The contrasting fortunes of two of the most familiar names on the high street suggests that concentrating on a core customer base may be the safest strategy for retail commercial properties in the current economic climate. The troubled Blacks Leisure Group recently announced that the company was for sale following its failure to raise the money to fund a revamp of its stores and satisfy the banks.
Meanwhile shoe repairs and key cutting store Timpson has revealed plans for a large expansion of its business during the current financial year. Both retailers have histories spanning back to the nineteenth century and have prospered by catering to niche markets. But while Blacks has struggled to maintain its identity Timpson has remained focused on its core business and continues to prosper as a result.
The origins of Blacks Leisure Group lie with founder Thomas Black who went to sea in 1848 aged just 12. In the outdoor adventuring style the company subsequently built its brand upon he spent time gold digging in Australia before returning home to set up a sail making business in Greenock. Over the years the firm grew and supplied camping equipment to the armed forces during the Second World War.
This rapidly became the company’s core business and, following a series of mergers, Blacks became the UK’s leading outdoor retailer with over 300 commercial property outlets nationwide. The group operates a number of brands including Millets and has been attempting to attract £20 million in investment following a fall in sales and warnings that recent mild weather will result in lower than anticipated Christmas trade.
It has now conceded that it will not be able to achieve this target and has issued a statement saying the company is for sale. Shareholders have been warned they may not receive any money from the sale and the value of the group’s shares has fallen by 50%. It is hoped the sale – which could see the entire group or one or more brands sold – will be completed by January.
Competition from rivals and supermarkets has had an impact on Blacks sales but analysts suggest another reason for the group’s difficulties. Some say Blacks problems are due to the company losing touch with its customer base and allowing its brand identity to become diluted. “Is it a hiking/camping store, or does it cater to extreme sports enthusiasts? No one is really sure;” an expert told the BBC.
In contrast Manchester based Timpson, which was founded in 1865 and remains a family run firm, has announced plans to open around 70 new commercial properties over the coming year. The group has already opened 30 outlets during 2011 and has seen revenues rise by 4% with pre-tax profits forecast to reach £12 million. Timpson acquired the Max Spielmann photo shops chain in 2008 but has never lost sight of its core business.
The company Chairman, John Timpson believes this year’s robust performance have been achieved by focusing on customer service; “I put it down to the fact we have really good people and we seem to be providing what the public wants;” he told the Manchester Evening News. He also added that the recession may actually have helped Timpson as it has encouraged consumers to adopt a ‘make do and mend’ attitude as family incomes are squeezed.