To win in retail, be a specialist not a generalist
The Australian retail fashion industry is experiencing the type of unprecedented change that can make or break seasoned operators overnight.
Matt Jensen, founder of MJ Bale, and Tim Cecil, managing director of Henry Bucks, are living proof that in the local garment game, bespoke management strategies are key to sustainable success.
MJ Bale generated sales of approximately $20 million for the 2013-14 fiscal year, having refined its retail offering to focus solely on menswear. It is a miraculous recovery for Matt Jensen whose first business, Herringbone, went into voluntary administration in 2008.
Family and friends who invested seed capital in Jensen early in 2009 have generated returns in excess of 300 per cent on their initial outlay. They were joined last month by a new set of retail investment veterans, including David Briskin, Daniel Besen, Ross Lane and Nick Fairfax.
Taking a different tack, family-owned menswear retailer Henry Bucks is resisting investment from outsiders. Managing director Tim Cecil, a fifth-generation descendant of the company’s namesake, says there have been regular conversations regarding other investors but is cautious of the potential perils of venture capital.
‘SPECIALISTS WILL PROSPER’
MJ Bale’s new investors expect healthy returns, keeping Jensen faithful to a clear, concise strategy.
“We’re pleased with our recent growth and the acquisition of a new, experienced team of investors, but we’re not stopping; we’re pushing on,” he says.
MJ Bale currently has 14 stores across Australia, employs 60 staff and has forecast growth of greater than 50 per cent for 2014-15.
However, the company is not afraid to experiment – MJ Bale has tailored the world’s first suit with a smart payment chip sewn into the sleeve.
Cecil, on the other hand, is more casual and more conservative regarding growth. He is currently undergoing the evolutionary process of transitioning the family business from generation to generation. Henry Bucks has six stores and about 60 staff (most of them on the shop floor) and is focused on consolidation rather than major growth.
“We’ve just renovated our Collins Street flagship store; we’d be looking at improving all retail points of sale and we’re relaunching our website,” Cecil says. “It’s more about doing what we do now but doing it even better and trying to stay ahead of the game.”
Jensen’s advice to anyone wanting to start their own business is simple: be passionate and do what you love. He also believes that in this market, specialists will prosper while generalists will struggle.
Cecil agrees that specialisation is important but also sees diversification as an area that can help profitability, pointing to Henry Bucks’s gift business as a working example.
“We’re a total men’s outfitter. We stock everything from underwear to suits to shoes to men’s accessories, both casual and formal,” he says. “And we also have a gift business that we’ve had for almost as long as we’ve had the men’s business. At Christmas we sell a lot of gifts for everyone in the family.”
*Original Article by Scott Parker: http://www.brw.com.au/p/business/mid-market/founder_win_matt_retail_jensen_specialist_EEl80i4XgNkjCmQQHdJnpI