The surf-inspired brand has lost its way in recent years, but chief executive Dominic Langan is taking it back to its technical roots and plans to grow it into a £100m-turnover business.
Animal’s London showroom is tucked away in a converted wharf on the bank of the Thames in Wapping. On the day Drapers visits, the water and sky outside are matching shades of grey, and the wind whistles in through gaps in the windows. The showroom, full of hoodies, T-shirts and the occasional wetsuit, provides a welcome burst of colour.
In the middle of the room sits Dominic Langan, who has been chief executive of the sports-inspired lifestyle brand since last March. He is here to talk about the work that has been done over the past year to turn Animal around, as well as plans to celebrate its 30th anniversary next month and open a London flagship later this year.
Animal was founded as a watch brand in 1987 by two friends, Ian Elliot and Nigel Broughton. Keen surfers, they knew from experience how easy it was to lose your watch while out on the waves, so they developed a hook and loop strap. The brand quickly became popular among sports enthusiasts, and the first men’s clothing range followed in 1996.
In 1999, British supplier and distributor H Young Holdings bought Animal from Elliot and Broughton. It quickly introduced women’s and children’s clothing ranges, and launched a non-transactional site. Two years later, the first Animal store opened on London’s Carnaby Street.
The market was changing and Animal hadn’t moved on with its customer. Sales were flatlining
Today in the UK, Animal has 29 owned stores and 236 stockists – of which 180 are single-store independents – and an ecommerce site. Key accounts include Next, Debenhams and Surfdome. Internationally it has 145 stockists – of which 40 are single-store independents – in 23 territories. There are also six licensed Animal fascia stores in the surfing heartland of south-west of England. UK retail accounts for half of its turnover, wholesale 35%, ecommerce 10% and international sales 5%. Its head office is in Poole, on the Dorset coast.
H Young, which is privately owned by US entrepreneur Ronald Sämann, operates a diverse portfolio of businesses that includes: Madison, which distributes bicycle parts, accessories and clothing; Sportline, which distributes the Ridgeback, Saracen, Genesis and Adventure bike brands; and outdoor clothing brand Rohan, which H Young acquired last September.
Langan joined Madison in 1989 as retail services manager and worked his way up to become CEO in 2005. He has since also taken the helm at Animal, Rohan and their sister company, Leeda, which distributes fishing tackle.
When Langan took the lead at Madison, it had an annual turnover of £28m – by its peak in 2015 this had reached £160m (a decision to stop distributing GoPro action cameras caused a dip in sales to £124m in 2016). So when Animal’s sales were down 24% at the end of the first quarter of 2016, Langan was asked to step in.
I went in with a more negative view of the product than it probably deserved
“The market was changing and Animal hadn’t moved on with its customer. Sales were flatlining,” Langan recalls. “There was no negativity towards the brand, people just weren’t buying it any more. It had got a bit stale.”
One long-time stockist, who asks not to be named, confirms this: “Sales have plateaued over the past couple of years. The core items they’ve done for 10 years still do good volumes, but less than they used to. They’ve focused too much on their ‘winners’ and not made enough changes. They’ve identified that, though, and they’re becoming more design led.”
However, he warns against trying to make the brand “super-cool”: “Some of the stuff we’re seeing now is not very Animal, and it’s not right for our customer.”
Over the past year, Langan has spent a lot of time in stores and with the Animal design team, refocusing the company on what its core customers want: everyday, contemporary clothing in technical fabrics. The team has been working to elevate the brand with better designs, fits and fabrics. At the end of the full year 2016, sales were up 0.2% on 2015 to £30m. Langan plans to grow this to £100m by 2021.
“I went in with a more negative view of the product than it probably deserved,” he admits, waving his hand at the rails of clothing behind him. “There was good stuff being designed, but it was all being dictated by the retail and wholesale buy, and they were playing it safe.”
We feel we’ve got the product going in the right direction
Sue Issleib has sold Animal for the past eight years in her womenswear independent Hazard in Launceston, Cornwall. She retired at the end of last month but the new owners are keeping the brand on.
Issleib says: “We took it on originally because we liked the quality of their accessories, and the quality of the clothing is good, too. It hasn’t wowed for a while. It’s bog standard stuff: hoodies, jeans, T-shirts – but it’s a reliable, recognisable brand.”
The spring 17 ranges show the “first hint” of what Langan and his team have been trying to achieve, he says. Prices start at £8 for a basic T-shirt and go up to £33 for an “element-proof” jacket.
