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On the shop floor with......TM Lewin chief executive Geoff Quinn
Only a handful of years ago the head office of shirt maker and retailer TM Lewin was above the shop on Jermyn Street and the occupants within oversaw around two handfuls of stores.
By Glynn Davis
Today TM Lewin is a very different beast. Its HQ is in a glass-plated building in Farringdon and the portfolio encompasses 67 shops plus eight concessions. And it is not just about shirts anymore as they now account for less than 50 per cent of total sales, with the rest derived from men's suits, accessories such as cufflinks and shoes, and ties.Presiding over this growth is chief executive Geoff Quinn, who admits that entering the one-year old office and surveying the 100 employees working on an array of new colourful designs makes him feel like Willy Wonka.
The transformation of the company with Quinn at the helm is not quite out of the pages of a Roald Dahl book but it is pretty impressive. Whe
Annual sales are now at the £63 million mark, with ebitda (earnings before interest, tax, depreciation and amortisation) of £9.1 million, but Quinn still reckons there is plenty to go for: “Whenever I lay down long term plans I see another opportunity and the plan then gets bigger.”
What has prompted his current belief in bulking-up the plans are the massive structural changes made in 2007 that are now providing the business with a platform from which it can really spread its wings. So chaotic have been the changes that Quinn appointed an ex-Asda man Keith Nesbitt (who had been involved in change management) as chief operating officer.
His remit included the redevelopment of the shop-fit, moving the head office, outsourcing both the distribution warehouse (from Basildon to Leeds) and the mail order call centre, opening 16 new stores, and most tellingly introducing the company's first merchandising system.
“From January this year is the first time I've known what is in the shops. Previously it was Excel and nous - we've some good nous in the business. But the technology has really opened my mind to the opportunities. Effectively we've been trading blind for 28 years and now we've got information at our fingertips,” he says.
One of the first manifestations of this new power was the doubling of the number of new shirt designs that hit the stores each month from 70 to 140. And the new tie designs have been increased to 50. Quinn explains that it is not only the technology that makes this possible but the fact TM Lewin handles all design in-house.
And this is not the only thing. When walking around the office with Quinn, he points to the in-house tie designers, tailoring department, quality control, mail order team, catalogue designers and cufflink designers.
“I've made it my job to cut out every middleman and even though we don't manufacture anymore we specify the construction of the fabric. We oversee all this. The best thing in business is to have knowledge because if you understand the products then you can understand the cost price. We've been obsessive about the product and believed that the business would then follow,” says Quinn.
This focus on price, while maintaining the quality and values of its Jermyn Street heritage, has enabled the company to develop a model whereby its very competitive pricing helps it drive up volumes which brings in more benefits from economies of scale.
The most obvious example of this strategy is its ongoing 'four shirts for £100' proposition, which Quinn says is a “very, very big part of the business”. So much so in fact that even though many shirts are individually priced at £65 and £79 the average price per shirt sold is £27.
The company's keen pricing has been an important component of its expansion that has seen it open stores throughout the UK including a number of high profile shopping centres, which would have probably been unthinkable a few years ago. “People think it costs £50 for a shirt but with the four for £100 we've been able to change from Jermyn Street to mid-market,” he says.
This “more approachable” formal shirt retailing has given the company the confidence to expand further and Quinn says a pipeline of stores has been identified (down to individual street level) and he is hopeful that the current economic climate will “free up space”.
The company could also look to roll out its Express format stores, of which there are four in London including Waterloo station. They occupy only 370 sq ft compared with the optimum 1,400 sq ft of a new TM Lewin store and are designed for impulse purchases of men's and ladies shirts, cufflinks and ties.
Expansion is made possible because he says, unlike many retailers, TM Lewin is still “growing at a fair lick” despite the downturn. “We're having a good year, with like-for-likes up. We're ahead of plan for the first six months, to August, even though we are behind on store openings,” he says.
He puts much of this down to the efforts of 2007 that Quinn says has given the company many of the tools that other retailers have long taken for granted. “This year's good fortune is down to last year's hard work.”
Despite its previous lack of merchandising and stock control technology the company has been operating on the internet for some years and it is now, not surprisingly, the fastest growing element of its mail order division, accounting for 80 per cent of its £10 million of sales.
The growth in internet sales would look very impressive were it not for the fact that strong growth is also being experienced in every other part of the business, says Quinn, who right now must be parked in one of the most enviable seats in retail.
glynnd@theretailbulletin.com
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