Iconic building, great location - the ingredients suggest success, yet Liberty’s recent performance has disappointed. But its new managing director says tourists can help him change all that.
It’s a struggle to hear Ed Burstell above the crashing plates and crying babies in Liberty’s tea room, but it’s apparent from his unflinching gaze and lengthy pauses - presumably to allow his words to sink in - that he is talking serious stuff.
“I don’t buy. I sell. I sell Liberty - to our suppliers, to our customers, to the world,” comes one polished soundbite over the din, ending a spiel about “fiscal responsibility”, the danger of buyers “believing their own hype” and what the iconic London department store’s new ownership by private equity firm BlueGem Capital Partners is likely to mean for the business.
Then he takes a forkful of carrot cake, rolls his eyes with pleasure, and hands me a spoon to dig in. “Twenty minutes on the treadmill, right there,” he says coquettishly, before collapsing on his press assistant with a hyena laugh.
Like Liberty, Burstell is a pleasing medley of contradictions. The softly spoken New Yorker joined the business from his home city’s luxury department store Bergdorf Goodman in 2008, initially as buying director.
In June he was promoted to managing director, shortly after Liberty’s sale to BlueGem, and at the same time as former chief executive Geoffroy de La Bourdonnaye stepped down. Burstell has retained the buying director’s brief at the same time as taking on responsibility for strategy, communications, the Liberty of London own brand, and - when creative consultant Yasmin Sewell left last month - the creative direction of the store.
He and new chief executive Marco Capello - one of BlueGem’s co-founders, to whom Burstell speaks several times a day - have their work cut out. Taking into account Liberty’s wholesale and fabric businesses, last year was the first in a decade that the company reported a positive EBITDA (£100,000). Close cost control and a “renaissance” of the store’s product mix and layout helped to dramatically narrow pre-tax losses, but they nonetheless stood at £4.5m in the 12 months to December 31.
Meanwhile, the Liberty of London brand opened and shuttered its first dedicated standalone store in Sloane Square within the space of a year, and EBITDA for the flagship Liberty store on Great Marlborough Street has yet to trouble positive territory. Burstell is confident it will do so by the end of the year. Even so, the business feels a long way off the sorts of numbers called for by private equity.
It’s hard to fathom why. Few if any London retailers can boast a building or location as outstanding as Liberty’s, nor a heritage or back catalogue as rich. It’s consistently cited as one of the most inspirational stores in London, and Burstell describes it as “one of the last great emporiums of its kind”. He’s right, though the accolade raises the spectre that independent department stores of this sort can no longer thrive.
On the up
But Burstell is having none of it. He puts Liberty’s poor past performance down to a tendency to put too much focus on one product category at a time and is adamant the store can make a good return without losing its upmarket, old world feel.
He and Capello have their hopes pinned on tourists. Just 30% of Liberty’s turnover comes from non-London residents, but Burstell plans to capitalise on the store’s iconic status and West End location to swell this figure: “We are a mock-Tudor block in the middle of London. Our back entrance backs onto Carnaby Street. I don’t have to say anything else in terms of a business case.”
In product terms, that means stocking all the usual London paraphernalia associated with tourists - albeit done in a Liberty way. Loyalists may balk at the idea but Burstell insists the merchandise will be carefully placed and “quirky”: “You want a London mug? You can have one, with our version of a London map on there. There will also be a lot more print on everything.”
He also plans a fresh stab at the Liberty of London brand, but wants to develop it more slowly than before, initially focusing on just a few product categories, like shirts, paper and scarves, that particularly lend themselves to Liberty prints. “We did too much too fast [the first time] but department store own brands absolutely can work,” he says. There are no plans to resurrect the Liberty of London standalone however.
Other plans include changes to the spacing of the store, “fine tuning” the 2009 “renaissance” which saw the fashion floors reconfigured, and to add new brands for spring 11. Burstell is most looking forward to the arrival of Erdem, Felicity Brown, Mother of Pearl, Draw In Light, Geannine Pollazzon and Genuine Article.
He will resist change to Liberty’s pricing strategy, however, despite criticism that its offer is so premium it is out of reach. “We are far less expensive than a lot of our competitors,” Burstell says. Then he whispers conspiratorially “yellow bag, yellow bag” seemingly in reference to rival Selfridges, before releasing another hyena laugh.
He clearly enjoys the cut and thrust of competing against other retailers, and of taking the helm of such a quintessentially British store: “People ask me about it and I say ‘it’s Ed’s great British adventure. It’s an absolute blast.”
London talent… London is still the only city in the world where creativity comes before commerce. But people in the UK are also much more entrepreneurial at an earlier age.
Ones to watch at London Fashion Week… I want to see how people have evolved - Mark Fast, Mary Katrantzou and the Peter Pilotto boys [designers Peter Pilotto and Christopher De Vos]. And I’ll be watching JW Anderson. He’s doing menswear in Liberty fabric.
Supplying Liberty...Know what Liberty does. If you show up with a spoon and I don’t stock table top goods, then it can be the best spoon in the world but it won’t get you anywhere.
Financial awareness…What does it really take to run a business, to manufacture your product, to get that product to market? If you think you’ll survive just because you have a great idea, then God, it’s going to be tough.
Being private-equity owned… One of the advantages is a commitment to spend at a level that means we can action some of the things we’ve been talking about for years.
Being culturally aware… Buyers [who don’t engage in wider culture] start to believe their own hype. And when you start to believe your own hype, you live in one world, which is not driven by the customer or the product. It’s driven by you.
Living in London…It started out that I was moving here for the job. Now it’s been two years. I’m missing New York much less than I expected.
2010 Managing director, Liberty
2008 Buying director, Liberty
2004 Senior vice president, Bergdorf Goodman
1998 General manager, Henri Bendel
1994 Divisional merchandise manager, Henri Bendel