Angela Spindler likes to refer to her company as “one of retail’s best kept secrets”, and even she had to conduct some research on The Original Factory Shop before accepting the role of CEO at the firm back in January 2009.
Despite boasting a portfolio of 176 UK stores and its senior management identifying 500 to 600 potential locations nationwide for its retail offering, the non-food discounter remains under the radar of many due to its focus on opening outside primary centres.
Favouring towns with isolated catchment areas and relatively low populations, the company has been able to steadily increase its presence over the last decade by becoming integral to the communities in which its stores reside.
It is in the last two years however, following Woolworths’ collapse at the start of 2009, that the business has really started to establish itself as a regular go-to place in smaller high streets up and down the country for people looking for fashion, homewares and electrical appliances.
Many of the units it takes on have been left vacant by failed businesses and some stores have even been opened in old garages and petrol stations, so it is effectively regenerating regions by its very presence.
And in areas, including the likes of Frodsham in Cheshire, Stocksbridge in South Yorkshire and, most recently Ramsey near Peterborough, the value chain benefits from the convenience factor it offers its customers.
“I always have to use the phrase “near to” when talking about the towns we are opening in,” Spindler told Retail Gazette.
“Commercially, targeting smaller towns is a good strategy because people like the option of shopping locally as part of their repertoire of shopping experiences.
“Our shoppers will also visit supermarkets, a mall or a retail park – we are just part of their repertoire but a really important one for them.”
Part of the attraction for The Original Factory Shop customers is the plethora of clearance products up for sale, which account for around 30 to 40 per cent of all stock depending on the time of the year.
The company’s roots are in Keighley, Yorkshire, where it was established in 1969 as part of Marks & Spencer (M&S) supplier Peter Black’s, and to this day, from its new headquarters in Burnley, it sells overstock from retail giants such as Next and M&S.
Although not in direct competition, it follows a similar model to fashion specialist TK Maxx in offering significant reductions from the recommended retail price, but they clearly have different target markets.
“We are more high street rather than designer brand,” Spindler explained.
“TK Maxx sells high-end brands for mid-market prices, while we’re taking mid-market brands and selling them at discount prices.”
Sales were up 16.4 per cent annually to £158 million in the last full financial year, fuelled by rapid store growth in the wake of Woolies’ demise, although the company has not been immune to the difficult trading conditions encountered since the beginning of 2011.
“Due to our product range having a strong focus on fashion, we were affected by the pretty miserable summer weather and the warm autumn conditions, but that will always impact seasonal products,” the CEO admitted.
“Since the start of July we’re in positive territory though, with trading up on a like-for-like basis.
“Online is always the biggest store now even though it’s only been going since April.
“In a store we would have thousands of SKUs and online we only have 600, but in a typical week the internet channel is contributing to two per cent of our growth.”
Growth driven by internet sales is a familiar tale frequently retold at many of today’s multichannel retailers, but trade via the web at The Original Factory Store is aided by a unique take on ordering online.
Some 35 per cent of web sales at the company are conducted in stores with the help of a sales assistant, a process that results in the products being delivered to a customer’s home – it is essentially a click & deliver system played out in a physical store.
It is yet another feature of the business tailoring its offering to its local markets.
“Our customers like face-to-face contact and that they are still paying someone in the more traditional way – it makes them feel more comfortable,” Spindler remarked.
“It’s the payment part of online that puts them off and not the fact they want to touch a product before buying, which is often cited as a barrier.
“The system also allows people to pay in cash, and this has resulted in a huge pick-up in our online business.”
Spindler has gained vast experience across various divisions of a number of leading FMCG and retail companies, which should prove invaluable as she embarks on a journey to steer her company’s ship through retail’s current choppy waters.
In her early career she worked at Coca Cola, Cadbury and was then at Mars for ten years. In the early 1990s she followed Allan Leighton to Asda and was there for a decade which included roles in marketing, food trading, property and store development.
Spindler was Managing Director of the George clothing brand during the last two and a half years of her spell at Asda, before spending a short time on the board at Debenhams during the most recent recession.
Her time at the department store group was short-lived due to various cost-cutting measures undertaken by the firm, but as the British economy moves precariously closer to imploding into another recession the experienced retailer is confident that she will not get her hands burned at her current employer.
“When I was first approached about this job my initial reaction was “who?”, but I did some digging and realised it was an amazing proposition.
“It was absolutely spot-on in terms of what was going on economically and in terms of retail – it was also a growth story, something you could build.
“It had all of the things that excite me about retail and so it has proven since I took the role - it is so much more hands-on than anything else I have done.”
With momentum building and ambitious targets for store growth set by the senior ranks, The Original Factory Shop could be coming to a small town near you very soon.