Bradford-based Drapers Supplier of the Year 2015, Haddow Group, is branching out with its own branded products
One of the first people to greet me when I arrive at Haddow Group’s headquarters at Listers Mill in Bradford is not my interviewee, chief executive Tristan Haddow, but his father, the company’s founder and now chairman, Alan Haddow.
Friendly and engaging, an enthusiastic Haddow Snr is keen to tell me how Haddow Group now is now the leader in the field of digital pigment printing the UK, after investing £500,000 last year to buy the machines and set up the processes for its interiors business.
It is not long before Haddow Jnr arrives to talk about the fashion side of the business: “Yes, he is still very much involved in the business day to day. I keep trying to wheel him out and he keeps coming back. He likes to keep his hand in what is happening and he is quite a whacky inventor,” laughs Tristan Haddow.
Jokes aside, that proactive approach to different ways of doing business is clearly a shared characteristic. Haddow worked for Accenture for seven years as a consultant before joining the firm in 2008 as chief executive, replacing Giles Overend, who wanted to leave. Since then, Haddow has been reshaping the business.
Founded in 1988, Haddow Group had four business streams: interiors, beauty, nightwear and swimwear, each with “siloed” teams recalls Haddow.
The business has been streamlined into two clearer business streams: its contract work for other brands and retailers, and its own branded division.
There were no job losses as a result of the restructuring among the firm’s staff of just less than 100, including a design team of 15 at its 480,000 sq ft office. The restructuring was completed in March 2015 and in November Haddow was named Supplier of the Year at the Drapers Awards.
The business is still in transition with roles to be defined, but those streams are being led by Shelley Jones, who was previously sales director and ran the swimwear side of the business, and Debbie Bowen, who was previously group marketing manager, respectively.
We have some very impressive accounts but we don’t do enough with them
Employees will still have specialisms, but the idea is that the each job function will work more cohesively in one team. The contract side of the business accounts for around 85% of turnover, and counts Asda’s George, Boux Avenue, Racing Green, Tu at Sainsbury’s, Next, Ann Summers, BHS, Dorothy Perkins and Yours Clothing among its swimwear and nightwear customers. The hope is that Haddow Group will be able to maximise returns from its existing accounts.
“I have always felt we have some very impressive accounts but we don’t do enough with them,” says Haddow. “I feel like we could achieve our growth plans just by doing more with them without opening any new doors. Although, obviously we have a target list of companies we would like to see open in the next 18 to 24 months.”
On the contract side of the business Haddow Group offers its retailer and brand customers a suite of services through every stage of product development and delivery, from sourcing fabrics, to design, range planning, manufacturing, merchandising for and delivery to stores.
Fashion, which includes nightwear and swimwear, accounts for two-thirds of Haddow Group’s total turnover, with the remainder being split between interiors and beauty. Nightwear for men and women represents roughly 20% of turnover and in this category Haddow Group offers a range of knits, wovens, satins, and is a specialist in viscose. It also designs and supplies accompanying products such as hot water bottles and slippers.
“Nightwear is one of the harder markets to operate in because it is easy to go and get the basics direct. So we need to constantly make sure our designs are strong. We always have our customers in mind when we create ranges for selection pre-season.”
Haddow says the group is trying to grow its nightwear business by adding sexier options, in addition to the loungewear for which it is known.
Swimwear accounts for 45% of fashion sales, and Haddow Group is focusing on growing the category by expanding the whole holiday fashion shop, including accessories such as hats and bags.
Nightwear is one of the harder markets to operate in because it is easy to go and get the basics direct
The Haddow Group customers Drapers spoke to were full of praise for the brand. Debenhams head of childrenswear buying Shani Delargy says: “We have been working closely with Haddow on children’s nightwear and swimwear to deliver a great character offer to our customer.”
Plus-sized womenswear retailer Yours Clothing has been working with Haddow Group on nightwear and swimwear since launching in 2005.
