In an increasingly competitive and fast evolving retail climate, rising sales and ambitious UK and international expansion plans are to be applauded.
Fashion and homewares specialist Cath Kidston is one such case, reporting a 24 per cent rise in total sales over the Christmas period while also expanding overseas during the last quarter.
Kenny Wilson, Cath Kidston’s CEO, told Retail Gazette that it is the brand’s unique proposition which is driving growth both at home and away.
“Our growth in the UK is driven by a couple of things,” he told us.
“The first is expansion of stores as in the last 12 months we’ve opened another 10 stores in the UK which obviously helped our total sales growth, but I think the other important driver is the uniqueness of the Cath Kidston brand.
“There is not a direct competitor to us out there on the high street as we’ve got a very broad product assortment - we offer accessories, homewares, kidswear and garments -while we are also really broad in terms of age appeal. We know that we sell as well to 16-year-olds as to 46-year-olds and 65-year-olds which I think is a major advantage.
“And I think the other thing in challenging economic times is we have breadth in terms of price appeal. In terms of our Christmas trading ,we have a broad category, broad customer appeal and broad price appeal which I think is key to our success.”
As more and more retailers continue to eye international expansion, the burgeoning Asian market is proving an area of particular focus for luxury and British heritage brands as consumers’ appetites for UK retail strengthens and Wilson explained that the retailer has managed to capitalise on the trend.
He said: “When you look internationally, we had a really strong year in Asia and that’s continued through Christmas in all of our core markets; Japan being our number two market. We had very good Christmas trading in Japan and the same in Korea, Thailand, Taiwan and Hong Kong, while post-Christmas, we launched in China towards the start of this month.
“The quintessential British nature of the brand, the quirkiness of the brand and the product appeal and continual new products are what interest our Asian customers I think. The Asian markets in totality love the essential Britishness of Cath Kidston so it is such a growth opportunity for us. We now have 31 stores in Japan, 10 at the last count in Korea and we can see that it isn’t just a single country appeal in Asia but a regional appeal, so we saw that we had a big opportunity to go into China in the years ahead.”
The retailer chose to open its first Chinese store in Shanghai due to its “vibrant and creative atmosphere”, Wilson noted, and a second store in the city opened earlier this week. Of course, such rapid expansion requires huge internal organisation and Cath Kidston has focused significantly on strengthening its senior management team in order to support growth.
Following Wilson’s appointment in the summer of 2011, the brand recruited ex-Monsoon Accessorize director Daniel Poppleton as its International Director, who joined the team with substantial experience in the Asian market having lived in China for three years and overseen his previous company’s expansion into Hong Kong and Shanghai.
Next, former Mothercare Finance Director Neil Harrington was appointed as Cath Kidston’s Chief Financial Officer, having played a prominent role on the board of Mothercare’s Indian joint venture while also sitting on the board of its Chinese business.
Supply chain and marketing were also a strong consideration moving forward and as such the retailer recruited ex-Levi’s Global Supply Chain Director Geert Peeters and Andrea Moore, who had previously operated as Vice President of Marketing & Product at Molton Brown.
“It’s always easier if you’ve done it before as you know the pitfalls and the questions to ask,” Wilson said of the considerable experience of his team.
“For us, stage one was strengthening the organisation and bringing in leaders who have done it before; then in terms of expansion, over the next 12 months our focus is on the UK and Asia.
“We think that we have real potential to open more stores in all of the territories we currently operate in and China is obviously a big long-term venture for this organisation and has massive potential for us. If you think we’ve now got 60 stores in the UK, five to 10 years from now how many stores could we have in China? I believe in doing just a few things and doing them really well; we could expand the brand anywhere at the moment but our choice for the next 12 months is to focus on Asia and the UK.”
Like all retailers however, Cath Kidston is also committed to growing its multichannel presence though Wilson believes that the retailer’s original online strategy sets it apart from others. While the majority of retailers build their bricks and mortar operation before launching in the digital space, Wilson notes that Cath Kidston added a website while still operating from a relatively small number of stores.
Similarly, when the retailer opens a store in a new geography, short-term web sales fall back as they are overtaken by in-store sales, a temporary but telling trend, said Wilson.
“Over time, we have seen those customers come back to buying online again so for me we are true multichannel business. Our customers will go in store, experience the brand and buy online while some days they just buy online and others - particularly with garments where shoppers want to try the product on before they buy it - they go in store.
“What we know for sure in terms of our market research and purchasing history available on our database is that the customers that buy online and in store are our most loyal customers with the highest purchases on a permanent basis. So the idea of needing to have both a store and online proposition is proving a reality for this brand; great stores supported by a great website is helping to make us successful.”
While Wilson is focused on identifying future opportunities for the brand, 2013 is also set to be a year of retrospection for the retailer, which will celebrate its 20th anniversary later this year.
Commenting on plans for the event, Wilson said: “We’ll be bringing out a book in April to celebrate 20 years of the business and will be bringing out new product. April marks 20 years since Cath founded the company and September will be 20 years since the first store opening in Holland Park, so we have two opportunities for celebration this year.
“It’s a big year for us and 20 years is significant for a brand as it shows we have longevity. The challenge is to think: ‘how successful will we be in another 20?’”