With market towns as his battleground, the managing director of department store business Browns of York is at the forefront of an indie resurgence
The indies will rise again. That’s the belief of Browns of York managing director Nick Brown, who is taking advantage of market changes to quietly grow his North Yorkshire independent department store group and get indies back on the UK high streets.
Brown is the fourth generation of the family to run the eponymous York department store, which has been an institution in the city since 1896, where it has gradually taken over adjacent
buildings to grow from 1,600 sq ft to 40,000 sq ft of retail space. The group has also grown geographically, acquiring a second, 12,000 sq ft store in Helmsley, which opened in 1990, and a third,
6,000 sq ft store in Beverley, East Yorkshire, in March this year.
“Multiples are still going out of business because they had too much debt to survive the recession, so it’s time for a resurgence of indies as more retail space becomes available,” says Brown.
However, it’s not just the multiples that have closed during the recession - independent department store group Vergo is one of the most recent casualties, having fallen into administration last month - and Brown believes indies need to compete harder with multiples to spot opportunities for growth. “I’m fortunate I own the freehold on the York and Helmsley stores as that gives me stability, but you have to take risks,” he says. “Most people don’t during a recession, so only those who see an opportunity and grab it will survive.”
Brown himself does not shy away from risk. Christian Lawaczeck, managing director of Basler UK, which has a concession in the Beverley store, says: “He’s a gutsy man and a real entrepreneur. He undertook a huge refurbishment of the Beverley building during a very challenging time economically, which was a brave step, but it seems to have paid off.”
Further expansion is on the cards for Browns, which sells a wide range of products including men’s and women’s wear from mainstream brands including Dash, Phase Eight and Gabicci in York and Helmsley. Its women’s standalone in Beverley stocks more contemporary brands such as Sandwich, Fenn Wright Manson and East. “There were already a lot of strong menswear indies in Beverley so we went womenswear only, and as it was a smallish site we stuck with fashion,” explains Brown, whose stores also sell furniture, cosmetics and homeware.
Brown is keen to acquire more sites in the region of 15,000 sq ft, the only problem being that “they don’t come along that often”.
He chose not to make an offer on any of the Vergo stores last month, saying: “Many of them are in towns that have developed while the stores stood still. For example, a Debenhams has opened in Sunderland and taken market share from Joplings.”
He is keeping a close eye on market towns in the north but says Browns is “not a strong enough player” to venture into large city centres that are already well catered for by the likes of Debenhams and House of Fraser.
Still, the competition from such stores in York doesn’t faze him. “The success
of groups like Debenhams and Selfridges helps retail in general,” he says. “If they’re positive that gives me confidence, because we rarely buck the trend.”
While Brown is targeting a healthy 4.6% sales growth this year on 2009’s turnover of £16m, he remains cautious about the market as a whole. “I set that target before Christmas so we’ll have to see how things settle down with the new Government,” he says. “There’s a lot of pain to come over the next 12 months and I don’t think we’ll see the market grow until spring 2011.”
However, he predicts that growth will return faster to the high street than to out-of-town shopping centres. “Everything is cyclical and there’s a shift away from the out-of-town developments that we were told would dominate retail,” he says. “They’re losing kudos because people find them sterile - if they’re not given a nice environment to shop in they’d rather do it on the internet now.”
While shoppers may want to shop closer to home, Brown says government and local councils should do more to make it easy for them to support their local high streets. Like many indie owners, Brown thinks government planning policies have been detrimental to city centres for the past decade. “That needs to be reversed,” he says.
“Easy access is the main issue. Park and ride isn’t enough. We need free parking on the edge of pedestrian zones.” Such measures, he says, would level the playing field and alleviate the growing problem of congestion around out-of-town developments.
But indies also need to help themselves, and Brown has made several adjustments over the past five years to counter any drop in profits seen from slower consumer spending and the rise of out-of-town and online shopping.
A modern take on visual merchandising with more open space and logical product adjacencies helped drive footfall while a gradual reduction in head count, achieved by not replacing leavers, cut overheads.
Browns now has four buyers rather than the 16 it had a decade ago, while a decrease in the number of till points has accommodated for the reduction in shopfloor staff.
“Retailers have learnt to pay fewer people more money to make sure they get the best,” says Brown, although he admits that retention then becomes an issue as the best salespeople are poached. “Fashion retail used to be a career with high kudos but modern, well-paid careers like IT have made it less attractive, so it made us work harder to attract competent staff,” he says.
While a modern environment helps, Brown says there is no escaping the fact that rate of pay is vital.
An online presence is also a key tool in indies’ armoury, and is an area where Brown admits Browns has a long way to go. The store sells a handful of brands online and does a “negligible” percentage of its sales there.
“We’re looking for a consultant at the moment to improve our search engine optimisation,” says Brown, although he insists “the high street will always be our strength”.
1998 Managing director, Browns of York
1996 Merchandise director, Browns
1992 Merchandise and personnel manager, Browns
1991 Assistant store manager, Bentalls of Chatham, Kent [store now closed]
1990 Graduate trainee, Bentalls
What’s been the biggest change in the independent sector since you became managing director of Browns?
We’ve seen a lot of consolidation in the last decade. Indies who owned freeholds sold them and distributed profits among their shareholders during the property boom, so the ones left are those who are passionate about it.
Which other indies do you admire?
[Indie department stores] Jarrolds in Norwich and McEwens of Perth are great businesses. I’ve seen them constantly evolve and change their business models over the years. Camp Hopson is another great example. [Owner] Jonathan Hopson is a forward-thinking guy.
What’s your most important advice to other indies?
Don’t rest on your laurels.
It’s hard to embrace change and the time can disappear - you think you’ve just revamped the store then realise it was five years ago. You must constantly update your fittings and brands to keep the theatre alive and that requires good cash-flow management.
Which new brands are you adding for spring 11?
What has been your proudest achievement at Browns?
That we’re still trading having gone through two recessions.