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Multi-million-pound investment for Morleys

Store investment and reacting to an evolving customer has kept independent department store chain Morleys competitive, CEO Nigel Blow has told Drapers.

The independent department store group has eight stores, including its Brixton branch and Elys of Wimbledon in London, and Camp Hopson in Newbury, Berkshire. Blow was promoted from non-executive director in March as the group restructured its senior management team.

In his first interview since undertaking the role, Blow told Drapers the group’s ability to cater to store-specific customers has helped it outperform a weak competitor market: “We’ve done a big exercise internally in the last few months around who the customer is. We know a lot about our customers from a combination of the loyalty schemes we run and the demographic analysis available. We are able to do a lot of detailed work for every location on who that core customer is and who they should be.”

A testament to this is the significant investment planned for the group’s Brixton store in the coming year, said Blow: “There’s a really big opportunity in Brixton. We’ve owned the shop for decades, but Brixton and the customers have changed a lot, and we haven’t changed with them.”

The group’s business model is to take advantage of acquisition opportunities. In 2014, it bought family-owned Camp Hopson and reopened it in 2016 after a £3m refurbishment.

Several million pounds will be invested in the Brixton Morleys and Pearsons of Enfield in north London next year. The former will be a refurbishment and realignment of brand mix and offer to suit Brixton’s more contemporary customer, while the latter will be an update of the existing store.

“The reason we can win is because we are able to look in depth at these specific opportunities and plan a whole product strategy around a customer,” Blow explained. “We’re big enough to matter to suppliers and small enough to be agile and tailor what we offer to certain customer groups.

“It’s our USP as a retailer. We can know them because we only have eight stores, and it is something we can aspire to achieve and do well. When you’ve got 80 stores, your buyers can’t know every location.”

The group owns the freehold on all of its stores, which Blow said takes “one big headache out of the equation” during a period when retailers and brands are victim to increasing rates and rents: “We’re therefore able to look forward and reinvest some of the profits into the stores we’ve got. At the moment, not everyone can afford to, or is in a position to be able to, do that.”

Trading is up 5% year on year at Elys, which underwent investment in the past three years.

A slight dip across the other seven stores means group trading is flat, which Blow told Drapers the group felt was “reasonably comfortable” in the current retail climate: “People are constantly asking me if the department store model is dead. They’re going through a period of change, and there are opportunities for us because of the other retailers having difficulties.

“When you’re in a period of radical change then store investment is a bit further down the list, but we are profitable and on a sound footing financially and so can look into the future and take advantage of those opportunities.”

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