In just over 10 years, maternity and nursery retailers Mamas & Papas has grown from a single-store business into a global operation. Deputy chief executive Richard Faulkner explains how it was done.
Listening to Richard Faulkner chat through his ambitions for Mamas & Papas, he sounds far too relaxed and cheerful for a man who estimates he has been on 70 flights to 20 countries already this year. The deputy chief executive of the specialist maternity and nursery retailer has been on the global flight path as he seeks out sites and partners to open in new markets, while bolstering the company¹s UK store portfolio and growing its international operations in a bullish programme of store openings planned for next year.
Faulkner, who opened the first store in Northampton as a trial back in 1998, expects the group to have grown from 30 to 40 stores in the UK by the end of this year and he plans to add another 10 or so stores in 2010, reflecting strong sales performance in the domestic market. Sales have jumped 28% since the start of the company¹s financial year on February 1 and the retailer plans to launch a high-end, catwalk-inspired range called Luxe Sport this month.
Faulkner is also in discussions with potential partners in far flung corners of the world, the locations of which neatly sum up the company¹s established strategy to target emerging markets. “When we first decided to look at going international I sat down and profiled the rest of the world and it became obvious that emerging markets offered us the biggest opportunities in the least competitive environments and that we would leave the mature markets until later on,” recalls Faulkner.
Mamas & Papas has targeted markets with high growth populations, the staple of its consumer base, and where rival offers are not well established.
“We now have 16 stores in the Middle East with our franchise partner Al Tayer Group and we have signed deals for franchise-run stores in Japan and Russia,” he says. “On top of that, we are negotiating in the US, Greece, Sweden, Egypt, Morocco, Lebanon, Jordan and Turkey.” Japan and Russia are recent additions to the fold. Mamas & Papas signed the deal for Japan in June with local nursery goods group Pigeon Corporation and will go live in the spring with a target of £12.6m in revenues. The company has partnered with FD Lab Group for Russia, with plans for 30 stores within the next five years. Faulkner continues to like the look of the Emirates and Mamas & Papas’ Middle Eastern growth now includes Saudi Arabian capital Riyadh.
Demonstrative of the demands such rapid expansion creates Faulkner, clearly never a man to sit still for long, had a 3am start scheduled the day after his interview as he prepared to speak at an Indian retail conference and to meet potential Indian franchise partners. “I haven¹t put a timetable on it yet but I would be really excited if we signed a deal before Christmas and had a store open on the sub-continent before the end of 2010,” he says.
Meanwhile, the company will have established offices on mainland China before the end of the year; it already has an office in Hong Kong with a view to opening there.
Unsurprisingly, the retailer has predicated its expansion on franchising but Faulkner says he is also considering opening corporate stores in Poland, currently considered the most robust of the Central European markets. “I could see us owning four or five stores in Poland,” he muses. “We might also use Greece as a base to enter the Balkans, or possibly Macedonia and Albania. We might even start with our own stores and then sell them to a franchiser, I’m really very open market-by-market.” Faulkner is not even put off by that most volatile of all markets, Ukraine, citing Kiev as a possible location for a store.
City centre locations
Closer to home, the flagship Regent Street store in London remains its biggest store by turnover and Faulkner says that it has also acted as a massive brand ambassador for the company, driving much of the enthusiasm for its products outside Britain.
Now Mamas & Papas is planning to focus on city centre locations for expansion following the success of its most recent city centre store format at Birmingham Bullring and Westfield London. The retailer has traditionally focused on out-of-town sites but hopes to take the format to other city centre locations this year. The two-storey sites offer fashion on the ground floor and pushchairs, furniture and gifts on the upper level.
As well as the positive results from its Birmingham store, the success of its flagship Regent Street store has encouraged Mamas & Papas to pursue further city centre locations, including Liverpool, which opened in September, and Manchester, to roll out the format across the country.
Perhaps some of Faulkner’s confidence over the future for Mamas & Papas - which is still owned by husband and wife founders Luisa and David Scacchetti – emanates from his assertion that not only is the retailer’s niche relatively recession-proof but that birth rates tend to increase during economic downturns. He adds: “We just seem to have an offer that reflects what people want at this point in time.”