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David Inglis

The man in charge of turning around home-shopping giant Shop Direct Group, whose portfolio of catalogues includes Littlewoods, is determined to make its own-brand product every bit as desirable as its branded offer.

David Inglis’s creative instincts sit comfortably with his working life, as he believes a passion for product is fundamental to a healthy business. At home-shopping firm Shop Direct Group’s head office in the heart of Liverpool, where a huge team is hard at work, Inglis emphasises that a clear vision of branded and own-brand product is what will define the company.

Shop Direct, best known for its flagship Littlewoods brand, is midway through an ambitious five-year turnaround plan. The transformation includes boosting the number of its big brands from 250 to more than 400, reducing its supply base from 2,700 suppliers to 600, doubling the amount of product sourced from overseas and transferring eight million units of stock to one warehouse system. As if that was not enough to keep Inglis’s team on their toes, Shop Direct is redesigning every one of its websites and has launched its first advertising campaign in a decade.

“We’re on track with the recovery,” Inglis says. “We’re concentrating on new product – this will be key. There’s not always been fantastic product from big book retailers, including ourselves, but this is something we want to change.”

Inglis joined Shop Direct as buying and merchandising director in March last year from supermarket chain Asda, where he headed up the non-food section. Following a boardroom shake-up, in which the buying and merchandising teams were merged, Inglis was appointed group trading director. Sales and marketing director Clive Briscoe, the brains behind Littlewoods’ successful Trinny & Susannah advertising campaign, left the business when the teams merged.

Inglis now heads a team of 850, with 14 people reporting to him. “My job has everything to with product and customers. It entails sourcing, buying and merchandising, product design, managing the websites and marketing,” he says. ~

According to research company TNS, Shop Direct is the UK’s largest online clothing, footwear and accessories retailer, with a market share of 11.9%. Second biggest is Next, with a 10.8% share. Empire Stores, the catalogue retailer recently acquired by Shop Direct from parent company Redcats, comes in as the fifth biggest.

In March 2004, the Littlewoods home-shopping operation merged with home-shopping firm GUS Shopping to form Littlewoods Shop Direct Group – a name recently whittled down to Shop Direct Group – to create an umbrella company for brands including Littlewoods. The portfolio of
catalogues also includes Marshall Ward and Additions, and the group expects a profit of £50 million for the year to April 30 2008.

The business, privately owned by the Barclay brothers, Sir David and Sir Frederick, will update the market later this year on performance. Inglis says: “We’re on target with the figure of £50m, but we won’t be talking about the results until October. We would never say that we are riding a wave as individual weeks can vary, but we’re up year-on-year.”

Clothing leads the way

In February, Shop Direct announced its bullish intention to double online sales to £1 billion by 2011. It is set to hit £500m in the year to April 30 2008. At the time of the announcement, Shop Direct’s chief executive Mark Newton-Jones said: “We are fast becoming an internet retailer, not a
mail-order business.”

Littlewoods has three main businesses – electricals, homewares/furniture and clothing. Clothing, which accounts for about 40% of the mix, is significant, according to Inglis, because it is the group’s main route to market. “We have a typical department store mix, but clothing is absolutely central to the proposition. About 85% of our customers come to us through clothing, womenswear in particular. We’re a clothing-led business.”
A study this year by research firm IMRG Capgemini predicts that between 30% and 50% of all retail sales will be made online in the next five years. Furthermore, a report from online retail research firm Hitwise, published in August, reveals that online fashion sales are growing at a faster rate than any other retail category.

Inglis says it is the huge potential in online growth which will help drive sales at Shop Direct. An average of 42% of sales come
via the internet at Shop Direct, but he expects this to reach 70% in the next three years. Currently, the customers that fuel the most profit use a mixture of catalogues and the internet.

Shop Direct has nine catalogue fashion brands – Additions Direct, Choice, Empire Stores, Great Universal, Kays, Littlewoods, Littlewoods Direct, Littlewoods Ireland and Marshall Ward.Inglis says: “We’ve gone from being a paper-based organisation to an online retailer, but we will never lose the paper. We’re currently deciding how big our spring 09 catalogues will be, and deciding on our paper strategy going forward.”

There has been an evolution in the company, he says, from home shopping to online. “We’ve stopped thinking of ourselves as a big book retailer. We sell great product to customers from a distance. I don’t foresee a point in the short to medium term where paper isn’t at the heart of what we do. But now it isn’t at the start of what we do – internet will be at the start. Our research and product development is now all online.”
However, with the online fashion market becoming more crowded, and successful players such as Asos reporting record figures – in August sales reached £1 million in a day for the first time ever – differentiating Shop Direct’s offer is a prime concern.

Out on its own

Since joining Littlewoods, Inglis has launched a raft of sub-brands, as well as drafting in a team of product experts to define the own brand offer. The own-label strategy is being led by Rebecca Elderfield, creative director for product, formerly creative director at Jigsaw, and womenswear buying director Jane Hotz.

