Group CEO of Oasis and Warehouse Hash Ladha has expansion plans including new channels to market, category expansion, the addition of menswear and acquiring new brands.
“Stepping into the CEO position was a bittersweet moment,” Hash Ladha, CEO of Oasis and Warehouse, tells Drapers at the retailers’ bright, airy and colourful head office in London’s Shoreditch. “I had worked with [former CEO] Liz [Evans] very closely with for almost a decade and, as a team, we have done a good job for a number of years. It wasn’t about revaluating the business and starting again. It was about continuing the strategy and enhancing it with some new priorities.”
Father of two Ladha has almost a year in the top job under his belt, after being promoted from chief operating officer in October last year, when Evans left to join Fat Face. He has already made changes to the team structure, and a move into menswear and new brand acquisitions are on the horizon. Ladha also plans to develop relationships with wholesale partners, expand through franchising outside the UK, and open more own stores at home, to meet his aim for the group to “continue to prosper and grow”.
Long-standing team members Sarah Welsh, who was Oasis brand director, and Warehouse brand director Paula Stewart were promoted to the newly created roles of managing directors of the respective womenswear brands in January. Ladha – who joined the business in 2010 from Asos as group multichannel director across Oasis, Warehouse and then-stablemates Karen Millen and Coast – then made a raft of appointments across the Oasis executive team.
In the last year LK Bennett’s ecommerce director, Liam Price, joined as its new head of digital; Huong Su – also ex-LK Bennett – started as merchandise director; former Debenhams buying director Delia Phillips became buying director; and associate director of womenswear creative at Ted Baker Michelle Evatt joined as design director.
Making sure the product proposition is innovative and relevant, and moves on appropriately for our customers, will always be at the heart of our business
With his new team in place, Ladha is set on building on the strong foundations already in place across both brands. In its most recent financial results, for the 53 weeks to 28 February, group EBITDA increased 20% year on year to £11.5m. Group operating profit was up 35% on 2018 and total sales were up 6.5% to £293.2m. Warehouse completed its turnaround strategy and returned to profitability on a full-year basis.
Online sales were up 17% and now make up 30% of the total. Ladha expects that to increase to 40% over the next three years and eventually to 50% through overall sales growth.
To fuel future growth, Ladha plans to launch new channels to market, expand categories including adding menswear for Warehouse, and is seeking to buy new brands following the acquisition of menswear etailer The Idle Man earlier this month.
“Making sure the product proposition is innovative and relevant, and moves on appropriately for our customers, will always be at the heart of our business,” he explains. New categories are a focus point for the group: over the last 18 months Oasis has launched a range of bridesmaid dresses and finalised licensing agreements for homeware, candles, diffusers, luggage and wallpaper. In 2020 it will launch kidswear for the first time with a yet-to-be-revealed licensee.
Emily Gordon-Smith, director of consumer product at trends intelligence company Stylus, says occasionwear is a possible area for growth at Oasis: “There’s definitely an opportunity to own occasionwear and weddingwear, particularly now that Coast is less of a competitor in this space [because of store closures]. Oasis has a particularly feminine handwriting that lends itself to this type of product.”
Warehouse will relaunch its homeware collection next year and, most interestingly of all, will launch its first menswear collection for spring 20. Ladha plays his cards close to his chest when it comes to the details, but the menswear range will sit in a similar position of the market as Warehouse’s womenswear collection, where retail prices range from £8 for a hair clip to £198 for leather trousers. It will have a contemporary design handwriting similar to its womenswear counterpart. It will be sold on the Warehouse website, through strategic partners and possibly in selected independent menswear boutiques.
“If either of the brands were going to launch menswear it would be Warehouse, not Oasis,” Ladha smiles. “We believe the collection can serve a gap in the market. Men’s fashion is driven by the branded market, fast fashion and the value players. Then there are the designer brands and ‘bridge’ brands, like Ted Baker and Reiss. In between the value players and the bridge brands, there is not much competition. I believe Warehouse can mirror its success in womenswear in this segment.”
Launching a new category like menswear for Warehouse is true incremental growth
The business has already begun its foray into menswear with the purchase of The Idle Man. The terms of the deal were not disclosed, but Oasis and Warehouse said the menswear etailer would benefit from the group’s knowledge and industry experience, as well as accessing its established supply chain and infrastructure. Oliver Tezcan, who founded The Idle Man in 2014, will continue to manage the site and will report directly to Ladha.
“Launching a new category like menswear for Warehouse is true incremental growth, and acquiring another brand has the same effect,” Ladha explains. “We have international, wholesale and third-party knowledge and relationships, so we can help scale smaller brands and utilise our group infrastructures whether it be in distribution, IT, HR or finance. There is so much we can add to a business.”
Ladha adds that he is looking at a “small acquisition strategy” around buying other smaller brands that could benefit from the group’s infrastructure.
