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Harvey Nichols to target young fashion market
Harvey Nichols is to target new markets and is changing its marketing communications as part of wide-ranging initiatives it is undertaking to adapt its business to trade through the current downturn in the retail industry.
By Glynn Davis in Barcelona
Speaking at the World Retail Congress in Barcelona Joseph Wan, chief executive of Harvey Nichols, told delegates that following the 40 per cent sales drop the group experienced in the second half of 2008 he took the decision to implement a number of changes. This began with communicating the collapse in trading earlier than he would normally disclose the company's annual financial figures.
"The purpose was to get this out of the way and to
With sterling at low levels a plan was devised to advertise to tourists in 2009/10, with an allocation of marketing budget assigned to be used specifically for the more tourist-focused stores in London and Edinburgh."We never did marketing and communications to tourists, they were simply a bonus, but we know that if we get a higher number through the door then this will compensate for the lower local spend," says Wan.
He also recognised that continued strength in trading at rival fashion operators focused at the younger end of the market, which is less affected by recession. The decision has therefore been taken to cater for the 15 to 21-year old consumer group. This will involve closing the fourth floor of the flagship London store, which currently sells gift products, in August and refurbishing it for selling younger fashion ranges with a re-launch planned for 2010.
Wan says Harvey Nichols is also using the downturn to focus on operational best practice, which he says had been overlooked in some respects with the earlier concentration on simply growing sales. He is to look at the mix of part and full-time employees and the percentage of concessions in the stores. The overall objective is to achieve further profit growth and to put the 40 per cent decline behind it.
Richard Simonin, chief executive of Etam, also put forward to delegates his three key considerations for trading through a downturn - getting back to retail basics, store concepts, and communications strategies. He suggests retail basics involves reviewing processes, focusing on core activities and considering selling non-profitable stores as well as exiting unprofitable markets.
Store concepts have proved important to Etam, which has successfully grown sales through a number of new store types. "We needed to strengthen the experience and use new concepts with the first move made 12 months ago," says Simonin. The new concepts have included a lingerie store in Paris 'Vos jous, Vos nuits'; the 'Greenwich Concept' Etam-branded store that sells ready-to-wear clothing and has enjoyed a 15 to 30 per cent uplift compared with the rest of the chain, and the 'Undiz' branded lingerie stores that target the younger end of the market with products 50 per cent cheaper than in mainstream Etam stores.
The third key focus for surviving the downturn, according to Simonin, has involved adapting the group's communications with consumers. It has been changed to "create more desire, re-inforce the proposition and to build the brand for the future". Part of this has involved using a "muse" (a fashion model named Natalia) who Simonin says has helped the group "deliver more for less" since it is achieving its communication objectives with 25 per cent less budget than it spent in 2008.
Tagged as: Harvey Nichols | Joseph Wan | Etam | Richard Simonin | World Retail Congress
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