Reaching Out

Hobbs knows exactly what to do for its niche customers in the UK, but the fashion and footwear retailer is expanding product and global positioning to find a much bigger audience. Hobbs is a small business with big plans. The nic

April 6, 2018

Reaching Out

Hobbs knows exactly what to do for its niche customers in the UK, but the fashion and footwear retailer is expanding product and global positioning to find a much bigger audience.

Hobbs is a small business with big plans. The niche fashion and footwear retailer on the premium end of the high street started life in 1981 with a store in trendy, affluent Hampstead in north London. Today it has revenues of £100 million from over 120 locations, and standalone stores as well as concessions in department stores across the UK and Ireland. It also has a growing portfolio of franchise stores in the Middle East and Asia.

As the business steps up retail expansion in the United States and China, it is also extending the brand. It has operated a small wholesale business for its fashion and footwear collections for many years in the UK and in Ireland, and is now pursuing growth through licensed product.

Hobbs describes its offer as "unique in the British fashion market," as it allows customers to put together complete outfits—fashion, footwear, and accessories—designed to complement one another. It is strong on workwear and party fashion, and is the first stop for wedding-guest outfits.

Hobbs describes its offer as "unique in the British fashion market," as it allows customers to put together complete outfits—fashion, footwear, and accessories—designed to complement one another. It is strong on workwear and party fashion, and is the first stop for wedding-guest outfits.

Hobbs has an "English look" but with a contemporary twist, with a strong emphasis on quality fabrics and manufacturing. Among the most unusual aspects of its profile are that it owns its own footwear factories in the Marche region of Italy, enabling it to sell top-quality footwear at a reasonable price level, and even still manufactures some of its tailoring in the UK. It claims that 80 percent of its customers are repeat buyers.

The business is led by CEO Nick Samuel, who was part of a management buyout backed by Barclays Private Equity in 2002 when he was managing director. The business was refinanced in 2004 when 3i took on the business when it was marked with an enterprise value of £111 million.

A management restructure has recently been completed, which leaves Samuel with the task of concentrating on the strategic growth of the brand, including extensions through licensing, as well as stepping up overseas growth.

The new structure has included the promotion of Nicky Dulieu to chief operating officer from finance director, and the appointment of Chris Easteal as finance director, who joined from Olympus.

A further key senior appointment has been made on the design side of the business. Sandy Verdon has joined as creative director with responsibility for the design and creative vision of the brand. She previously worked as creative director for the resurgent Jaeger brand. Verdon replaces Karl Henry, who is retiring this spring after 18 years at Hobbs. Prior to Jaeger, Verdon also led the design team at fashion brand French Connection, and was a designer and buyer at multiple retailer Next.

Hobbs has also appointed an in-house head of marketing and public relations, outside public relations agencies for fashion and home product, and reorganized its regional retail managers' team, together with moving into a new distribution center.

Samuel says, "In the past, we have been reactive in the way the business has grown; now we need to put a strategy in place. Part of my role now is to look at markets, when necessary with an outside consultant, analyze and research, and then decide what's the best way forward for Hobbs."

The first license deals are already in place. These cover home, with a collection of bed linens and towels, as well as eyewear.

The Hobbs Home collection is a joint venture with Turkish supplier Sabanci, currently sold through department stores in the UK. The first eyewear collection, supplied by Andrew Actman, was launched at the end of 2006 and is being expanded this year to some 30 designs. It is largely sold through independent opticians in the UK only.

Andrew Actman is also the licensee for branded eyewear for UK fashion retailers Oasis, Reiss, and Karen Millen, the latter where Samuel was formerly finance director.

Going forward, Samuel says, "We are looking at a cautious expansion over the next 12 months. Obvious areas for licensing are body care, cosmetics, and fragrances.

"Our customers are typically between 35 and 55 and living with their children, therefore we are also thinking about kidswear. This could be a new line from ourselves or through a license deal."

Hobbs already sells accessories, currently brought in from other suppliers, and this area could be expanded, too. "We already sell bags, bought from Italian suppliers, so maybe we have an opportunity to sell luggage," he says. "It's invaluable that we already have a presence in Italy through footwear manufacturing."

International Focus

Hobbs started its international expansion several years ago. It works with franchise partners Jawad Group in Dubai, Qatar, and Bahrain; in Hong Kong with GRI, which is part of the Hong Kong-based Fang Bros. empire; and with Goran Wijkmark in Stockholm.

The 2008 expansion strategy includes opening in the United States, China, and Japan. Samuel is exploring the United States market with retail consultant Simon Dallimore of New York-based Dallimore & Co., who has also worked with UK fashion retailers Reiss, Jaeger, and Agent Provocateur in their U.S. businesses.

By the end of this year, three concessions in stores in China are set to open, together with one store concession in Japan and a further store opening in Dubai. Development of the business in Europe is also on the cards.

Samuel's mantra of "research, analyze, and decide" applies on the European continent, where Hobbs is yet to have a foothold. He is looking at which markets offer the best fit with its premium high street positioning. "There is potential for the business in Italy, particularly as we already have a base there through our footwear. Looking at Spain, I would probably say yes, and yes to Scandinavia, too. Germany could be more difficult." The first steps in Europe will come later this year when Hobbs will open concessions in as yet unnamed European department stores.

A Click Away

The two-pronged attack of retail and product expansion was joined by a third element in November last year when the Hobbs Web site became transactional.

It launched with about half of the full range and that has been increased over the past few months with the aim to offer the full spring/summer 2008 collection online as well as in-store. Hobbs is fulfilling the online orders direct from its new distribution center—another piece of the jigsaw put in place to support expansion during 2007. Currently the site only takes orders from the UK, but this is another area for future development.

The Web site is being used to cross-promote between stores and online this season and will enable the business to gather much more information on customers. However, it has already thrown up some surprises. Some 90 percent of Hobbs customers are working women and a high level of deliveries from the Web site are to Hobbs stores. Women, it seems, are shopping online from home, but are having clothes delivered to the store that is closest to their workplace. There they can try on the garments and return them immediately if necessary. Samuel expects this return type to reduce as the online business matures.

"No amount of research could have told us how customers would behave when we launched online," he says.

The business is strong on customer service with a tight training scheme that promotes excellent product knowledge so that staff can help customers put entire looks together. The Web site offers the same service—showing complete outfits and making it easy for shoppers to buy the whole look. But the cautious approach shows through here, too. "We will take the Web site further," says Samuel, "but only when we are confident that we can deliver the product and deliver the full Hobbs experience."

While Samuel says that he has already made a case for both international expansion and brand extension, the structure of how either will go forward will depend on what's right for that country or product category. "While we will develop the wholesale business alongside the store expansion, we are still exploring the routes—whether that is licensing, buying and selling ourselves, building on our own existing wholesale business, or using distributors."

He is conscious of the problems of counterfeiting and copying that have emerged for other brands that have used the licensing route and is sensitive because Hobbs has already had problems in Italy, Greece, the United States, and Canada—countries it does not currently supply. "We use watching agencies. It's a compliment in some ways to have our product copied, but not one we want to encourage. Unfortunately the urge to copy comes with internationalization. There will be people who see it as a quick way of making money."

Despite the tough trading conditions, Samuel is upbeat about the prospects for 2008 as his growth plan falls into place. "We're all set for 2008. Trading will be a challenge, but I predict that by the second half things will be more optimistic. We need to work even harder, make the product better, the windows more eye-catching, and keep on delivering the Hobbs experience."

And if that is what Hobbs achieves, its name will reach out globally.

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