Another expansion opportunity for the business is through its external partners. The group’s wholesale arm grew 40% year on year in its last financial year. Oasis and Warehouse work with retailers including John Lewis, Next, Debenhams, Very, Zalando and Asos, but will not reveal total numbers of stockists.
In October, the group is launching a marketplace model for both Oasis and Warehouse, under which yet-to-be-revealed retailers can draw from a single pool of stock. The brands own the stock, and any orders that come through a third-party website are dispatched directly to the third-party retailer or to the customer. There is less financial risk for the retailer, as it does not buy the stock, and the brands can show a larger selection of product.
“It is a new revenue stream,” says Ladha. “It is an untapped part of the market for us. Wholesale customers are important to the business, but there is only so much of your product that they can buy. The marketplace model means we can open up the rest of our ranges on these websites.”
Oasis is also expanding its concession partnership with Sainsbury’s following a successful trial in six stores.
“We’re encouraged by the results and we are planning more openings for Oasis,” says Ladha, although he cannot give an exact number yet.
A spokeswoman for Sainsbury’s adds: “The customer demographic of both brands is very similar, and Oasis’s on-trend fashion ranges complement our Tu clothing offer, supporting our strategy to make our stores leading fashion destinations.”
The marketplace model means we can open up the rest of our ranges on these websites
As well as wholesale and concession partnerships, Ladha is keen to expand the group’s franchise partnerships. Internationally, it has 143 franchise stores in 30 countries focusing on the Far East, the Middle East and South America. Ladha would like to expand into Europe with a partner in the near future.
New own stores are also on the cards in the UK. Warehouse closed a “significant” number of loss-making stores as part of its turnaround plan over the last three years. At the end of its last financial year, it had 27 stores in the UK and Ireland and 205 concessions.
Now that the business is back in the black, Ladha plans to open more town-centre and “neighbourhood” stores: “There are more opportunities in city centres across the UK providing the deal is right. We would like a store in the City of London and we are looking at locations on the outskirts of major cities where commuters are likely to live.”
Oasis had 80 shops in the UK and Ireland and 225 concessions at the end of its financial year, including nine under its smaller, “local” format in towns such as Farnham in Surrey and Clitheroe in Lancashire.
Ladha sees potential to grow this to 30 stores based on the success of the format to date: “The local stores do not have really long trading hours, the rental deals are palatable, they are not huge spaces that are costly to operate, and the competition is not as extreme as it would be in a flagship market. We are determined that the stores are part of the local community and so the service element is very important – there is free coffee in the morning and prosecco after 3pm for customers. It is going back to good, old-fashioned shopkeeping, but in a modern way.”
Despite the opportunities, the costs associated with stores remains one of the biggest challenges for the group, and shops are being reviewed on a case-by-case basis as leases expire.
“The way we operate is very simple: if a lease is coming up for renewal or a break, we make the decisions on the merit of individual stores,” Ladha says matter-of-factly. “There cannot be any vanity projects. We are continuously talking to our landlords about rents. If we are able to do a deal at any point, we will do it, if not, we have to sadly close the store. Given the amount of company voluntary arrangements in the market it is not a level playing field for brands that have not restructured in that way.”
Negotiations with landlords form part of Ladha’s strategy to make sure the business is fit for the future. All aspects of the company, from staffing to distribution costs, have been assessed to see if they can be improved and made more efficient: “We find ourselves in one of most challenging times in retail in a generation. There are so many headwinds facing stores and business in general, whether that be the channel shift into digital, Brexit, economic uncertainty, and who knows, even a possible general election. We need to make sure we are fit for purpose and that requires restructuring parts of our business.”
I believe that that in five years’ time we may well be a group which has a few brands, delivering overall growth
The group’s retail teams [stores and concessions staff] were put into consultation at the end of August as the business changes the payroll model, reviewing levels of staff in store and the hours worked.
Ladha declines to provide any more detail, but says: “It was a difficult decision. People are at the heart of the business and letting anyone go is tough, but we are handling the situation in a sensitive and appropriate way. We have to make sure the business is fit for purpose.”
To battle the headwinds and increased competition in the market, he tells his team to maintain their razor-sharp focus on their customer: “One of the things that keeps me awake at night is not doing a good enough job for the customer.
“As a team we are focused on the things we can control, rather than being obsessed about the things we cannot. Focusing on the consumer, from product to channel proposition, customer experience and best-in-class service: those are the things that will fundamentally win the race.”
Looking to the future, Ladha hopes to strengthen the group’s position sufficiently to weather whatever market changes, challenges and opportunities may come: “I want the group to continue to prosper and grow, reaching new markets and customers. Our acquisition of The Idle Man demonstrates our ambition, and I believe that that in five years’ time we may well be a group which has a few brands, delivering overall growth.”
He adds: “The most important thing is to make sure the brands continue to be what people love and want. We need to be agile and flexible to make sure wherever we end up in five years we are modern, relevant and that the business is fit for purpose.”