The buying director of Scottish mini-chain Xile believes retailers should back brands through thick and thin, and the young fashion retailer’s success provides strong evidence to back him up
Xile is unveiling its latest store in Glasgow but managing director Pat O’Flaherty is on holiday in Marbella, keeping a low profile, leaving buying director David Weeks and operations director Paul Mullen to lead the schmoozing with suppliers at the well-attended opening party.
Fortunately the Xile business and the team behind it are held in high esteem by the branded young fashion market and the store launch has pulled in key faces from brands such as Diesel, Replay and Luke. “All of this flash party stuff isn’t for him,” the boss of one of the aforementioned brands says of O’Flaherty. “Also, that’s called trusting your staff.”
Indeed, when Weeks was promoted to buying director in 2009 he, together with Mullen, took a 10% stake in the business. While Weeks, O’Flaherty and Mullen each bring a different skill to the Xile table, they share in common great banter and a passion for the sector. They also place big, bold orders - making them an essential addition to any young fashion brand’s stockist base.
Xile was founded in 1984 and has six stores, each with its own specialism. One of the two Xile stores in Edinburgh’s Princes Mall has a directional menswear offer, with brands such as PRPS and Junk de Luxe, while the other sells men’s and women’s casualwear, including Lyle & Scott and Ugg Australia.
At Ocean Terminal in Leith in Edinburgh there is also an Xile women’s store selling the likes of Fornarina and Miss Sixty and a Xile denim store where G-Star and Diesel make up the bulk of sales. In Southbridge, Edinburgh, there is an Xile Sale store, while the new Glasgow store, the subject of the launch party, sells denim, sportswear and young fashion.
Xile has not operated a multi-brand store under the Xile fascia in Glasgow for more than a decade. Its sole Xile Glasgow store closed in the 1980s following a major theft by staff. However, recent strong trading across its other stores has prompted the retailer to revisit the city.
After 11 weeks of trading at the 2,400 sq ft unit in the city’s Enoch Centre, Weeks has already noticed that Glaswegians prefer highly commercial product with overt branding, rather than fashion-led or directional product and, as Weeks puts it, they “would rather spend their last money on looking good than on rent or food”.
With 62% of the Scottish population living in the Strathclyde area, Glasgow is a lucrative location for any branded or young fashion retailer, as neighbours USC and All Saints will testify.
The Xile team is also a key franchise partner for denim brand G-Star. Its Glasgow G-Star store was one of the best-performing G-Star franchises in the world last Christmas. Xile also operates a franchise store for denim brand Replay on Edinburgh’s Multrees Walk, which is again making money, says Weeks: “Replay has been blowing hot and cold for years but it has nailed it this season with its jeans and tees.”
Weeks buys a range of core young fashion brands for the Xile business. Denim staples are represented by G-Star, Diesel and Replay, which jostle with bright T-shirts by Luke, windcheaters from Adidas Originals and heritage product by Barbour.
The retailer also backs cool, smaller brands such as T-shirt label Passarella Death Squad. Weeks tells Drapers that he has been able to continue to take risks on product and remain innovative this year because the recession did not bite Xile as hard as he had anticipated.
The strength of Xile’s ecommerce business, where year-on-year sales were up 60%, offset a 10% dip in sales from its bricks-and-mortar stores.
Weeks’ buying approach hinges on gut instinct and a fastidious knowledge of the numbers. Maths was his favourite subject at school, he says. Before each buying season he sets a budgetary framework based on each brand’s standard pre-Sale sell-through rate the season before, and then ups it by 10% to 20%. However, he will only decide his exact spend with each brand once he has seen the product.
He says: “I’m cutting my forward-order budget for spring 11 by between 20% and 30% compared with last year and keeping the money back for in-season best-sellers, which I’ll be fast to react on. I’m also going to keep some cash back for Sale buys [overstock] from brands to achieve extra margin.”
Keeping the faith
Although the strength of a collection will influence a brand’s share of the buying pot, Weeks is known in the industry for sticking with brands through good and bad times. His reluctance to drop under-performing brands is a result of his core mantra for success- which is to have great business relationships.
