Blacks Leisure chief executive Neil Gillis talks to Drapers about premium outdoorwear, own label clothing and the future of the boardsports market in 2009.
You’ve said profits for the year will be lower than expectations. Will you be having to make job cuts?
We did that at the beginning of last year, with about a third reduction, so there are no plans to do any more.
Why have you decided to convert 10 Freespirit shops to Blacks and Millets stores?
We did a trial where we converted our Freespirit store in Eldon Square in Newcastle to a Blacks shop in September, and it has gone really well. We’ll do about a quarter of our Freespirit stores. They are mostly in urban areas so will suit being converted to Blacks stores better.
The outdoor business seems to be holding up well, what’s driving that?
It wasn’t the weather because we had a mild November and December which wasn’t in our favour. The biggest change is the way we have merchandised the stores, the store refurbishments and the things like really flexible displays and window displays which we can change frequently and quickly. We’ve also been putting more boardwear-type brands in our outdoor stores. It shows that our recovery plan is working well. It’s just the boardsports division that is holding us back, which is a shame because its only 20% of the business.
You’re putting surfwear in your outdoor stores, so what is the long term future of the surfwear division and the boardsports sector?
You’ve got to question whether boardwear as a sector has got a long term future. I think most of the operators in that sector are struggling. It could be a fashion that’s had its time. Boardwear is becoming a good addition to our outerwear stores. I wouldn’t be surprised if we had converted them all in 18 months.
You tried to sell the boardsports division didn’t you?
Yes, there was a lot of interest, but nothing serious. I think people thought they’d be able to get a really good deal. But I’d rather convert those shops them myself than let someone else do it.
How much pressure have you been under to reduce prices and discount?
We haven’t been discounting much at all, and the premium side of the product is selling well. The biggest selling brand is The North Face which is around £200 for a jacket. We’re also talking to them about doing exclusive ranges - we make up around 50% of their business in the UK, so it makes sense. This is a market where people will buy if the product is properly presented.
How will you get shoppers spending in 2009?
We’re looking to identify new, up and coming brands as well, the smaller brands that will be the next The North Face or whoever. Own label is around 50% in total, 20% in Blacks and 80% in Millets. We’ve cut back a bit to focus on some of the best performing ones, such as Peter Storm or our surfwear brand ALS, which is outselling Animal in our Blacks stores at the moment.