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Mint Velvet: the making of a £100m brand

Liz Houghton Mint Velvet co-founder and CEO

As Mint Velvet celebrates its 10th anniversary this month, co-founder and CEO Liz Houghton has big plans for growth with the support of its new owner.

On a gloomy day in High Wycombe, Mint Velvet’s striking 16,000 sq ft headquarters stand out against the grey sky when Drapers visits. Inside, the four storeys are fitted with glass-walled rooms and light grey tiled flooring, and decorated with own-brand scented candles, potted plants and soft-coloured cushions for a homely finish. The womenswear retailer signed a 10-year lease for the 13th-century listed building in September 2017. 

After a tour, Drapers takes a seat with CEO and co-founder Liz Houghton in the boardroom. A mother of three, she lives in Buckinghamshire with her husband and spaniel. The room is a far cry from the kitchen table where she founded the retailer in 2009 with brand director Lisa Agar-Rea and design director Jane Rawlings over a cup of mint tea, but a sure sign of how much the business has grown. 

Now under new ownership, but still with Houghton at the helm, Mint Velvet plans to build on its decade of growth to expand both its online and bricks-and-mortar offerings, enter new markets, and increase its product ranges.

“Until now, I didn’t quite realise just how far Mint Velvet has come,” Houghton says. “Reaching this milestone has been a good opportunity to stop and reflect on how much the brand has grown.”

In its latest results, turnover at Mint Velvet’s holding company, Sabre Retail Fashion, rose 15.5% year on year to £101m for the 12 months to 28 April 2018. Operating profit was up 10% to £13.9m, while EBITDA grew 13% to £17.3m. The 2018/19 results are being audited, but Houghton says it “has remained in good shape”. In the period, it invested in its head office structure and brought on new staff, bringing it to just over 100 employees at its headquarters and 817 staff in total.

In March, Lewis Trust Group (LTG), the investment business set up by the founders of River Island, took control of Mint Velvet, building on the “significant” stake it bought in December 2015. The Mint Velvet founders still run the company independently, ensuring it keeps its identity.

We love stores, but the biggest growth opportunity is digital

Liz Houghton, Mint Velvet

Clive Lewis, LTG managing director and chairman, tells Drapers: “We are delighted to have been part of Mint Velvet’s success story. Since having initially invested in the business, we have seen the brand go from strength to strength. They have done so much in only 10 years and the next 10 will be just as good.”

“Mint Velvet has had a very successful trajectory to date, but I think having LTG behind us is going to really help us going forward,” Houghton says.

Web 190828 mv iconsbrochure shot 6 538rtchnew

Mint Velvet Icons Collection

Future plans focus on expanding its store portfolio, wholesale accounts and digital offering, both in the UK and internationally.

Mint Velvet opened seven standalone stores during 2018/19, and now has 47 UK own stores and 15 stores globally. It has 86 concessions worldwide, including those in House of Fraser, Fenwick, independent department stores and John Lewis in the UK. Including outlets, it has 136 locations globally.

“There is a place for UK store growth. We opened one on 13 September in Stamford [Lincolnshire], and will open another three [in yet-to-be-disclosed UK locations] in the next six months,” says Houghton. “We’re also relocating branches – in Edinburgh, we moved to a bigger store over the road last year.”

Mint Velvet opens around six stores a year. It does not have a target number, as it is focused on “finding the right locations, in the right market with the right commercial terms”.  

Houghton adds: “We love stores, but the biggest growth opportunity is digital.” Online makes up 45% of sales, 20% is from own stores and 35% from concessions. 

In January, Mint Velvet hired a new head of digital, Lisa McMahon, from Warehouse, and expanded its data analytics team. The new digital team is working to create a seamless link between stores and ecommerce, and greater alignment of systems and processes.

Another big push is entering international markets digitally via its own website, which has been enabled for international transactions since 2014. International makes up 8% of sales and Mint Velvet plans to grow this. The initial focus will be on marketing the brand in the US and Germany.

Wholesale is a further focus, and currently accounts for just 2% of sales. Mint Velvet has one UK wholesale stockist – styling website Stitch Fix – and two international accounts: department stores Von Maur in the US and David Jones in Australia.

It is in early talks with wholesalers, both UK and international, but “not little boutiques”. It is exploring options with the “bigger players”, including digital partners and marketplaces, and is planning to wholesale in Germany for the first time.

We felt there was nothing for women like us in the market. We still wanted to feel modern, relevant, sexy and glamorous

Liz Houghton

Although Mint Velvet is now well established, launching the business was not all plain sailing.

After starting her fashion career as a corporate trainee with Topshop at Burton Group [now Arcadia Group] in 1986, Houghton moved up the ranks to become buying director for Principles in 2000. She was promoted to brand director in 2005.

