In its 50th year, mod menswear brand Merc is having a moment as Brexit turns the global spotlight on nostalgic London. UK head Andy Tompsett explains.
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“We’re having a bit of a debate internally. Everyone around the world is talking about the UK and London at the moment, so we think we should reintroduce the word ‘London’ to the brand name Merc.
“Traditionally we were called Merc London, but we dropped the ‘London’ in 2010. We need to add it back in again for spring 18. That’s where we are from, that’s where we’ve grown up and London sells. We need to make positive news about what’s going on and make the most of it.”
Andy Tompsett, head of UK at mod menswear brand Merc is of course referring to the UK’s impending exit from the European Union. Despite the uncertainty surrounding Brexit, he is optimistic about the opportunities it brings for the brand, which is celebrating its 50th anniversary this year by refocusing on its heritage roots.
“We don’t know what Brexit means yet but the whole world is talking about the UK and London, so we have the biggest opportunity ever to let people buy something designed in Britain. We’re proud of who we are and we want to capitalise on that globally,” he tells Drapers at the brand’s four-storey head office at 15 Hanover Street in central London. Merc is manufactured in India, China and Portugal, but it is looking into manufacturing small runs in the UK.
We want to lead the way online for British labels
“We used to make shoes in Northampton and east London, and I’d love to go back to doing some production here. When we looked at it before, it was uneconomical, but it is something we should look at again, given that import tariffs may be introduced.”
Since the drop in the value of sterling, the London-based label has seen an uptick in custom from international shoppers online – and this is an area it wants to grow in the coming years.
Merc autumn 2007
“We want to lead the way online for British labels,” says Tompsett. “That’s where our investment lies over the next five years.” Of Merc’s £3.1m annual turnover, 60% comes from overseas and this is growing substantially through international online marketplaces, he adds: “We’re working directly with Zalando, Amazon and La Redoute.
“It started in a small way a couple of years ago but we’re really stepping it up and it’s proving incredibly lucrative. We’re on Tmall through House of Fraser in China, but we’re looking at how we can grow it. We already have all the product images and info for our own website, so it is relatively simple and really works for us. Our growth in the coming years will come from marketplaces – particularly in China, South Korea and Asia more generally.”
Sales from merc.com and online stockists make up 30% of the total – the remainder comes from wholesale – but Tompsett sees these percentages flipping in 10 years’ time, to 70% of sales online. Wholesale prices for spring 18 start from £8 for T-shirts and go up to £75 for coats.
Big in Italy
Global marketplaces may be new to the brand, but international expansion has been part of Merc’s DNA over the last 30 years. It began selling across Europe through independent wholesale accounts in 1981, spearheaded by its growth in Italy.
Italy was massive for us. Merc was on billboards over there and we motored product
“Italy was massive for us,” recalls Tompsett. “Merc was on billboards over there and we motored product. At one point before the 2008 recession hit, we had 350 Italian accounts, and we were selling several million pieces in indies across the country. There is still massive awareness and demand for the brand there, although we operate through distributors now.”
Merc currently has more than 300 international accounts. France, Germany and Spain are strong markets for the brand, as is Russia, although Tompsett admits doing business in the country has become increasingly difficult: “We have our own Russian language website and we still trade extensively there, but the drop in the rouble has made it incredibly challenging and frustrating. We have encountered lots of problems including lost shipments, stolen products and issues with customs, but we’re not giving up on the Russians.”
A key focus for the label over the next couple of years is developing the Far Eastern market, where demand for British heritage product is high.
“We have a good business in Japan, we’re in Robinsons department store in Singapore and we have some concessions in Thailand. It’s really an area we’re looking to grow. We have a couple of deals going through for South Korea at the moment. There is a lot of interest in Merc and the mod scene in Asia.”
Javid alavi, founder
The global aspirations of the brand were apparent from the get-go: its founder, Javid Alavi, who came to the UK from Iran in the early 1960s, came up with the name by sticking four pins into a map on Mexico, England, Russia and Canada. Alavi, who is still chairman of the group, founded the family business as a multi-brand market stall on Kingly Street in the Carnaby area of central London in 1967, at the height of the swinging sixties. His son, Sas Alavi, is now managing director of the firm.
“The first day was a Friday and we opened at 9am in Kingly Market,” Alavi Snr recalls. “The rent and rates were £23 a week. The first sale was a pair of red-label Levi jeans and a cheesecloth shirt for £3.50. Levi’s were retailing in the US for $5 at the time, which worked out at £1.50. We never looked back.”
In 1973 the Merc label was born as Alavi recognised a gap in the market for an edgy menswear brand and the potential of the mod movement that was sweeping through the London fashion and music scene. Merc began wholesaling from 1979.
In the same year, Merc opened its first shop on Ganton Street – next to Carnaby Street – stocking labels such as Levi’s, Fred Perry, Farah and Ben Sherman, alongside its own brand. In 1997 Merc moved to 10 Carnaby Street, and traded there until 2013. It was there that Tompsett first encountered the retailer as sales and marketing director for men’s outerwear brand Alpha Industries in the late 1990s.
We could see the retail experience and environment in Carnaby Street was really changing
The decision to close the Carnaby Street flagship was “extremely difficult”, says Tompsett: “We could see the retail experience and environment in Carnaby Street was really changing. The business rates and overheads were massive. It was a lot of shirts to sell at £65. More than that, our neighbours had changed. Massive chains like JD Sports and Benefit had moved in – it had lost its charm.”
Tompsett adds that a return to a bricks-and-mortar retail flagship may be on the cards in the future but Merc is focused on growing online for now, as well as maintaining its wholesale business: “Never say never. We would like to have a store and we will have one – but now isn’t the right time.”
In the UK Merc has 90 wholesale accounts, among them House of Fraser, Footlocker and Asos, and a raft of independents.
Tompsett was recruited in 2011 to spearhead the brand’s domestic growth: “Merc had never really been worked properly in the UK, so we started to really focus our efforts. We have three agents selling in the UK, and we soon got on board with some of the big online and marketplace players. The economy has changed but we still do good business with some strong indies, some big etailers like Zalando and department stores like House of Fraser.”
Steve Ford, owner of Huckleberry’s Menswear in Wolverhampton, has sold Merc for more than 10 years: “It is one of the few mod brands that dates back to the 1960s and has always stayed true to the style of the period. It sells well and has a loyal following with some customers, as they have grown up with it and recognise its unique look.”
No matter how tough it is, people will still need to buy clothes
However, one independent former stockist, who wishes to remain anonymous, says some of the larger retailers often discount Merc’s product online: “Its core pieces are available on many different sites at around 30% off. We had no option but to drop the brand, as we are a full-price retailer. If they can clear up their distribution, we may look at it again in the future, as they are easy to deal with otherwise.”
Tompsett says the biggest change he has seen in his 40-year career in fashion is the shift from the independent boutique to online shopping, but adds that brands today need a mix of all revenue streams: “You can see the independent market isn’t growing, as it has become more difficult to make a living from selling clothes on the high street.
“Our wholesale business is a combination of incredible independents who are solid retailers, department stores and etailers. You have to have that mix, as you still need to be seen on the high street as well as online.
“Things are changing – we need to wake up and embrace new technology. Fashion has to react to what’s happening like the music industry is. We have to move with the times. No matter how tough it is, people will still need to buy clothes, so it’s up to us in the industry to make it work.”