Speculate to accumulate is not a phrase much heard these days.
The idea of long-term investment for long-term gains appears alien when so many deals and takeovers seem to have an inbuilt necessity for relatively short-term payback. But the term popped into my mind when considering two very different news stories we carry this week.
John Lewis’s huge commitment to invest even more in improved IT systems to satisfy customers’ desire for a seamless shopping experience runs concurrently with the latest stage of its seven-year overhaul of its Oxford Street flagship. When I started my career in 1980, and for many years thereafter, the John Lewis Partnership was famous (or notorious) for not telling anyone anything until it had been expressed to the partners through its weekly publication, The Gazette. This policy might still be in place, but for a decade or more John Lewis has been very good at sharing its strategy with the media.
Its seasonal press dinners, the latest of which I attended on Tuesday, are a fine example of how to handle journalists. Managing director Andy Street and his senior colleagues are on hand to tell it like it is - and it all makes pretty good upbeat copy these days.
It was not that long ago that “going online” was seen as a “low-cost” or “easy” option compared with running a conventional fashion store, but how reality has bitten in recent years. The news reported on Drapers-online.com that John Lewis’s investment in IT is being pushed from 18% of the total budget to 32% is a remarkable statement of intent from this omnichannel market leader and a reminder to any ecomm hopefuls that are playing catch-up just how expensive it is to achieve success.
Old-timers like me are pleased to see there is no skimping on bricks-and-mortar projects either. Two more floors are being remodelled on Oxford Street and anyone wishing to see what they might look like ought to drop in to one of John Lewis’s new Home stores. Very impressive.
Less impressive this week is the performance of the government, which has cut, once again, the modest grants it offers to fledgling fashion exporters via its Tradeshow Access Programme (TAP), which is managed by UK Trade & Investment. In our sector, the grant schemes are administered by trade bodies the UK Fashion & Textile Association and the British Footwear Association and they, along with associations from other sectors, have made a valiant but fruitless attempt to get the powers that be to change their mind.
Despite the obvious hypocrisy of an administration that spouts the line that we must export ourselves out of the downturn reducing the help it gives, what is really galling is that this affects the next quarter. So young British companies that may have been banking on the TAP assistance to get them to Pitti Uomo, Paris Fashion Week or Micam in spring 15 will now, presumably, be left high and dry.
While the grants themselves may appear small - probably less than £1,500 in most cases - I know from my short time running UKFT in 2010 that they make a huge difference to the ability of SME fashion firms to put themselves into export markets. Without this speculative investment, aspirant exporters will find it appreciably harder to accumulate new customers overseas. What a shame.
A final note on investing to prosper: there is still time to book your places at the Drapers Awards on November 20 and the Drapers Fashion Forum on November 27. You know you want to.