Principles remained part of Arcadia Group until 2001, when it was sold in a management buyout, which led to the creation of Rubicon Retail. Rubicon, and by extension Principles, was taken over by Mosaic Fashions in 2005. Mosaic, which also owned Oasis, Warehouse and Karen Millen, collapsed in 2009 after Icelandic shareholder Baugur Group went under. A new venture – Aurora Fashions – was created by Mosaic’s former management and Icelandic bank Kaupthing to take on the bulk of the brands. However, Principles was not included in the deal and went into administration in March that year.

“I was made redundant, along with Lisa and Jane,” Houghton says. “The girls and I all worked together at the time, and we got on really well. It sounds clichéd, but we were sat round my kitchen table and I said, ‘Why don’t we do our own thing?’”

She explains: “We felt there was nothing for women like us in the market. We’d grown out of fast fashion, but we weren’t ready for those ‘grown-up’ brands. We still wanted to feel modern, relevant, sexy and glamorous.

“That’s where the ethos of ‘relaxed glamour’ came from.” Houghton embodies this, dressed in a vintage black Mint Velvet blazer, paired with the brand’s new-season jeans and animal-print boots.

Mint Velvet offers its customer soft leather jackets, slinky knits, shoes and dresses. Retail prices range from £39 for a T-shirt to £189 for a coat. It also has a brand for girls aged three to 10, called Mintie, which launched in August 2018. It is sold in selected Mint Velvet stores, online and in John Lewis. This range is priced from £15 for a pom-pom hat to £69 for a winter coat.

Houghton says there are still lots of opportunities, including launching beachwear and swimwear, and adds: “We are flirting with home and have so much more to do on accessories, but we don’t want to just keep expanding and become scattergun.”

Erica Vilkauls, former CEO of womenswear retailer LK Bennett, says Mint Velvet has “nailed” its offer: “The prices are keen, which makes it attainable and enables multi-purchasing. It embraces trends, but the look and feel are instantly recognisable. It is not [too] age specific, and creates items for a variety of shapes.”

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Co-founders Lisa Agar-Rea, Liza Houghton and Jane Rawlings

By July 2009, the trio had secured an undisclosed sum of investment from ex-Principles chief executive Peter Davies, and former Rubicon directors Richard Sims and Chris Inman. They then took the idea to former executive chairman of House of Fraser, the late Don McCarthy.

“He gave us three months to come up with a range to sell in 10 HoF stores,” Houghton says. “We had to design the range, come up with a website, and design and launch two boutiques [in Windsor and Chichester]. It was a very tricky time.”

Liz always had an incredibly clear vision for the brand and understanding of the customer

Stuart Grant, Mint Velvet

She adds that starting out in the middle of a recession was a “huge” challenge, but helped to create a resilient business that can fight future setbacks. One of these initial difficulties was sourcing.

Mint Velvet now sources from around 43 suppliers in China, India, Vietnam, Turkey, Spain, Italy, Bulgaria and the UK. During set-up, the co-founders stumped up their own cash to visit suppliers and place orders for initial stock. 

Houghton says: “It is a big leap of faith for a supplier to deal with a new company, let alone during a recession. At that time, a lot of businesses had problems and suppliers hadn’t been paid. We were lucky that suppliers believed in us and we were able to build great relationships with them from the beginning – some of them are still our biggest suppliers now.”

Hina Moss, founder of London-based supplier Kirei, has worked with the retailer since 2009: “Mint Velvet is very fair and loyal to its supply base. They’re very professional and passionate about design, which is why we’ve married so well over the past 10 years and will continue to do so.”

The “next big bump in the road” was HoF entering administration in August 2018. Mint Velvet closed around 10 of its 40 concessions, and was owed £2.6m, administrator EY’s report shows.

Houghton says: “Luckily, the business remained in good shape despite the disruption. We were able to weather that storm.” 

As a result, she is “not too worried” about whether the UK leaves the European Union on 31 October without a deal: “We’ve had those ‘what if’ conversations, and have plans in place. When you’ve overcome challenges like we have, nothing can really faze you. We just put our heads down and get on with it.”

Vilkauls believes that this resilience is key to the company’s success, and says Houghton “has shown drive and determination, and a true belief in the concept”.

Mint Velvet non-executive director Stuart Grant, who came on board a few months later as an additional co-founder, agrees: “Right from the start, Liz always had an incredibly clear vision for the Brand and understanding of the Mint Velvet customer – identifying a gap in the market back in 2009 and successfully leading the business to grow annual sales beyond £100m today.

”Liz always puts the Mint Velvet Brand and her team first – encouraging a positive, transparent, open-minded and energising culture within the business.”

Houghton was awarded an OBE in 2017 for her services to business and charity. This includes the Will Houghton Foundation, which she set up after losing her son, age 19, in a bicycle accident in 2016.

However, she says the OBE was for the whole team: “We employ a lot of people, and we try to make customers happy. I think they realised there were women behind this brand who had put all this passion and love into it. Although I was awarded it, it was more like an award for Mint Velvet’s wonderful success.”

Houghton embodies Mint Velvet’s style, relaxed glamour and humour, and has a sense of enthusiasm that has driven it through the toughest of times. These qualities will serve her well as she aims to expand her brand in today’s challenging market.

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