The big interview
With 58,000sq ft of trading space across nine floors in four buildings, Austins dominates towncentre retailing in Newton Abbot, Devon. David Austin explains why he believes in investing heavily in his independent department store.
Mohamed Fayed is probably not aware of it, but he played a vital role in the growth of Austins of Newton Abbot in recent decades. Shortly after the controversial Egyptian and his family acquired the House of Fraser group in 1985, he started closing smaller regional stores. In 1988, the branch in Newton Abbot was axed.
Almost 30 thirty years on, David Austin recalls this as a turning point in the development of his family’s business. “It’s odd to think that when I was a boy, the town had five department stores – us, plus Rockeys, Harveys, Laws and Wareham, and William Badcock & Son, which was renamed Dingles and became part of House of Fraser. By the time it closed, we were the only one left. We moved quickly to attract their customers, their brands in cosmetics and fashion concessions, and some excellent staff. In 1989, our sales increased by 50% as a result.”
The late 1980s saw David gradually assume the day-to-day running of Austins from his father, Charles, who had been in charge since the 1950s, having succeeded his own father, Robert Charles, who had opened a small drapers shop in Courtenay Street, Newton Abbot’s main shopping thoroughfare, in 1924.
“My father had a long-held ambition to create a walk-through department store. Through piecemeal acquisition of neighbouring properties, between the 1950s and 1980s our space grew from 3,000sq ft to 20,000sq ft.” If retailing is in the blood, then property development is too, for under David’s watch Austins has grown to today’s impressive position of having four stores, incorporating 58,000sq ft of selling space across nine floors. The quartet of buildings are grouped closely together around a clock tower that commemorates a visit to Newton Abbot by William of Orange in 1688. In its own quiet way, Austins has achieved, like the Dutch prince, something of a glorious revolution, but in independent retailing, rather than politics.
The first step on the path to expansion was the acquisition of the former Globe Hotel directly across the high street from the main store. It took three years of negotiations to secure the handsome 19th-century listed building, which after alterations was opened as the home and furniture department in December 1992. Costing £1.3m for the purchase alone, the former coaching inn, which retains an elegant staircase and other period features, added 9,000sq ft across three floors.
Looking at its attractive and spacious displays, it is difficult to imagine that all the categories comprehensively presented today, such as cook shop, housewares, furniture, curtains and soft furnishings, were once represented in the original store’s two trading floors, which are now devoted almost entirely to fashions, accessories and cosmetics.
Next to be added, in 1996, was the property about 60 yards away from the main store that today houses Austins’ comprehensive menswear department and, adjacent to it, a huge toys store and the crafts and luggage departments. An early riser, David had spotted someone opening what at the time was a vacant unit. Striking up a conversation, he discovered the property was for sale. Within two weeks, Austins had bought the double-fronted space for something of a steal – just £230,000 for what today has 15,000sq ft of trading space and a considerable stockroom area beyond that. David is quick to point out, however, that around £1m has been spent bringing it up to the impressive standard seen now.
To complete the four corners of what is marketed by the business as “Austins Quarter”, in 1999 Austins bought from the national furniture chain Courts a 12,000sq ft building about 200 yards from the main store, which houses the furniture, beds and carpets department. That acquisition cost £440, 000 and some £250,000 was spent upgrading the space during 2015/16.
Back at the main store, in 2006 a yard near the corner of the property was covered over and converted into the accessories area, while in 2015 Santander closed its adjacent branch and Austins (which had been the bank’s landlord since buying the key corner site in 2000) transformed that space into a successful lifestyle fashion area.
“The staff joke that I have a hard hat in my office, but it’s not a joke, because I do,” David admits. “Up to Christmas 2016, I’d overseen four years of non-stop building and refurbishment. Since 2006, we have spent £7m on our properties because we believe in serious re-investment.”
Customers are able to now stroll across a pedestrianised area – Courtenay Street was made traffic-free in 1993, and the rest of the area followed in 2007 – to visit all four of Austin’s recently-repainted and well-presented stores. An obvious question is why has David Austin made such an investment in bricks-and-mortar in the age of online shopping?
“The first thing is that the family has always seen our business as being part of the town, part of the community. Now, as the only department store in the town, we are a key retailer and a main source of long-term employment. We have a social responsibility to our people and we have faith in our customers. Looking to the future, we are not complacent, but we have belief in ourselves and what we offer, and faith in Newton Abbot as a town centre. We try to make everything we do as excellent as we can.”
Like many independent department stores, Austins is a member of the Associated Independent Stores (AIS). It joined the Solihullbased buying group in 1968 and uses its central payment system and does virtually half its buying through the group, also using the service of AIS buying division to outsource buying for fashion, menswear and cookshop. “It’s massively significant,” says David.
