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Soaring overheads put indies on brink

New research has revealed how escalating overheads are crippling UK independents, with 60% of indie owners polled fearing they won’t survive if costs rise higher.

The study by price comparison website Make It Cheaper and the Centre for Economic and Business Research (CEBR) found that back-office costs for small firms have risen nearly 25% since 2005, and that indies are having to come up with ever more innovative strategies to stay afloat.

Of the 750 indies polled for the study, 85% said the UK had become an “unbearably expensive” place to do business.

Topping the list of complaints among indies spoken to by Drapers was business rate increases.

James Leslie, co-owner of three-store London women’s denim indie Trilogy, said: “If I were in charge, the first thing I would do for indies is make rates negligible for a year.”

Pamela Shiffer, owner of premium womenswear indie Pamela Shiffer in Primrose Hill and Notting Hill, London, said: “The litmus paper is being licked as to who can stand it [the rising costs] and who gives up. Some say it’s not worth it.”

Shiffer said she has kept her business alive by creating new price points and by working closely with brands to bring in styles that are not stocked by competitors.

At designer womenswear indie Square in Bath, buyer John McNulty said retailers must absorb rising overheads. “The only way to keep your margins is to become ruthless with your buying. You have to monitor the figures like never before. Flexible suppliers will take back a top if it’s not selling and replace it with something that will.”

Daniel Le Sauvage, owner of Ipswich young fashion indie Urban Vintage, installed solar panels in a bid to counter next month’s rise in gas and electricity prices.

  • Tell us how your business is coping with rising overheads below

Readers' comments (4)

  • Indies must remain tight with their buying, not be dictated to by brands with delusions of grandeur, put their prices up and most importantly STOP GOING ON SALE. The more an indie goes on sale the more credibility it loses and less likely that shoppers will spend. If an owner of an indie complains that they have only been at full price for x weeks of the year, then who have they got to blame...?

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  • Indies have got to carry labels that don't appear in the stores and multiples. That way they can retain their edge by showing something different and not be dictated to as to when to go on sale. There are plenty of niche and edgy suppliers out there. The good retailers will find them, support them and survive.

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  • With many landlords giving rent concessions often the largest fixed cost is the rates bill which despite rating reviews can be well out of step with changing rental values and on top of that even when rateable vaues are reduced there is so called transitional relief that results in reductions taking five years to fully come through.
    Another problem affecting smaller retailers is the near disappearance in some sectors of stock holding importers and the enormous quantities per colour now required by Chinese manufactures.
    In response to your first correspondent if you are trading in a shopping centre and everyone else is on sale it is extremely difficult not to follow suit.

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  • darren hoggett

    As an independent, I would agree with a previous post that going on sale isn't the answer. Our takings generally go up when everyone else goes on sale, because the vast majority of customers aren't interested Sale times, which may surprise people. Sale times can backfire as you attract the wrong customer to your store. If you have the right goods at the price that consumers are prepared to pay, then it makes the concept of going on sale pretty much redundant. If a lot of the major players actually sat down and thought about why they go on sale so much and what does it actually achieve in the end, they probably wouldn't be able to give a credible answer.

    Darren Hoggett/Co-Owner/J&B Menswear Limited, Norwich

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