Clothing is split into three categories: high street names, such as Oasis and Miss Selfridge; the traditional branded offer, including young fashion brand Bench; and Littlewoods’ own brand. Inglis says he wants own brand to stand up strong alongside branded product in the catalogues, giving both offers credibility in the fashion stakes.

The ratio of branded to own brand clothing is 50:50, which Inglis says will stay the same. “50:50 works, that’s where it’s naturally settled. It’s been customer-driven. It will remain important because our customer base sees it as important. We still see ourselves as ‘the home of big brands.’”

When he joined, the own-brand offer was not quite up to scratch, he says. But by the end of this year, Shop Direct will have seven womenswear own labels – Love Label, the young fashion offer; the smarter, mass-market Definitions; Savoir, which Inglis describes as “embellished and beautifully finished”; South, the casual mainstream offer; plus-size brand So Fabulous; and Berkertex, its classic range. The seventh, a women’s designer/eveningwear label called Teatro, will launch later this year.

The menswear own-label offer has three sub-brands: Goodsouls, Littlewoods’ first fashion offer for men; urban range Brooker and tailoring collection Taylor & Reece. Inglis says: “I wanted each to be clearly defined. We had previously tried to develop a stronger fashion offer but with only a few sub-brands the offer was confused.”

He believes the business’s typical customer is changing. “We’re getting a huge proportion of new customers who are under 35. They are getting younger and slightly more affluent and we are catering for them with our new own labels. There are also more males as a proportion than there were previously. The online space is becoming easier for men to shop in, and it’s hassle-free.”

However, juggling 10 own labels, over half of which are new, alongside an increased branded offer, is not without its challenges. “There is a complexity with so many different own brands in one business. They each need credibility and a tone of voice, but with clear definition and good product. They stand out on their own against the national brands, and sell themselves,” says Inglis.
Relishing the challenge

There is added competition from the bricks-and-mortar stores that are migrating online. Inglis says: “I’m not concerned about the competition. I don’t believe the future of retail is a fully integrated multi-channel model; this is not something customers want. As delivery options become more flexible the need for stores decreases.”

In the gloomy economic climate, he believes the online model will suit cash-strapped customers even more. However, to stay ahead in the retail game, Inglis says a business must evolve. “We update the way we present product to keep it fresh, and launching a new advertising campaign has really helped.”

Shop Direct’s above-the-line ad spend, which last year was £20m, is focused on the Littlewoods brand. Inglis emphasises the importance of advertising for a home shopping/etail firm, as they lack the marketing tool of a shopfront. In Littlewoods’ latest ads there is a mix of brands and own brand product, and the ‘home of big brands’ strapline has vanished. Inglis says: “We’ve not lost ‘the home of big brands’ as a strapline. It’s still fundamental to the business, but our new campaign has the line ‘bringing fashion to your door.’ The message is clear – fashion credentials alongside the distance of online.”

When asked what the future holds for Shop Direct Inglis says it will involve growth, either organic or via acquisitions. “We’re not looking at acquisitions at the moment, but if the route to growth is acquisitions, then we’ll take it.”

In January, Littlewoods announced plans to acquire the debtor book of home-shopping business Empire Stores UK, from its parent company Redcats, along with the Empire Stores brand name and customer database. The deal went through in July. Littlewoods has just produced an Empire Stores catalogue, which also includes Littlewoods’ own brands.

However, Inglis points out: “We’ll never stop focusing on product. Brands are of huge significance to us. In the next two-and-a-half years we’re looking to increase the level of profitability in the business and grow the size. We’re hitting growth in profit numbers and we want that to continue.”

CV
2008 Group trading director, Shop Direct Group
2007 Group buying and merchandising director, Shop Direct Group
2002 Business unit director, home and leisure, Asda Wal-Mart
2001 General manager, entertainment
and home, Asda Wal-Mart
1998 General manager, entertainment, Asda Wal-Mart
Market development director, BMG Records UK

Q&A


Which is your favourite retailer?
All Saints. I have a genuine interest in the design handwriting – it’s unique – and the clothes in there are great. That’s where I spend the
most money.

What is the best-selling product you have ever worked on?
Three things spring to mind at Shop Direct – an origami pleat skirt, which we sold about 80,000 units of; a skinny kick-flare jean which shifted about 60,000 units; and there was also a dress by Danish brand Villa, which sold about 55,000 units.

What product has been the most exciting in terms of design?
Our new men’s own brand Goodsouls, because it is Shop Direct’s first fashion offer for men.

What has been your proudest work-related achievement?
My first year at Shop Direct. The transformation of the business that we have been able to collectively achieve over the past year has been amazing, both in terms of product and trading performance.

What has been your biggest challenge?
The biggest challenge for me is to attain a consistent level of belief in the company among people outside the business. Some people need more convincing that the business has changed, but then there are others who have moved on massively with us in terms of belief in the business.

What would be your dream job?
I would love to be a fashion photographer or a film-maker.

What do you enjoy doing when you are not at work?
I love painting – I paint abstract acrylics on canvas – I’m also a keen photographer. I would like to spend more time with my children, as I have three girls aged nine, 11 and 13. But I couldn’t imagine not working, because I genuinely enjoy my job.

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