But 80% of the stores’ £10.2m annual turnover is achieved through its own buying. One third of womenswear, most menswear, boyswear, lingerie, accessories, cosmetics, linens, soft furnishings, furniture, cookshop and toys are bought directly, often using the AIS buying division. Typically for the sector, Austins relies largely on nationally-recognised brands, but new additions are always being sought.
“Stellar and Judge cookware do well for us, while in fashion our No 1 womenswear brand is White Stuff. Across own-bought fashion, we were 30% up in 2016, and [up to the beginning of June] we are 30% up again this year, especially with lifestyle brands such as Seasalt, Joules, White Stuff and Superdry. An Italian label from AIS, Luca Vanucci, is doing very well too.”
Running even a sizable concern like Austins can be a lonely experience, so David is grateful for the networking opportunities Austins’ bira membership offers: “Obviously, the financial benefits, such as the favourable credit card rates, are good to have, but it’s also great to meet and talk about specific issues with other bira members. It’s a very enabling organisation. I have got several good ideas from recent meetings of the south-west branch, which are led by Liz Lawson from Lawsons of Plymouth.”
Austins runs a lean operation. While all the properties are freehold, there is no complicated corporate structure; everything is run under one company. David is managing director, assisted most closely by store director Trevor Boobyer, who has been with the company since the mid-1980s. David’s sister, Mary White, who previously worked in personnel, haberdashery, wools and the popular coffee shop in the main store, is a non-executive director. A financial controller and human resources manager are key backroom staff, while there are 13 buyers, who are also store or department managers.
“We are the biggest independent department store in the south-west and because we are independent we can make our own decisions and move quickly,” insists David. “We are authoritative in what we do. Every department is a destination and the whole is much bigger than the departments alone.”
For an offbeat confirmation of the MD’s comments, one only has to visit the toy store, where a large separate room is devoted to nothing but jigsaws. “It works very well,” says David, who quickly adds, “but we are in the lucky position of being somewhat over-spaced in here.”
The business is run on a Swan EPOS system, which was introduced eight years ago and is the third store system installed since the 1980s. For the past 18 months, barcodes have been read at the tills giving improved information of sellthroughs and the like. Brands are reviewed on a seasonal basis with poorly performing brands dropped to make way for new ones.
The barcode system was necessary for Austins to introduce its transactional website, but David does not wish to elaborate too much about this venture, which was set up five years ago. Echoing the views of many independent store owners, all he will say is “Trading profitably online is quite a tough one for department stores.”
Back in the stores, Austins is not averse to trying new things, but moves quickly if they do not work. Last year a trial with own-buy childrenswear was ditched when it became obvious that the store could not compete with the supermarkets and the value retailers.
“The best thing we have done recently has been to expand our aspirational and lifestyle fashion,” says David. “These have become exciting areas that are doing well. Homewares has a lot of opportunities too. On everything, our prices are pitched at the middle-to-better level, but we still want to offer value. We run a good-better-best pricing hierarchy, but we are at Devon prices, not central London ones.”
A significant market town, Newton Abbot has a population of 26,000, with 130,000 inhabitants in the drive-time catchment area.
David Austin describes it as “prosperous in parts”, adding that there is a fair amount of optimism about, with new houses being built locally. “There is strength in the town centre,” he says, “but the challenge for all of us is to attract customers into town. Exeter is just 25 minutes away, Plymouth 40 mins away and they attract people who want to go to a big shopping centre.
“We need to be so attractive that people come to us. We have customers tell us they have come to us because they couldn’t find what they wanted in Exeter. We also know that there is comfort in shopping here; the staff are welcoming.”
A big draw is The Pine Room coffee shop in the main store, which was opened in the 1970s with 50 seats. Now with 160 seats and run as a restaurant, it attracts more than 100,00 customers a year. The popular scones are still made to the recipe devised by David’s mother, Elaine. (The profit margin on scones is very good, he reports).
As the boss of the only surviving independent department store in Newton Abbot, David is aware that his major challenge is how to trade a big store in a smaller town, for, as he accurately puts it, “footfall is what it’s all about”.
“Of course, there has been a polarisation towards the big centres, we have to keep our business at a certain size to keep ourselves relevant. It’s very hard truly to know your customers, but we have a feel for them. We have a passing but meaningful relationship with our customers.”
Marketing to them follows a little-and-often schedule. While local press advertising is used far less than in earlier days, direct mail is still preferred for the six or so major events of the year, such as the Winter Sale and the new fashion arrivals. The Austins database lists 30,000 names, of which about one third is active. Emails are sent out on average twice a week to keep the store front-of-mind. As with most progressive department stores, the business has at least a couple of events each week.
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