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Making a splash: how Claret Showroom spots opportunities

Claire Spencer-Churchill and Alexandra Lyles, Claret Showroom

The fast-moving founders of Drapers Award-winning agency Claret Showroom are preparing for another year of stellar growth. 

When Drapers meets Claret Showroom founders Claire Spencer-Churchill and Alexandra Lyles, at their headquarters in Shepherd’s Bush, west London, they are remarkably fresh-faced considering they have just returned to London the previous night, after running their second premium resortwear trade show, Splash, on 25 to 27 June in Paris.

It turned out to be more exhausting than they expected. Just weeks before the event, the police gave notice that the show had to be cancelled: city officials wanted to host an event as part of Paris’s Olympic 2024 bid on the banks of the Seine where the venue’s purpose-built tent had been erected.

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The pair had to renegotiate fast, but Splash went ahead, with teams from “every leading department store” from Europe, the Middle East, and the US’s Barneys and Neiman Marcus browsing the show’s 90 brands, which included returning labels Heidi Klein and Lazul, and new additions Jets and Milly.

Not to mention a high-profile visitor dropping in from the neighbouring event: “We heard [France’s first lady] Brigitte Macron came to check out Splash,” claims Lyles.

Splash was born of a seized opportunity. Last spring, the duo received numerous calls from brands requesting space at Claret’s wholesale showroom in Paris, after lingerie and swimwear trade show Mode City was forced to move to make way for the UEFA Euro 2016 football tournament. On short notice, Claret Showroom launched Splash.

“Buyers have got to do so much hopscotching around Paris, and for them to be able to come to one location and see 40 brands was something that was needed,” says Spencer-Churchill. “We saw an opportunity, and we thought we’d better jump on it, or somebody else would.”

Opportunity calls

As entrepreneurs without fashion backgrounds, the friends formed Claret as the product of another gap in the market.

They met in the sixth form at Uppingham College, near Corby in the Midlands, before parting ways for university – Spencer-Churchill to Newcastle to study product design, and Lyles to Bristol to study Italian.

For Spencer-Churchill, the move into fashion came after a placement at Paul Smith’s furniture department. A vacancy came up on the women’s wholesale team in 2003, which she “jumped on”.

Meanwhile, Lyles was working at Goodley PR – now known as Goodley Bullen –  where she spotted that clients such as Australian designer Alice McCall were looking for UK wholesale stockists.

Spencer-Churchill joined Lyles at Goodley in 2004 and the pair hatched plans to start their own showroom, which opened in January 2006 for the autumn of that year.

For 18 months they worked out of Spencer-Churchill’s childhood bedroom in west London, while Lyles’ parents’ address was the “warehouse”. In addition to Alice McCall, they sold fellow Autralian brands Shakuhachi and Ginger & Smart.

The duo remain awed by their fearlessness at the beginning.

“When you’re 26 years old and don’t have a family, mortgage or any responsibility, the idea you might only make £500 a month is not so scary,” remarks Spencer-Churchill. “That was the real reason why we were able to build it over a few years and get it established early on. But we’ve both got families now – Alex is about to have her third child – so there’s no way we would take on that risk now.”

Shifting to a distributor model

Having started out as a sales agency for a growing portfolio of Australian brands, including Zimmermann and Mara Hoffman, it soon became apparent that the business model had to change.

“We worked out the key to success was the customer service back to the retailers and that customer service, when dealing with a 12-hour time difference, is quite difficult because you’re always waiting for answers,” says Spencer-Churchill.

“Within two years [of starting Claret] we gradually moved our model from agency into a distributor, which meant that we had to expand everything. With an agency you get collections, write the orders and send them back to the brand and they do everything else. Whereas we now do everything, and even get involved in the range planning.”

We now do everything, and even get involved in the range planning

British knitwear designer Madeleine Thompson, whose eponymous label has been represented by Claret since it was founded in 2007, praises this approach.

“They balance guiding and supplying with leading me as a designer and creative,” she says. “They provide structure and have been instrumental in how our business has developed.”

“They’re very sensible and straightforward when it comes to giving strategic advice on collections. They know what works and are good at cutting out everything that doesn’t matter.

“It’s like a parental relationship: their reaction is always so important, and you never want to let them down.”