“There’s much more technical product in the range, breathable and waterproof fabric. We’re targeting a younger audience with active lifestyles, who have an understanding of technical fabrics.”
There will be further evidence of this in the 26-piece limited edition collection produced for Animal’s 30th anniversary. It will be available from May in stores and online. The collection nods to the 1980s, and features reversible boardshorts and heat-sensitive T-shirts. Wholesale prices range from £7.50 for a vest to £65 for a limited edition watch.
However, Langan says the autumn 17 ranges, which drop in July, will be the real turning point: “That’s where we’ve had a reasonable amount of control. We feel we’ve got the product going in the right direction. People used to really subscribe to the brand. If you were a mountain biker, you would wear Animal. We’re not going to compete with Fat Face or White Stuff, we’re not fast enough and we don’t have the volumes. We’re trying to bring in more product that shows we understand what our customers stand for.”
One of Langan’s bugbears – which is shared by Animal’s wholesale stockists – is discounting: “The market is so promotionally aggressive. It’s horrendous,” he complains. “Every customer expects a discount on everything. It makes it quite difficult.” He admits that Animal was being “discounted all over the place” last year, particularly online, but he has been working to bring this under control.
“Last year we inherited so much overstock. Now we’re really clean. We’re moving away from 20% of everything and being more targeted.”
We’ll be looking for some more edgier places, where younger people are living and there are lots of restaurants
Now that the product is getting back on track, Langan’s attention is turning to Animal’s store estate. Some of its stores are, he admits, are a bit tired. He is looking at the shop fits and introducing more regular drops, so fresh product is coming into stores more often. Shop floor staff will be trained, so they can explain the technical side of the product and more information will be available for interested customers.
“I want the stores to have that feeling of a specialist retailer,” he explains.
The brand’s own stores are concentrated in the south-west of England, although there are a few scattered across the Midlands and East Anglia. One of the targets is to have more of a nationwide spread. Animal opened three stores last year, in Bluewater, Brighton and Cabot Circus shopping centre in Bristol. Langan is now eyeing units for a flagship in London, as well as opportunities to open in Glasgow, Manchester and Liverpool.
“I inherited a lot of stores in shopping centres,” he says. “We’ll be looking for some more edgier places, where younger people are living and there are lots of restaurants – even if they are just short-term rentals.”
Meanwhile, Langan plans to grow ecommerce sales from 5% to 20% in the next two years: “We’re doing tons of work on the website at the moment, with a big focus on user experience,” he says. The site, which is on a Demandware platform, is being rebuilt with an emphasis on mobile.
Export sales are growing, too, up 14% so far this season compared with spring 16. A successful showing at Munich-based sportswear trade show ISPO in February delivered four new international accounts in Italy and Hong Kong. Langan says there is plenty of potential internationally – particularly in the United Arab Emirates, which accounts for 49% of international sales, as well as Spain, Italy, Greece and Germany. However, he wants to “make sure home is sorted first, before I race off and do other things”.
It is repositioning as a lifestyle brand as opposed to pure surf, with a twist that makes it unique
In the short term, however, this reliance on UK sales has made Animal vulnerable to sterling’s weakness: “We hedge in advance as much as we can, but it’s an ongoing challenge,” admits Langan. “We’re talking to factories [about bringing down costs].”
Simon Colbeck, former head of innovation and quality at Marks & Spencer, joined Madison (on the clothing side), Animal and Rohan, as consulting product and technical director in January. He has been tasked with reviewing their supply chains, which stretch across China, Indonesia, Vietnam, Turkey and the UK, and looking for synergies in the trim and fabric buys.
“They are very different brands with strong DNAs, but there are some similarities – that was part of the appeal of the role,” says Colbeck. “With Animal we wanted to add understated benefits to the garments: giving a performance twist to lifestyle product. Rohan and Madison have the supply base and technical ability to allow us to do that.
“The basic anchor points of Animal were still relevant, but it had lost focus on its target customer. It is repositioning as a lifestyle brand as opposed to pure surf, with a twist that makes it unique. Having seen the autumn collections, I think there’s been a significant step change.”
The product turnaround, store refresh and ecommerce expansion is a lot for the chief executive of one company to do, let alone the leader of four. Yet Langan is confident his plans will succeed in re-positioning Animal as a well-respected lifestyle brand that offers high-quality technical fabrics. His biggest challenge will be reigniting the passion customers once felt for this brand and the outdoorsy lifestyle it encapsulates.
30 years of Animal