Yours Clothing lingerie buyer Elaine Mackenzie says: “They are very professional. We never have problems with them, instead they work with you to help you resolve your problems. They also have really strong partnerships with factories, so in the early days they helped the manufacturers to see the potential in Yours Clothing and accept our orders despite being below the normal minimums.”
Haddow believes the new structure will also aid the branded side of the business, which accounts for 15% of group sales and includes swimwear brand Seaspray and interiors brands such as Olivia Bard. In 2014 Haddow Group bought Seaspray for an undisclosed amount. It launched an ecommerce retail site in May 2015 and has been exhibiting at trade shows Moda in February and August, as well as AIS in the same month, both in Birmingham, and the London Swimwear Show in July.
“Branded and contract is very different, and the decisions you need to make for both don’t sit very well together,” explains Haddow. “We knew breaking into the branded market would be a challenge, so that is why we bought an existing brand. It’s a different mindset though, so it has been a success but not taken off as quickly as we would have liked,” he says. Seaspray’s turnover is “somewhere in the six figures”.
However, overall the company’s financial figures are strong. The group grew sales by 22.1% to £15.44m for the year to June 20 2015, and increased gross profit by 17.33% to £5.13m, despite a slight reduction in margin of 1.36% to 33.23%. Haddow says the company had forecast sales growth of 10% to 12% this year, but he thinks it will come in at between 5% and 8%.
“It is a tough trading climate out there at the moment, and a lot of our customers are really grappling with the discounting going on on the high street,” he says.
“BHS is a customer of ours and the uncertainty there has created uncertainty for us in terms of how much business we will do with them. So there have been a number of accounts this year where we have perhaps held back rather than going full throttle.”
One of the challenges we have is the whole of the western world wants their swimwear at the same time
“I would say margin is tough for us at the moment when the exchange rate drops against the yuan. It impacts our customers and ultimately no one wants to pay any more, so we get squeezed in the middle,” he reveals, adding that most customers now have to get sign-off at board or director level. “However, it is also an opportunity because it means people are looking for new suppliers.”
Haddow Group partners with 16 factories across markets such as China, India, Portugal and Egypt to make the product it designs for its contract and branded businesses. The bulk of its swimwear and nightwear are contract orders.
Minimums vary depending on the product, but Haddow Group does not generally accept orders of below 500 pieces of one item. The average order is 3,000 units. Lead times are the industry standard 16 to 18 weeks, although in some instances this can be reduced to between 10 and 12 weeks.
“One of the challenges we have is the whole of the western world wants their swimwear at the same time, so we have to plan production and make sure we have the capacity,” explains Haddow.
The group is looking at ways to bring some shorter production runs, particularly sampling prints, back to the UK and Haddow has been speaking to factories for the past 12 months. However, there is no timeframe for this, as achieving consistency can be difficult.
Turning his attention back to the business’s new structure Haddow concludes: “In the past you used to see something in fashion and then it would filter down into beauty and then into interiors – you used to have this lovely sweep.
”It just doesn’t happen like that any more – everything is pulled together and much more immediate. You can see something in interiors and say ‘Wow! That would sit really well together in a trend for swimwear.’
“Having everyone working together you get more of that excitement as a team – especially from a design and creative point of view. That is what we really want to do: pull trends that are happening across the market and say how we can translate those into what we are doing across categories. If we can help our customers provide that, then we will be successful.”
A history of Haddow Group
1971 Allan Haddow starts his first company, a curtains business called Curtain Services
1988 Haddow Snr rolls up around six textile and interiors companies to establish Haddow Holdings
1998 Haddow Holdings buys Listers Mill and its contents for around £1.2m
2008 Tristan Haddow becomes chief executive of Haddow Holdings
2014 Haddow Jnr rolls up clothing business Crew2000 and its interiors businesses into the newly named Haddow Group
2014 Haddow Group acquires swimwear brand Seaspray