Kent indie The Find won some stern advice from retail guru Mary Portas. Drapers will follow the business throughout 2011 to see if it can turn itself around.
Running a successful indie is by no means an easy task, especially without prior fashion experience. The idea of selling beautiful clothes in beautiful surroundings with perfect customer service and taking a big bite of what one might think is a lucrative market is hard to resist. But does it always work out?
This year, Drapers called for fashion indies facing a specific challenge - be it with footfall, profitability, brand mix, or marketing - to apply for the chance to win business advice from retail guru Mary Portas, star of TV series Mary Queen of Shops. Four indies were shortlisted and subjected to scrutiny from Portas on stage at last month’s Drapers Fashion Summit 2010, before Portas and the Drapers team chose the store they felt would most benefit from further advice and coverage in Drapers next year.
It was Wendy Leat, owner of The Find, a two-store womenswear indie with shops in Cranbrook and Sevenoaks in Kent, who won the prize which included a scholarship to workshops run by Skillsmart Retail. For the next 12 months Leat will chart The Find’s progress in a series of Drapers columns, as she implements Portas and Skillsmart’s advice.
Leat, who was previously an interior designer, opened the doors of her first shop in Cranbrook in 2005 selling contemporary womenswear aimed at yummy mummies and ladies who lunch. It was so successful in its first year of trading that it prompted Leat to open a second store in Sevenoaks in 2008, to “replicate what we already had in Cranbrook”, grow sales and extend its customer base. It has never made a profit and is subsidised by the successful Cranbrook store. The addition of the Sevenoaks store has meant the The Find has suffered continual losses overall.
Asked why she decided to open her own fashion boutique with no prior experience, Leat says: “I was always in love with clothes, fabrics, colours and fashion magazines. I partly blame my mother, who never let me have a Barbie doll, and partly the consistently bad customer service I encountered over the years.
Of the opening of the Cranbrook store, Leat says: “We [Leat and her husband] felt it was meant to be. Somehow everything clicked into place.” With only three brands on the shelves, Sandwich, Offshoot and Quin & Donnelly, store sold out of stock within one week of opening. “I had to dash to London and bring some new brands in on short order to keep us open. It was tough - I had to do my buying on instinct.”
As a result Noli, Knitwear Queen and Gabriella Knight were added to the brand mix and were so successful that the store made a gross profit of £95,000 in its first year of trading. “We couldn’t believe it,” says Leat.
That same year The Find was shortlisted for Best New Independent at The Drapers Awards and things were looking good - so good that Leat decided to expand the business. Her husband, Ian Leat, who at the time was dissatisfied with his job at fashion logistics firm DTS Logistics, quit to join the boutique too.
“We wanted to open a second store so Ian left his job and we started searching for the right location,” says Leat. When a shop in Sevenoaks became available, the couple considered not only the location but also the competition and the type of potential customers they were likely to attract. The Find in Sevenoaks opened with the aim of attracting similar customers to the Cranbrook store.
While the Sevenoaks store performed well in its first three months of trading, sales suddenly slowed and in its first year the store made a loss of just over £7,000. The opening brand mix was built around Oui Set, Sandwich, Quin & Donnelly, Noli and Blank, but the store failed to keep the attention of “private school parents, ladies who lunch and people who go to functions and garden parties,” according to Leat.
The Sevenoaks store is managed by Wendy and Ian Leats’ daughter Georgie, who has a flair for buying and managing projects but is quieter than her self-confessed “chatterbox” mother. She sometimes struggles to connect with shoppers, who tend to be more standoffish in Sevenoaks.
The brand mix was addressed, with labels such as Paule Vasseur, Ispirato and Mascara added to the offer. The Leats also did marketing in the local press, offering discounts and hosting catwalk events, but they made no difference.
By year two, losses doubled and the store has continued losing money. Sales also slipped at Cranbrook. “We don’t know what we did wrong,” says Leat.
The Find’s transactional website, which launched earlier this year, has also fallen short of expectations. At present it is selling one or two items a week, yet it is taking a lot of time to manage.
The next step
“We know we might have to close the Sevenoaks store, and we are looking into the implications of that [in terms of estate agent fees]”, says Leat.
However, Leat is worried her financial situation means she may not be able to afford to close the second shop because of the costs. The rent is £21,000 per annum and The Find in Sevenoaks still has nine years left on its lease.
The Find also owes money to suppliers and is struggling to pay them because it can’t sell their stock. Sales will have to pick up if it is to have the budget to buy stock for spring 11.
The advice from Mary Portas
The Leats know how to run a good indie, with the right brand mix for the target market, a focus on personal service that inspires loyal customers, and an appropriate control on costs. The past success of the Cranbrook store shows that. But they expanded for the wrong reasons and made a mistake thinking they could simply replicate the formula they had used once in another location.
The Sevenoaks store serves a different audience to the one in Cranbrook. They also have the wrong person in charge of the Sevenoaks store. To Wendy, fronting the Cranbrook store and inspiring loyalty in her customers comes naturally, but her daughter Georgie is quieter and - while she has plenty of talents - lacks the showmanship necessary to run an indie.
Instead of having one successful business the Leats are on the road to two failing ones. My advice is to shut the Sevenoaks store and focus on developing the business online. Georgie has the focus and imagination to oversee this sort of project, while removing the drain on funds of the Sevenoaks store would allow the Leats to invest more in new stock for the Cranbrook shop - reviving that and helping it respond to the changes in its customers’ demands.
Number of stores operated by The Find
Number of years in business
First-year gross profit at Cranbrook store
Loss at Sevenoaks store last year