Shirt-maker and formalwear specialist Charles Tyrwhitt is on course to report a significant increase in sales this year, and is gaining a reputation as one of the fastest growing UK retailers in terms of annual profits.
Founder and CEO Nick Wheeler, whose middle names gives the company its title, says there are no signs of his business, branded as “quirky British”, slowing down any time soon.
Strong sales and impressive profit figures do not come by accident though, and it is important for the businessman to keep his finger on the pulse of the sector he works in - something he argues some retailers do not do enough.
“A lot of retailers don’t focus on the competition but to do well all you have to do it do better than your rivals,” he tells Retail Gazette.
“It is simple. You need to look at what they are doing and make damn sure you are better than they are.
“If you give better quality, service and value than your rivals you will do well.”
The competitive approach appears to be paying off, with the Sunday Times’ 2011 Profit Track placing Charles Tyrwhitt in the top 15 UK medium-sized companies in terms of profit growth last year. There are also expectations that an impressive two million shirts will be sold by the firm in 2010/11, a trading period which ends this July.
“We reported profits of £7 million in the last financial year, and with US figures added total profitability is just over £8 million,” Wheeler explains.
“Sales are currently up 40 per cent on last year but we’ll do £85 million this year against £64 million last year, which represents around a 34 per cent increase.”
The slight slowdown in sales growth as the financial year draws to a close is attributed to the fact Charles Tyrwhitt is running slightly low on stock, but this is all part of a measured buying policy that has allowed the retailer to keep prices down despite cotton costs rising dramatically in the last 12 months.
Perhaps it is also an indication of the popularity of the retailer’s shirts, which Wheeler suggests boast both quality fabric and shape, and are not cheap.
In September last year the company made the brave decision to keep retail sales prices the same despite soaring material costs and the inevitable pressure this would put on margins. Many other businesses passed on these fees to consumers.
Wheeler, who is married to White Company founder Chrissie Rucker, states: “Cotton prices have gone through the roof but we have tried to keep prices the same - margins take a hit but we hope to sell more products because of our price offer.
“We were aware of prices rising at an early stage because we buy quite far ahead - we bought well and now sales are exceeding expectations.”
Trading channels at Charles Tyrwhitt come in three forms - a mail order operation, which the business was founded on back in 1986 when Wheeler was at Bristol University, its 16 stores and online.
Seven of the shops are in London, including some prime locations for men’s formalwear shopping such as Regent Street and Jermyn Street, while there are six other outlets across the UK, two in New York and one in Paris.
“Because 75 per cent of our business is conducted through mail order or on the internet, we want our stores to stand out and they have to have high footfall,” the CEO remarks.
“We don’t want a store in every high street. Outside of London we have locations like Kings Street in Manchester, which is an iconic shopping street and sits well with our quirky English brand.”
Personal evidence suggests that this is working. When Retail Gazette visited the company’s Jermyn Street store on one of the plethora of April bank holidays this year it was one of the busiest shops on the road, and the staff were highly attentive and helpful.
British iconography such as the red letter box is a feature of the store, adding an element of retail theatre which makes it stand out from other retailers in its marketplace.
Setting up in this manner means Charles Tyrwhitt does not just appeal to one particular demographic, which is another key part of the retailer’s strategy.
“When selling shirts you have to be careful not to focus on too smaller proportion of the population because you won’t sell enough items,” says Wheeler.
“We try not to be too specific and we try and have a product that appeals to a broad section of the nation.”
A selection of the retailers appearing alongside Charles Tyrwhitt in Sunday Times’ Profit Track list have either recently been the subject of a private equity takeover or have been linked to one.
Fashion and homeware specialist Cath Kidston, crafts retailer Hobbycraft and high street value retailer Poundland have all been acquired by these type of companies in recent years, but Wheeler does not appear to have similar plans for his company just yet.
A store in Edinburgh will open in the coming months and the general game plan is for three to four new outlets to be added each year in the foreseeable future - steady growth, but a proven successful formula.
“I started 25 years ago and hopefully I’ll be doing the same thing in 25 years’ time,” he said.
“I believe in the long term, and I believe it is always going to be quality that decides whether you survive or fail.”