Having spent 17 years at Marks & Spencer in a number of buying roles and senior management positions – a brand synonymous with own branded products - some might say John Cheston is the ideal man to oversee Australian stationery brand Smiggle’s UK expansion.
Cheston spent almost three years in Australia as CEO of Country Road and Webster Holdings, then joined the Just Group as Group General Manager of Smiggle in 2012 and now travels from Australia to the UK every six to eight weeks to work on its Australian portfolio and its soon-to-be UK portfolio.
He is aiming to open 200-250 UK stores over the next four to five years with 2,000-4,000 staff to work for the brand. Its UK stores will average 1,000 sq ft – around a third larger than in Australia (646 sq ft.)
“We’ll go hard on the shopping centres to start with. Westfield, Stratford City will be the first store, and we’re close to signing deals with Reading Oracle, Kingston Bentall Centre and then Bluewater,” he says.
Cheston says by the end of November 2014, Smiggle will be trading with at least 15 landlords and claims “sufficient support” from big players Intu, Hammerson and Land Securities. He hopes to bolster that number to 30- 40 by the end of 2015. Smiggle has a policy of no franchising and no character licensing with all goods shipped over from the Far-East.
But isn’t the UK stationery market already saturated? Cheston believes that the UK market is fragmented and that Smiggle can offer its audience something different.
“The atmosphere that we try to create in-store is quite different (to the supermarkets and other retailers) and less commoditised. If you go to WHSmith, it’s got a reasonable offer of pencil cases but is sold in quite a formal way, and Ryman’s is the same. There isn’t one dominant major player that does what we do,” he tells Retail Gazette.
Cheston says staff engagement at Smiggle is “quite high” and proclaims that its products are all about colour.
“There are product demonstrations in-store, and there are gimmicks but we’re definitely not just about pens, pencils and pencil cases,” he says.
Smiggle’s product range mainly consists of stationery but also features jewellery, watches and socks.
He is dismissive of a Paperchase/Smiggle war on Britain’s retail space. “If you go to Paperchase you can get your Filafax, adult diary, cards for condolences and birthdays so we’re different. For four-fifths of the year they are more of an adult stationery brand. (With Paperchase) they’d be a little bit of overlap, but we can trade alongside them and we have a lot of respect for them.”
Trading as a 100 per cent own-brand, Smiggle operates 150 stores in Australia, 23 in New Zealand and 17 in Singapore.
Cheston is confident that ASX listed Group Premier Investments (who own Smiggle), has the capital needed to succeed in the UK and take “prime locations” across a range of areas.
“We’ve been successful with a zero compromise on the location we take and we are pretty strict with that. That would necessitate a combination of shopping centre, high-street and some of the railway and train stations.”
With concerns that young children are spending too much time on the computer, which could lead to some not learning how to use a pencil, Cheston is convinced that parents will like the brand because of its wholesome proposition.
“A lot of parents these days want their children to spend less time on the iPad or a computer game so I think parents like their children coming to spend their money in Smiggle. Kids need to learn to write, but we’ve got to keep relevant and make sure we’ve got lots of product innovation.
He adds: “You see kids coming into our stores with a money box, it’s quite sweet and wholesome – we like wholesome.”
Learning and behaviour specialist, Noel Janis-Norton, backs up research that excessive screen time is not good for children.
She says that children’s social skills are delayed by screens, that children read less, take less exercise and that their concentration is impaired as a result. “As a guideline, children from eight onwards should be in front of screens for a maximum of one hour a day,” she adds.
There are no plans to roll out a sizeable e-commerce operation; Smiggle currently only crank up their online offering over the busy Christmas and Back to School periods because its average transaction level is relatively low - around £15. He says: “(In busy periods) parents don’t mind paying a postage charge if they’re putting down an average of £50/£60. But they baulk if they’re putting down £10.”
So can Smiggle make it in the UK like it has in Australia? Cheston is convinced that Smiggle has what it takes. “I don’t think there’s a country on this planet we’ve not had an inquiry to franchise so we believe that it’s a brand that could go global, he says. “It could quickly become bigger than it is in Australia.”