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Moral fibres: People Tree chief plans for sustainable growth

Sustainable brand People Tree won Drapers’ CSR Award in 2017. Managing director Melanie Traub explains the delicate balancing act between being ethical and being fashion forward

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If there is one thing retail merchandising stalwart Melanie Traub has set out to prove, it is that a fashion label can be both commercial and sustainable.

Traub, whose career spans 38 years at retailers including Marks & Spencer, Thomas Pink and SecretSales, became managing director at fair trade clothing pioneer People Tree in February 2017. She originally joined as a non-executive director in October 2016, and it quickly became apparent to her that the business needed a more commercial mindset.

“What drew me to People Tree is that it has a wonderful story. I want us to be able to tell that story, but to also show that clothes don’t have to be frumpy and old fashioned to be fair trade and sustainable,” she tells Drapers at the label’s modest head office in London’s King’s Cross, to which it moved in December.

“The business went through some difficulties and there needed to be some fundamental changes. To take it to that next step, the business needs to be seen as a commercial business, not just a sustainable business.”

Fundamentally, its product was not matching up with customer expectations. The starting point for Traub, who worked at M&S when it was run to exacting standards set by then chiefs Lord Rayner and Sir Richard Greenbury, was to research its core customer base.

“Our customer was more affluent than we first thought, and we also found we had younger customers as well,” Traub remarks. “It has steered us on a good course.”

The business is now partway through Traub’s three-year turnaround strategy, focusing on making product styles more contemporary, replenishing stock and “putting in traditional merchandising skills”.

In its most recent results filed with Companies House, for the year to 31 December 2016, turnover in the UK and Europe inched up by 1.4% to £2.87m, and an operating loss of £293,077 was a 2.8% improvement on its loss in 2015.

It is showing hints of further recovery. Traub indicates that EBITDA was in positive territory in the year to December 2017, while gross profit has surged by more than 30%.

Its losses have narrowed “dramatically” after it introduced a “more modern collection”.Overall sales have also grown – although Traub does not give figures – and wholesale by is up 14%.

Traub estimates that 50% of sales are wholesale, with the other half from its direct-to-consumer online offering. Wholesale sales are expected to grow faster alongside a substantial increase in order volumes from key accounts, although average order value from online customers is also on the rise.

The brand is currently stocked at around 300 outlets in the UK and Europe, including Asos, John Lewis, 240 independent retailers, and a pop-up concession at House of Fraser in Manchester. Retail prices range from £8 for a copper bangle to around £120 for heavy knitwear.

I’d love for us to do at least a pop-up. But it’s got to be when it’s right for the business

“A lot of our small independent [stockists] are true eco-stores. But the message we’ve got is for everybody. The challenge for us now is to get into the mainstream as well,” says Traub.

“We can help some of the big retailers in growing [their ethical fashion ranges], because we have a wholesale business. Sometimes they underestimate how difficult [ethical fashion] is to do. We have already set up our supply chain, [so] we can grow within these retailers and be the brand of choice for that.”

The UK and Europe business does not operate retail. Traub proclaims that going into bricks and mortar is “my dream”: “I’d love for us to do at least a pop-up,” she admits. “But it’s got to be when it’s right for the business, not as a vanity project. We might look at one for Q4 this year, but probably not before then – ideally in London or New York.”

Global eco-system 

Geographically, the brand’s focus centres around expansion in the US and Canadian markets, where the “eco-story” has become particularly important.

The brand operates a separate subsidiary in Japan, where the label was originally founded by entrepreneur Safia Minney in 1991 before it launched in the UK in 2001. The Japanese business, which has both a standalone and a shop-in-shop with departments store Tobu Ikebukuro in Tokyo, has a country-specific collection that targets a “more traditional” and older customer. Traub aims to bring the two collections “closer together” for a more consistent brand message.

“In the UK we’re more fashionable and younger. We won’t merge them, as they are too different – they have different designers and buying teams out there. But I think there are things that will appeal to both markets,” says Traub.

People Tree is trialling the Japanese division’s babywear products on its website, which ships to the UK, US, mainland Europe, Canada, Australia and New Zealand, to gauge consumer interest. Another new category is underwear, which is being piloted as a wholesale range for autumn 18 after trialling online.

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The brand will also focus on increasing its wool products for the autumn seasons, although this does not come without challenges.

“One of the difficulties we have had is, because of the organic nature of the business, we were very limited with the fabrics we could use. Organic cotton is lovely but it is a very light fabric, so we were short of warmer product,” says Traub. “We only use non-mulesed wool [a practice that removes wool-bearing skin from around the rear of the sheep], but wool isn’t as well-traced as cotton – we had to find a way we could trace it.” The team has since found it: “If wool is grown in colder countries, it is not such a problem. But if it comes from a warm country, it is an issue for us.”

Although the brand has designed men’s T-shirts for Asos in the past, menswear is on the backburner. “I’d like to get womenswear [going really well] before going into menswear,” Traub explains.

“We’ve got so much potential. It’s not just about broadening the range, but about making it the most impressive and cohesive womenswear range before we go into different areas.”

New lines

Product-wise, Traub’s team has also branched out into less-conventional silhouettes such as wide-legged trousers. and brought in jumpsuits in autumn 17. This was aided by introducing sustainable fabric Tencel in its lines. It only uses one type of the textile, produced on a “closed-loop system”, as many alternatives rely heavily on water usage.

