking for a new buyer have passed across his desk recently, with many of them pricking his interest because there are economies of scale to be gained. But he adds: “The history of people taking their eye off the ball with something like this is legion - you just don’t want to go there. My strength is that I know the Dune brand but I am also a little old-fashioned when it comes to trying new things. Unless there is a really exciting deal to be done, I’d rather keep my powder dry.”
On shoes: “I just love the product. It’s touchable, it’s a solid 3D object that has personality and it is intrinsic to life - you wear shoes most of the time. It’s a reasonably complex product to work with and provides interesting challenges.”
Favourite footwear brand: Prada
Favourite city to shop: New York
Least favourite shoes: “Adventure sandals - I think they look horrible.”
Dune footwear faux pas: “Banana heels. They sounded good at the time, but when they hit the shelves we wondered why we bought into them.”
Dune’s stand-out bestseller: The Merger, a peep-toe court shoe with an antique-style brooch on the vamp.