Turning point

The pivotal moment came in 2010, when or Claret flew to Sydney Fashion Week to meet with new brands. From there, the business “snowballed into a different machine”.

Spencer-Churchill recalls: “In the beginning it was very UK-focused. International growth only really started once we started getting bigger brands such as Zimmermann, Mara Hoffman and Camilla – ones that had existing European stockists – by which point we were all set up in an office and knew vaguely what we were doing.”

Jordana Sexton, brand and sales director at Australian label Bec & Bridge, has worked with the team for four seasons: “We visited many showrooms and distributors over the years but never felt any were quite right for the brand until we came across Claret,” she says. “As an agency they really take brands under their wing.”

Chantelle McGunnigle, sales manager at US resortwear brand Pitusa, says Claret has increased its UK sales by 200% since it began working together three years ago: “It’s hard to find people as genuine and hardworking – they aren’t just looking out for themselves.”

Claret Showroom was named Fashion Distributor of the Year at the Drapers Independents Awards in 2016 for its “clear niche, impressive financials and an excellent reputation”, while the launch of Splash showed “real innovation”.

Fashion agency or distributor of the year   claret showroom

The pair report that they are approached by more than 10 labels per week to join their roster of 15 brands, which for spring 18 includes Varley. However, they are wary of over-expanding: each sales manager in the 16-strong team look after no more than three brands.

Retailer bankruptcies are another risk.

“This rarely happens any more, as we’re so careful with our cash flow and making sure orders will be paid for, but when we were younger and more naïve there was a store in Newcastle that went bust and owed one of our brands £20,000,” recalls Spencer-Churchill. “We really felt it, even if it wasn’t us: we put that order through and it really hurt that brand. Moments like that make you realise you have to work with the right people.”

Rapid growth

Claret’s Shepherd’s Bush showrooms now span 5,000 sq ft and 4,000 sq ft at its seasonal pop-up in Paris. Turnover for the year ending January 2017 reached £8m, and is expected to rise to £13m-£14m this year. The pair remain tight-lipped on profits, but predict double-digit growth.

Lyles attributes the “extreme and sudden” increase to its expansion abroad and careful budgeting: “We’ve been more cautious on our outgoings. It’s gone where it’s needed to: on great staff.”

The strategy seems to work: only two people have left Claret since it began 11 years ago.

Following demand from its brands for a US presence, Claret Showroom is expanding with a permanent office in Manhattan in February, which will be staffed by two full-time salespeople.

Despite Claret’s acceleration, it has not been completely insulated from the EU referendum vote. Spencer-Churchill says the business has since hedged itself correctly, but it felt the impact of currency fluctuations “badly” in November.

“We did not see Brexit coming,” comments Lyles. “For spring 17 we had to increase our prices according to the inconsistent exchange rates. [And] we had to spend a lot of time explaining why.”

Spencer-Churchill adds that they will be watching developments closely, as around 30% of the business is based in the UK, and the remainder in Europe: “It may be that we’ll have to move our warehousing to Europe, which we can do easily, but it’s just sad for the UK,” she shrugs dejectedly. “We were very pro-remain in this office.”

Seeing Claret through its ups and downs has evidently not taken a toll on the pair’s friendship, and they share a close rapport. Lyles describes Spencer-Churchill as “a do-er and an action person”, balanced by her “calmer and more rational” character.

“It sounds like we’re lying, like a married couple that say they never argue, but somehow we don’t,” says Lyles. “We know each other so well that I know what Claire isn’t going to like before something even becomes an issue, and vice versa.”

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Balancing motherhood with running Claret has also strengthened their relationship.

Spencer-Churchill, a mother of two, gestures towards Lyles’ baby bump: “This is the fifth baby between us, and we’ve managed to not be off at the same time. It’s been really lovely that we’ve been able to experience that together, because it changes everything when you suddenly throw a family into the mix.”

Even if they are not quite the risk-takers they were 11 years ago, the pair have not lost their penchant for exploring new territories. Their focus now is on pulling off Claret’s US launch and, although it is not in their three-year plan, a move “one day” into ecommerce or physical retail could be a venture that defines the next phase of the business. It seems that for these two, the world will never shrink.

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