Chief executive Kenny Wilson is growing the quintessentially British brand’s global reach.
The Cath Kidston head office is as bright and cheerful as you would expect it to be. A neon pink sign declaring “It’s blooming lovely” lights up the staff cafe and the bright, feminine prints that have become the brand’s calling card are dotted throughout the London headquarters.
The accessories, fashion, home and kidswear brand has come a long way since 1993, when its eponymous founder started selling fabrics and car boot finds from a shop in Holland Park, west London. The brand’s own products and vintage-inspired prints featuring roses, polka dots and Kidston’s dog, a Lakeland terrier called Stanley, are now sold through its network of more than 200 stores worldwide, 70% of which are outside the UK.
Kidston designed chief executive Kenny Wilson’s office herself shortly before he joined the business from Claire’s Accessories in 2001. A framed vintage tea towel with a map of Scotland is a reminder of his Aberdeen roots. When Wilson first arrived, the only Cath Kidston product he owned was a cowboy print mug. He now “has a lot more,” he chuckles.
“When I was working [at Claire’s Accessories] a lot of the women were using Cath Kidston products, so you could see it was a popular brand,” he recalls. “Cath Kidston was looking for someone who knew how to run brands and knew about geographical expansion. I went and looked at the business and saw a ton of potential. There was a bunch of diversity in the four categories of fashion, kids, accessories and homeware, and I could see as I walked round the shops there was also a real diversity in age.”
I really noticed walking around was there were a lot of non-British people in the London shops
Crucially, Wilson also spotted the potential for rapid international expansion.
“The other thing I really noticed walking around was there were a lot of non-British people in the London shops.” At the time he joined, there were six Cath Kidston shops outside the UK: four in Japan and two in Korea.
Expanding a business outside of the UK was something Wilson knew all about. Before Claire’s Accessories he worked for almost 20 years at Levi’s, starting as a salesman in Scotland before becoming brand president for Europe, the Middle East and Asia in 2001 aged just 34, and then senior vice-president of commercial operations in 2005.
During Wilson’s three years at accessories retailer, it opened 300 stores and expanded in Germany, France and Spain, as well as entering Poland and the Czech Republic. This was the kind of international expertise Cath Kidston wanted.
“Cath knew that, to grow the business, you’ve got to put in a different level of infrastructure,” he explains. “It’s completely different running a single country business than it is running a multi-country business, and so the easiest thing to do is to get someone who’s done it. I’ve never started a business from scratch but Cath built a business from one shop and then said to me: ‘Right. This is what I’ve got. How can you help me scale it?’”
Wilson’s first day in the job was spent on a plane to Japan and Korea with Kidston to visit the brand’s fledgling international arm.
“We chatted to partners and it was just easy things,” he recalls. “For example, the product was being shipped from Asia-Pacific back to London and then out to Japan. When you run a big company, you don’t do that. But the company didn’t have the resources at the time. Now, we’ve got a distribution centre in Tokyo, a distribution centre in Hong Kong and Shanghai.”
As the only person at Cath Kidston who had lived and worked outside the UK, he adds: “It’s not because I’m smarter than the people who were working here before, but I’ve done it before and you learn through experience.”
Asia was a natural place to grow the business. As well as spotting the high number of Asian consumers in Cath Kidston stores, data showed Asia-Pacific countries were second only to the UK for web shipments.
As Wilson puts it, the brand trades on its “Britishness”: “We make sure that ‘Cath Kidston established London 1993’ is built into our logo. It’s a very conscious choice to say this is a British brand because of the benefits of originality and creativity that brings with it.”
It’s a very conscious choice to say this is a British brand
Paul Alger, director of international business development for the UK Fashion and Textile Association, says: “The key to the brand’s success in Asia has been a strong English story and feel. Although most of its product is made in Asia, Asian consumers love the quirky prints and affordable price. The company has invested in a local set-up and staff to make sure they react quickly and efficiently to the challenges and opportunities of the Asian market. This was especially important in the early days, as traditionally, the Japanese like UK brands to be actually made in the UK.”
