Republic chief executive Tim Whitworth tells Drapers how the retailer outperformed the market over Christmas.
Republic’s like-for-like sales were up an impressive 6.8% for the 10 weeks ended January 4 - a sparkling performance. What do you put this down to?
We’ve got the best brands, at the best prices and the fashion is just right. We are targeting the 15-to-25-year old age group which has been less affected by the middle-market crunch. I think that age range is still expressing caution when spending, but when the offer is right they are buying, when it isn’t right, you really notice it.
Your competitors Envy and USC went into administration over the Christmas period, only to be bought back by their owners John Kinnaird and Sir Tom Hunter. What does that mean for the market?
Fundamentally the businesses have not changed, and as far as USC is concerned we are still going through that period of having them as competitors. We will only know the full extent of what phoenix rises from the ashes and how much we will be fighting for in the coming weeks.
Margin was level over the Christmas period, what do you attribute your this to?
Clear focus on product and backing the winners product wise ensured that markdown wasn’t seen and that comes down to the focus from the buying and merchandising team. We maintained our margins over Christmas.
Will you be reining in expansion in 2009, or do you see opportunities for expansion in this market?
For us there is a sales opportunity in the UK of £600m, which we are a third of the way there [to reaching]. We want to have 200 stores (Republic has 93 stores currently) eventually and that is without changing the [Republic] format at all. We have been seeing 20% growth per annum over the past few years and that could grow at a greater rate given the opportunities out there at the moment. I’d like to see 20% growth this year and eight to 10 new store openings.
What about overseas opportunities?
Foreign markets are not on the cards but we do get approached from amazing partners. It’s a matter of prioritising the opportunities and there is still a huge opportunity to go after in the UK. The Republic of Ireland will be the next step but we are not there yet. Overseas is not there for the near term but may fall into place. Either way it’s not something we’re necessarily pushing.
Your web offer is just over a year old, how did online perform for you over the Christmas period?
It’s been a fantastic online year for us. The website launched in September 2007 and we are trying really hard to bring all elements of our experience online. It will be another record year next year and we peaked at half a million customers over the week before last.
What are your expectations for 2009? What will be the biggest challenges facing the young fashion market?
I don’t think we are at the eye of the storm yet. Currency issues are going to be very interesting, and this year will be about supply and demand. If currency continues the slide the demand will be lower. It’s about managing your supply chain accordingly. We have more or less secured our spring 09 commitment so we would only see the affect [of currency fluctuation] in autumn.
It comes down to what the customer demands and that is a garment at a price and we focus on that. It is secondary what that cost will be but we can assure suppliers that they’ll get paid promptly and get greater volumes from us next year. We’ve got a compelling offer and fantastic relationship with our supply base.
Your own brand business is successful what are the plans to develop that?
We are a 50% own-label and 50% branded business. Own label is a hugely successful business and we retail those brands within our own stores so there is an opportunity for those to stand on their own on the high street or in their own formats. In our sector, brands and Christmas really go together and, more than ever, our own brands have been asked for by customers. But we believe the balance [between external and own brand] is about right.
Click here to read Republic’s Christmas trading statement.