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Steve Robinson

Its chief executive has overseen M and M Direct’s metamorphosis from a discount branded sportswear catalogue retailer into one of the UK’s most successful fashion etailers

As part of the team behind a best-selling football World Cup-themed condom in 1998, M and M Direct chief executive Steve Robinson certainly knows how to be inventive.

But it is his back-to-basics approach to retailing and straightforward business values which have helped him almost double the size of the home-shopping firm’s business in his two years at the helm. M and M Direct sells hundreds of brands, including Firetrap, Miss Sixty and Reebok, at discounts of up to 75%. Its simple, functional website is easy to navigate and clear in its offer. Robinson says: “We sell clearance stock to people, but we don’t want to make them feel like they’re shopping on a clearance site.”

In November 2007, when Robinson joined M and M Direct after it was bought by US private equity firm TA Associates, he declared he wanted to grow its sales from £63 million to £150m. Less than two years later, it is already on target to hit the £100m mark, despite the economic downturn.

Robinson says: “The next 12 to 18 months are about good, honest retailing; about great product, cracking service and decent prices. Customers have started to rebel against gimmicks. They want honesty from retailers – to sell it as it is.”

M and M Direct is well positioned in the market as online is the only area of growth for retail at the moment. And by selling discounted branded product the business capitalises on the appetites of bargain-hungry shoppers. According to figures from internet research firm IMRG, UK shoppers spent more than £4.67 billion online in December 2008, up 14.2% on 2007. And clothing was the jewel in the crown for online retailers, with sales soaring 32% year-on-year in December.

M and M Direct’s sales shot up 31% for the 10 weeks to January 4, and its internet orders rocketed 57% over the period. Its site was the sixth most-visited clothing website in the UK in December, and it recorded its first ever £1m sales day on December 8.

Under Robinson’s guidance, the business has undergone a transformation in the past few years. It is fast becoming a fashion etailer, moving away from its roots as a catalogue retailer selling branded discount sportswear.  The company was set up 21 years ago by the two Ms – Martin Churchward and Mark  Ellis. The business now stocks about 75% fashion and 25% sportswear, as it looks to capitalise on the growing trend for fashion shopping online.

Robinson says the online branded discount market in the UK is underdeveloped compared with the US, so there is huge untapped potential for growth. However, other retailers are fast getting in on the act. Last year, etailer Asos launched its branded discount site Asos Red, which it expects to double its turnover in the next three years.

Honest pricing

However, Robinson is unfazed by competition, both online and in store. He believes consumers are growing wary of retailers’ price wars. He says: “Retailers offer discounts, say up to 50% off, but only a small part of the store actually has a 50% discount – it’s a gimmick and customers are fed up with it. Store-based retailers also had to give away margin pre-Christmas; they were struggling with cash. This year they’ve got to generate better margin, so will need sensible levels of pricing.”

Robinson joined M and M Direct from the chief executive role at Tesco Direct, the supermarket chain’s online operation. That experience stood him in good stead for his current role, Robinson says. “Tesco Direct was great. We built the site from scratch and it is great in your career to be known for something. But M and M Direct appealed to me because it was a business where I could really make a difference.”

Mike Tomkins, a shareholder in and former chief executive of M and M Direct, says of Robinson: “I’m really proud of what Steve’s achieved. He’s managed to take a fast-growing business to a new level, but has retained the charm.”

M and M Direct’s head office, based in Leominster, Herefordshire, is still fairly small, with a team of about 70. Since joining, Robinson has drafted in new people to help grow the business, most recently marketing director Neil Samson. However, despite Samson’s appointment, Robinson says there has to be a careful line drawn when it comes to advertising, with brands wanting to remain under the radar. “The question is, how do you grow a business but not advertise?” he says. “So far it has been word of mouth and we will be doing more of the same, but this year we will accelerate it. For example, we will introduce financial incentives for ‘recommend a friend’. We did a trial which went well.”

M and M Direct buys clearance stock, along with goods from cancelled orders, directly from brands. Robinson says having a  strong relationship with suppliers is crucial to the business’s success. “We solve suppliers’ problems for them but we have to do it in a low-key way. The normal buyer/supplier relationship is reversed for us. We depend on the suppliers and we treat them well and nurture that relationship. We are well known for being an organisation that suppliers want to deal with. We have never lost a brand.”

His sentiments are echoed by the brands M and M Direct deals with. Alasdair Gorrod,  key accounts executive at footwear brand Frank Wright, says: “It is an honest business which really knows its customer and the marketplace. It does a great job.”

However, as a business based on surplus stock, if brands are buying less in anticipation of a worsening economy, could this leave it short? Robinson does not think so. “In the 21 years since the company launched there has never been a stock shortage. We’ve been through recessions before, and there will always be imperfections in the market which suppliers will want to maximise. Even if suppliers have bought less, businesses are going bust, so there’s plenty of stock around.”

As well as raising its profile in the year ahead, M and M Direct also plans to expand into Europe next year by accepting euro transactions on its website. Robinson says: “With the strength of the euro, it’s a good time to trial it.” The company is also looking to develop its own brands – it already owns skiwear brand Kangaroo Poo – but Robinson wouldn’t disclose more details.

M and M Direct will also test new product categories, having sold toys and cosmetics over Christmas. Robinson says: “We are always looking to exploit the fact that we have a million customers. I’m not saying we’ll do lots of non fashion, but customers who like a deal have been delighted with it.”

He adds: “This year will be complex. I’m not saying M and M Direct is recession-proof, but we are more resilient than others.”

CV

  • 2007   Chief executive, M and M Direct
  • 2005   Chief executive, Tesco Direct
  • 2001   Finance director, Argos 
  • 1998   Group chief analyst and head of strategy for general merchandise, Kingfisher
  • 1997   Medicines buyer, Superdrug
  • 1995   Financial analyst, Superdrug
  • 1992   Trainee accountant, Ernst & Young

Q&A

Which is your favourite retailer?
Hotel Chocolat. I’m a new convert to it, it’s brilliant. I went to its store in Milton Keynes and it was so busy. The company is obsessed with the product, which is immaculate and beautifully presented. It is executed so well in the store.

What is the best-selling product you have ever worked on?
When I worked at Superdrug, we did a condom for the 1998 World Cup in red and white, the colours of the England football kit. It had the tag line ‘shoot safely.’ It was completely tongue in cheek, it even got on page 3 of The Sun, but it sold quite well.

Who do you admire most in retail?
Kate Swann, WHSmith chief executive. She is one of the few people in business who isn’t afraid to make her job smaller. When I joined as the financial director at Argos, Kate joined at the same time as managing director. She focuses on the key issues and is clear about what she wants. She is a great businesswoman. She has turned WHSmith around and re-educated the City that it’s not all about like-for-like growth.

What is your proudest achievement?
Leading the team that created Tesco Direct, and not ending up on Watchdog – it was a complicated thing to lead.

Where do you most like to be when you’re not at work?
I’m a family person. They all live in Southampton, so I visit them often. I like travelling, singing karaoke and watching reality TV shows. My favourite show is Harry Hill’sTV Burp.

What would be your dream job (apart from your current position)?
I’d love to be an actor in a soap, or a TV presenter.

What is the best thing about working for M and M Direct?
The location in Herefordshire. It’s a bit of a hidden gem.

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