Shirtmaker TM Lewin made a killing with its multi-buy offers, and although the ploy has since been widely imitated its chief executive is convinced the business still has the edge on its rivals
Walking around shirtmaker TM Lewin’s head office in a modern block in Clerkenwell, central London, with the company’s energetic chief executive Geoff Quinn, it quickly becomes clear that he knows everyone by name.
Despite running a 68-store, eight-concession operation with 725 staff, Quinn says that familiarity comes naturally to him because he feels like a small-business entrepreneur running a couple of shops.
Quinn left school in Ramsgate, Kent, aged 16 with one O-level in pottery, which he says he only achieved because his pottery teacher also taught him PE, a subject he was good at. Quinn now admits that he is probably slightly dyslexic. “I’ve never been diagnosed, but I do get letters jumbled up even now when I’m writing,” he says.
When he was 18, Quinn went to work for Philip Start, founder of men’s contemporary outfitter Woodhouse and now owner of east London designer retailer Start. Quinn spent six months at Woodhouse as a sales assistant before getting a job at shirtmaker Turnbull & Asser. He made himself so useful there that by the age of 20 he was in Toronto, Canada, opening a store for the business. He says: “I’m a problem solver. I see things that need fixing and I fix them. People noticed that and I suppose it’s how I got on.”
From Canada, Quinn joined forces with fellow salesman Chris McKenna to launch Turnbull & Asser to the US for wholesale. When McKenna left Turnbull & Asser to buy TM Lewin, then a one-store business in Jermyn Street in central London, with sales of just £189,000 and with more than 50% of that revenue coming from the sale of regimental ties, buttons and blazer badges, Quinn was keen to follow.
He says: “People at Turnbull & Asser thought I was mad to go to such a small outfit. But I believed in Chris and I loved the fact it was a small business just starting out.”
In 1989, TM Lewin opened its second store, in Lime Street in the City of London, but tragically later that year McKenna died in a car accident and just four years later his brother, who had taken over running the business, died of a heart attack, leaving Quinn to take on the reins.
Quinn says the responsibility he felt to the widows of his fellow directors and the need to follow through on his friends’ ambitions influenced his career and outlook on life. He says: “They were both in their mid 40s when they died, which is not far off my age now. It made me intent on getting on with things.”
A third TM Lewin store opened in 1991, and the fourth followed in 1993, but the market had not stood still during this time, and throughout the 1990s the retailer faced strong competition from other shirtmakers such as Thomas Pink. Quinn says: “Pink had a strong brand identity and great-looking shops. By 2000, I felt we were going backwards. In 1999 we had made £400,000 profit and in 2000 we made a £400,000 loss. I realised we had to change, so we introduced offers. We went through a series of things, but worked out that the best offer was the multi-buy.”
This promotional stance was cemented when the business opened its fifth store, an 850sq ft shop in Ludgate, central London, in 2001 with a half-price event. Quinn set a target for the first month of £100,000 sales. The store took £96,000 in the first two days and a further £645,0000 in the following five weeks.
After that, promotions became a key tenet of the TM Lewin business model and the company has not looked back since. Its core best-selling offer is four shirts for £100, and this kind of bundle deal has been so successful that it has been adopted by most of its rivals.
The business sold 1.8 million shirts last year and Quinn attributes part of that success to creating constant change and choice in terms of designs for customers. He says: “The difference between us and a lot of other shirtmakers is that we design all our product and oversee all of its construction.”
Picking up a pink micro-check shirt, he adds: “This shirt for instance will not hit all sizes in all stores. The key for us is to give the customer the base colour choice in all stores, because that’s how we merchandise at retail. We introduce 100 new shirts every month to the stores, which means a best-selling design may only last two-and-a-half weeks in stores.”
The reason the retailer developed this ever-changing choice was because of the way it expanded in London, a relatively small geographic area.
“We worked with the same Italian mills as our competitors and we were all ending up with the same patterns, so we bought the CAD machine that the mills would use and looked to develop our own patterns so we could differentiate the offer,” says Quinn.
Although the retailer closed down its own factory in the UK three years ago, and most of TM Lewin’s shirts are now sourced in China, the business still thinks like a vertical operator.
“We know the cost of everything in a shirt and we understand everything in the manufacturing process, from the length of the staple of the cotton needed to spin the fibre down to the design. We have people who spend a lot of their time in factories setting up new lines of production. It is the key thing you need to know to control your margins and be good negotiators. If you understand the process, and your suppliers know you know what they know, you can work together to get the best deal,” says Quinn.
The business was self-financed until 2006 when it went through a £50 million management buyout. Quinn says: “By then we had 31 stores. I realised that to grow the business to the next level we had to professionalise it. Prior to the deal we didn’t have a finance director or any systems in place as such.” Mike Trotman, formerly at Hobbs, joined TM Lewin at this time as finance director.
The business has six House of Fraser concessions and last year opened 12 stores. Quinn owns a 31% stake, the Royal Bank of Scotland has 17% and the remainder is held by the rest of the management team. Quinn says the business’s level of debt to profitability is relatively low, which he thinks will stand it in good stead to weather the recession.
One competitor questions that optimism. “TM Lewin has had a great run. Its strength is in strong local marketing and aggressive promotion. But how effective that will continue to be now the high street is doing it remains to be seen. The product works well in the confines of London and its suburbs, but I’m not sure how well such core product will fare on a broader stage,” he says.
Quinn maintains that TM Lewin is the most profitable specialist shirtmaker among its competitors and refuses to be negative. “I try not to subscribe to the pessimism around business circumstances at the moment. We have to adapt to them and look for the opportunity in everything we are doing. We had a great year in 2008/09 which closes at the end of March. We will be 21% ahead in sales terms. You just have to keep looking forward. There are always things you can do to improve your business to give you the edge on the competition.”
Who is your business icon?
Designer Sir Paul Smith. It is the attention to detail that he applies to everything in his world
that is so impressive. It is something that everyone in the clothing business can learn from. I would like to think that we apply the same principles to our business.
What is the best-selling product you have ever worked on?
It hasn’t changed since 1983 when I first started in the business. The Prince of Wales-collared shirt is still our bestseller. Last year we sold 1.2 million men’s shirts. The Prince of Wales would have made up around 900,000 of that total. It’s a big lesson to learn that we are not in the fashion market and we do not have to change everything season on season.
What has been your proudest achievement?
My three children. They are all adults now, aged 23, 21 and 17. I am just enormously proud of all three of them.
Which is your favourite retailer?
There is a place in Lewes in East Sussex that I have to visit every time I go there. I can’t remember its name, but it is full of knick-knacks. I suppose that reveals a bit of a shopping obsession of mine, which is that I can’t resist delving around in a junk shop. I used to source all sorts of curios to use as props for the shop windows. We have a different window style now and I don’t need to, but I still rarely walk by one of those kind of stores.
What would be your dream job (apart from your current position)?
I wanted to be a policeman, but I realised fairly soon into my school years that I would never be one because I can’t spell for toffee and nobody would understand my reports. My dream job would be to write fiction. I love reading real potboilers by authors like John Grisham.