“I can’t get my head around all the retailers that dropped Diesel,” he says, referring to seasons’ past when the brand fell out of favour. “It’s the biggest denim brand in the world. All brands have bad seasons. You just buy [from the range] accordingly.
“It’s Luke and Lyle & Scott that are getting the bulk of my money now. One of the best bits of the job is growing brands over a period of time and having faith in them. Too many people drop brands too soon.”
At the opening of the Glasgow store, Simon Poole, managing director of Luke, tells Drapers Weeks “puts his money where mouth is” - and it’s a phrase Weeks also uses to sum up his approach. “I know how to buy a collection and how to retail it. My advice is that retailers should go back to basics. I put my money where my mouth is,” he says.
Xile is Luke’s biggest account in Scotland and Weeks is hugely encouraged by Poole’s strategy to focus on indies rather than multiples: “I’m a strong believer that a good brand can grow just as fast with indies as it can with any multiple, [and that is a good way to go about it] if the brand wants to achieve longevity.”
Nine years ago, Xile placed an £8,000 order with Luke. For autumn 10 it has upped its order value to £300,000 with the brand. Because the relationship between the supplier and retailer has been two-way, the retailer now has the opportunity to do special SMUs (special make-ups) with the brand. Similarly, premium denim brand PRPS supplies Xile with an exclusive ‘PRPS for Xile’ jeans style. Weeks’ strong relationships with branded suppliers - which he has worked so hard to forge - are likely to set him in better stead than some of his competitors over the coming months.
However, he is concerned about trade in 2011, with the VAT rate set to increase to 20% in January and public sector cuts due to be outlined by the Government in October. The market is going to get tougher, with the price of cotton and air freight also climbing.
“I’m already looking at cutting out any January deliveries from my suppliers,” he says. “I’ll still order, but I want them to deliver in February. VAT will hit and I don’t want my spring and summer stock to overlap.
“But even before that, it’s going to be a ruthless Christmas. It’s going to be survival of the fittest.”
2009 David Weeks is appointed buying director
2005 Xile opens its first G-Star franchise in Edinburgh
1994 Xile begins selling womenswear
1989 First Xile store opens in Edinburgh 1984 Pat O’Flaherty opens Americana specialist store The Trading Post in Edinburgh selling Levi’s, Wrangler and Lee Jeans denim
What clothing collection has most impressed you during your career?
My favourite range to date has to be the autumn 10 range from Luke. It ticked all of the boxes - great denim, fit and washings. The outerwear came in great colours and the pricing was good.
What brands do you wear?
I’m a jeans and T-shirt kind of guy, who likes cool sneakers. When it comes to jeans there’s only one choice for me and that’s Diesel. For favourite T-shirts, I go to Pretty Green and Passarella Death Squad for fit and quality. On sneakers I’m split between 80% Adidas and 20% Nike. I only wear brands that we stock in Xile, unless I see a pair of sneakers that I must have.
What is your favourite part of the job?
Building solid working relationships with the brands and, of course, sourcing new brands that will make my company money. [I also enjoy] meeting some great retailers on route, like Carl [Peddie] and Jez Bailey from Wolverhampton-based indie Diffusion. They have stores similar to Xile and, of course, they are G-Star franchisees like us.
What do you do in your spare time?
I like to take in the odd movie or two, and I love watching the footie. I also like going out and trying new restaurants. There have been so many new ones opening in Edinburgh recently. My favourites in London are J Sheekey and Fifteen. And I like going to the gym. I should go more, though. A lot more.
Weeks’ hot brands
One True Saxon
“Finally it has got the pricing right and it is looking good. We’ve stocked it for 10 years and the sell-through hasn’t always been the best. But I’ve had faith in the product and this season it has proved me right.”
“It’s a fantastic brand and we’re hoping to do a store signing with Liam Gallagher this year. I put down a £20,000 first order and, if it stays true to what it’s doing, it’s going to be massive. It attracts all ages from an 18-year-old to the mid-40s age group and it has a good following.”
“Sportswear brand Umbro is also on my list because of the collaborations it’s doing following the huge success it had with the World Cup winners’ collection of boxed football tops.”
“It’s nice and easy sportswear with great margins. Hummel footwear has a 2.5 mark-up. The clothing offers a 2.5 to 3 mark-up and overall it has very limited distribution.”