Japan is Cath Kidston’s biggest international market. The brand bought back its Japanese franchise in September 2015 from conglomerate TSI Holdings.
“It’s brought us closer to the customer,” Wilson explains. “My experience of having worked in Japan is that it’s driven by newness, more than any other market in the world. It wasn’t for the short term.
“Profit went down, which we expected, but Japanese sales in the last six months have been up 30% like for like and that’s because we’re closer to the consumer.”
The brand’s acquisition of its Japanese franchise hit its underlying EBITDA for the year to 29 March 2016, resulting in an 11.3% drop, to £7.4m. Sales grew 12.2% to £59.9m in the six months to 24 September, fuelled by a jump in international sales which grew 44.3% to £18.9m.
Under new ownership
As well as further international expansion planned into Latin America and India, there are other changes afoot at Cath Kidston. Hong Kong-based Baring Asia – a shareholder since 2014 – bought the company in October 2016. One of the largest private equity groups in Asia, its expertise in the region was a key attraction for Cath Kidston. The sale resulted in the departure of chairman (and Wilson’s former boss at Levi’s) Paul Mason. Mason has since been replaced by William Flanz, former chairman and chief executive of Gucci Group.
Kidston has reduced her role, stepping down as creative director in 2014 and as a non-executive director in June last year. In October last year, former Harrods boss Marty Wikstrom joined as non-executive director.
Half the people who buy the brand buy it as a gift
“Cath’s been retired from the day-to-day business for more than two years and we’re still growing very successfully,” says Wilson. “Cath and I were once in the Marylebone shop standing looking at product and chatting. One customer said to another, ‘Do you think she’s still alive?’ Cath laughed, but that was a very conscious choice by her and it was a very mature choice. She was trying to build a brand, not the individual.”
There have also been additions to the product offer. Although the mix varies country by country, around half of the business is made up of bags and accessories, 20% is home, another 20% is kids and 10% is fashion.
Wilson is happy with the split and says clothing is there to sit alongside the main accessories offer: “Our mix is broadly where we want it to be. We sell a lot of wallets, ticket holders and glasses cases as gifts. Half the people who buy the brand buy it as a gift and that’s important – it shows an element of brand health.”
The brand has recently worked with entertainment giant Disney on two sell-out collaborations featuring Winnie the Pooh, and Mickey and Minnie Mouse.
“I’ve been working with Disney for 16 years, and Cath Kidston was one of the most professional and efficient companies I’ve worked with, which is a huge kudos to Kenny,” says Francesca Gianesin, vice-president, fashion and lifestyle, for the Walt Disney Company EMEA.
“Quality and fun is exactly what Cath Kidston stands for and the mix of Winnie the Pooh, which is quintessentially British, with Cath Kidston, was perfect.”
Cath Kidston also wants to broaden its demographic further with its new Future Florals accessories range. The more muted take on the brand’s trademark patterns uses monochromes and navy blues in place of the more traditional sky blue and pink. The collection launched in autumn last year and will be a key focus throughout 2017.
Without giving too much away, we’ve got a bunch of other ideas for this year
“Everyone associates Cath Kidston with colour but are you going to walk into your office with a 12-colour print bag when often women are now dressed in more sombre business attire in terms of colours?” asks Wilson. “Future Florals was targeted at a younger woman, living in an urban environment. It still feels very like us but you can take it and pair it with darker colours like a suit or plain camel coat very easily.”
The range sold out in a few weeks in the UK and just one week in Japan.
Even Wilson was surprised by the level of its popularity: “On the one hand, it’s ministry of the bleeding obvious. For most people black and grey are their bestselling colours but for our company our bestsellers have historically been bright. Without giving too much away, we’ve got a bunch of other ideas for this year.”
Cath Kidston might be introducing some darker colours into its range but with the world in its sights and Wilson at the helm, the future is still looking bright.