Targeted promotions and an overhaul of its brand mix to include more own labels and young fashion have reinvigorated department store chain Beales. And its chief executive says there’s more to come
If there are any potential WAGs in the room, this is your chance,” says Beales chief executive Tony Brown to a baying pack of customers at his flagship store in Bournemouth. Minutes later, members of local football club AFC Bournemouth sashay nervously down a catwalk, showcasing Beales’ new young fashion brand REDi.
Any further chance for Brown to address the department store’s shoppers is drowned out by wolf whistles and cheering, followed by a smash and grab by shoppers - buoyed by champagne and the promise of a 20% discount - on product featured in the catwalk show.
“The customer base rewards you for doing things like this,” says Brown. “It’s not Mavis tripping down the walkway wearing the latest Viyella, it’s a properly choreographed and executed fashion show and they see, they like, they buy and they keep on coming back.”
It is the third VIP shopping event Beales has hosted and is indicative of the changes Brown has implemented since joining the independent department store chain in June 2008.
In the year to October 31, pre-tax losses at Beales fell 35% to £990,000 and profitability is on an improving trend with plans for the business to be profitable next year.
Brown’s reinvigoration of the 11-store chain, traditionally known for its classic offer, has involved dramatic cost cutting, a more targeted promotional schedule and the restructuring of its brand mix to include more own brand and a younger, quirkier offer.
However, there is still a place for classic brands, says Brown. “For the big-space people who have got a lot of stores, pursuing an own-brand strategy, as Debenhams is, makes perfect sense. It leaves an opportunity for a business such as mine where we cater for a full mix of people. We will carry on catering for the classic customer with Jacques Vert and Alexon brands and Basler and Gerry Weber. There is a market for that and it’s a very distinctive look and style.
However, he adds: “We’ve started to and will carry on putting in quirkier brands such as Joules, which is in three stores and we are over the moon with the performance. Noa Noa has been in the Bournemouth store for about six months and has been performing very well. We are having a great success with GIVe [George Davies’s concept].
“The brands don’t fit other retailer’s stable of brands and they enjoy good trade in market towns. Customers can go to any Debenhams and get exactly the same everywhere. It’s homogenous, which is right for Debenhams, but we are not homogenous, we can range our stores to the customer profile that shops those stores. We listen to our customers and we go and try to deliver it.”
This ‘localness’ is key to Beales, says Brown. He wants to grow the business and thinks it could maintain a portfolio of 25 to 30 stores before its infrastructure would alter and its independent nature would be lost. With recent stakebuilding to 29.7% by shareholder and property entrepreneur Andrew Perloff, the business now has the wherewithal to reach those ambitions, he says.
“We will be looking at specific opportunities with Andrew. He has made it no secret that he is interested in freeholds,” says Brown.
The retailer has opened its first standalone young fashion menswear store in Fareham, Hampshire, housing young fashion brands including Jack & Jones, Duck And Cover, Peter Werth and Ben Sherman over 14,000 sq ft of retail space (Drapers, April 24). It has also launched a young fashion shop-in-shop offer in its Bournemouth store.
“We’ve had a lot of success in the Bournemouth and Kendal stores in creating shop-in-shops of young fashion brands. We will go into other locations,” says Brown.
The young fashion offer includes Beales’ menswear own brand REDi, which is in its first season. Brown says: “We want to develop more own brand but we can’t do it wholesale because we don’t have the resource to do it. We have worked closely with Peter Werth to manufacture REDi.”
In July, its own label womenswear range Crimson will be one year old and is “proving to be successful” he adds.
Now that the brand mix is in order, 129-year-old Beales is starting a new chapter in its history which could include acquisitions, says Brown. The independent department store landscape continues to shift, with Lewis’s in Liverpool - a department store at one time owned by Brown’s old boss Green - the latest to announce its closure in June.
“There is definitely a role for the independent in the future,” says Brown. “I think the big boys aren’t looking at going into market towns and that’s where our opportunity lies. Is there consolidation coming up in the 18 months? There will be.”
While confident of the indie’s place in the future retail landscape, it will not be an easy ride, he says.
“I think there is a bit of a false storm at the moment. I think it will get tough and I am planning for it to get tough. I think we are another year to 18 months away from seeing real recovery.”
So how will he keep Beales on an upwards trajectory?
“The customer is looking for real value for money,” he says. “The retailers that survive, depending on how the banks treat them, will be the ones who reward loyalty, via offers, extra value and making them feel part of the family of the store.”
2008 Chief executive, Beales
2001 Retail director, Bhs
1999 Operations director, Somerfield
1980 Various roles at Asda, including regional managing director south
Q & A
Which have been your best-performing brands this season?
GIVe, by volume, but then it is in all our stores. The Jacques Vert group has really got its act together and got it right this season. Alex & Co has got it wrong, but the other brands from Alexon Group are performing well.
What has been the greatest learning curve in going from retail director of Bhs to chief executive of Beales?
The cyclical effect of what you do. Everything comes back around. I was an apprentice with Sir Philip Green for eight years and I brought the stuff I watched Philip do into Beales but did it my own way. I’m a retailer by heart. Every breath I take is retail and selling - I can do it till the cows come home. But I’m learning to be a property person.
What are the key issues you want addressed by the next government?
Sort out the cost of employment. Bring it down to employ more people. The fairest way to spread the burden is through VAT and levies on the banks, not through taxing jobs and direct taxation.
What are the medium to long-term plans to encourage investment with tax breaks on capital expenditure?
The only way to grow something is through capital expenditure. Also, the government should legislate the credit insurance industry and put an ombudsman in to arbitrate on withdrawals [of cover]. Too many people go out of business because they have lost credit insurance and haven’t had the fleet of foot to get around it.