“We go to a lot of trouble to find a fabric that would drape nicely,” says Traub. “Cotton doesn’t always have the drape you need for a fashion silhouette. It’s those sorts of fabric developments, as well as upping the design, that has really made a difference to the business.”

She adds: “Another thing we have changed is that we didn’t ever repeat, because we always said we’re slow fashion. And I challenged the team [on this], saying that we have to find a way of working with our producers to repeat in season.”

Sarah Tridgell, co-founder at Falmouth independent Blink, started stocking People Tree when the shop launched in September.

She observes: “They seem to have turned a corner. A lot of the time, eco-fashion or things that put the environment first don’t quite hit the nail on the head style-wise, but People Tree is definitely moving towards mastering both.”

Kate Richards, which has stocked People Tree for five years at her London shop The Keep Boutique, agrees: “In recent seasons, the aesthetic has become more fashion forward, which has really appealed to my south London customer base.”

Ethical investment

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People Tree’s team in the UK comprises 20 staff, including designers. Because its producers do not own computer-aided design machinery, pattern-cutting is done in house before paper templates are sent to them. Orders are fulfilled through third-party logistics partner Clipper.

The brand supports around 4,500 farmers, producers and artisans through 34 fair trade producer groups, in 13 countries including key regions in India, Nepal, Kenya and Bangladesh.

One of People Tree’s unique selling points is its numerous accreditations. Among these, Traub proudly points out that it is the only fashion label certified by the World Fair Trade Organization (WFTO).

“I was quite shocked, coming into the business, at just how much work there is involved in getting certified,” she admits. “You have to be audited, we have to embed the 10 principles of fair trade in all our employees […] and it has to be renewed every [couple of] years.

“It comes with a cost, as with all the [other organisations]. And that is why we will never be cheap. But I hope it gives confidence to our customers.” Retail prices at the brand vary from £8 for a copper bangle to around £120 for heavy knitwear.

This aligns with Traub’s definition of ethical fashion. “It’s not just about saying it’s organic. It’s about it being certified organic, starting from the farmer, who isn’t using pesticides – which is better for their health – and that they’re paid a fair fee,” she says. “We follow it all the way through to every part of the chain, whether it’s the farmer or the person who’s embroidering or handknitting in their own home.”

Several prominent high street players have made a push on sustainable fashion in recent months, including H&M and Asos. Kantar retail senior fashion analyst Anusha Couttigane observes that these align with shifting consumer expectations: “We’re living in an age of convenience. Brands like People Tree are niche and make it hard for consumers to discover them; what they want is to know they are shopping sustainably by default, rather than seeking out brands that will [let them do] that.

“But where brands like People Tree benefit is that it has a USP – it is still one of a minority specialising in ethical value. Until a company like H&M can guarantee it is 100% sustainable, there will always be an opportunity for these brands. Those were the principles People Tree was founded with – it will always be able to safeguard those manufacturing principles, there is transparency and no question marks over whether ethical principles are just a marketing ploy or its raison d’être.”

The rise in high street competition certainly does not faze Traub. “Very few, if any, are certified. It doesn’t scare me. But I think it’s a positive thing. The more we can do to promote sustainable, organic fashion, [the better],” she says.

Its stance cemented its CSR Award win at the Drapers Awards 2017 in November. One of the judges on the panel, who is a top-level executive at a well-known retailer, recalls: “We felt the other entrants for the award were admirable, but in some cases just box-ticking to be politically correct.”

In Traub’s varied career in retail, People Tree is one of the smallest businesses she has worked for, but “one that has got a lot of potential”: “It’s not very often someone like myself can come into a business and really feel the potential. And we’re beginning to harness it. It’s a wonderful opportunity.”

People Tree might profess to be a slow fashion brand, but under Traub’s watch, it does not appear to be slowing down any time soon.

 

Melanie Traub’s CV

1980 Trained at Hudson Bay Co in Canada, under its buyers training programme.

1982 Took on a trainee merchandising role at Marks & Spencer, based in London’s Baker Street. Worked there for 10 years as a departmental merchandiser, under then-M&S chiefs Lord Rayner and Sir Richard Greenbury.

1992 Ran a consultancy to help small businesses. One major client was a large Chinese shirt manufacturer, so Traub handled its UK operations and sold into the likes of M&S and Next. She ran the office until it set up its own UK office.

1997 Joined womenswear retailer Kookaï, which since wound down in the UK in 2013, initially for three months to set up merchandising systems before becoming its merchandising director in a permanent role. Spent five years there as it embarked on a store expansion drive.

2002 Joined heritage luxury jewellery brand Asprey & Garrard as head of merchandising.

“I had never done the luxury market before. It was fascinating; I was lucky to learn about jewellery and gemmology from some of the best in the world. But for me, the pace was slower than I was used to, having come from fast fashion,” muses Traub.

2003 Hired by Thomas Pink as its global buying, merchandising and distribution director after being headhunted, where she worked for nine years.

2012 Appointed as chief commercial officer at etailer SecretSales.

“I’d never done pureplay before then – I felt it was [an experience] I was missing,” recalls Traub. “It was a different business, and at its time was still in its infancy – that was a really interesting three years.”

2017 Became managing director at People Tree in February that year, after originally joining as a non-executive director. Kickstarted three-year turnaround strategy.

“It became clear that the business was ready to have a commercial MD, as well as somebody that understands the ethical and sustainable business,” Traub says. 

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