New wonder of the high street counts on family values
Alworths is a year old, and Andy Latham is more confident than ever that he is on the right track. Virginia Matthews reports.
Wednesday 20 October 2010
Twelve months since Andy Latham opened his first Alworths store in Didcot, Oxfordshire, amid threats of litigation by his former business partner and long-term Woolworths colleague, Tony Page, he says he is looking ahead, rather than over his shoulder.
With 14 store openings in areas as diverse as Gwynedd, Fife, Derbyshire and East Sussex already under his belt and a further five ribbon-cutting ceremonies in his diary before Christmas, Mr Latham – who says he hasn't heard from the Page camp since he decided to go it alone – is doubling the scale of his dream.
He now believes that his variety shops empire can stretch to at least 200 – rather than the 100 he initially envisaged – offering a combined turnover of £300m and a business worth in excess of £30m, and he is covering the length and breadth of the land in order to make it happen.
With some 150 of the 800 or more former Woolworths sites still available to him, together with a long list of premises vacated by more recent casualties of recession, the self-confessed "Woolies lifer"-turned-entrepreneur has already raised enough private capital to give him kid-in-a-sweetshop status as he tours the country peering into empty shops.
While his wish list of heart-of-community locations in market towns and city suburbs – preferably around the 5,000 sq ft mark and free from too much competition – may appear fraught with problems, he already has much in his favour, he believes.
For families, the core of Alworths' heartland, the familiar mixture of homewares, gardening products, home entertainment, stationery and pick'n'mix provides instant recognition and nostalgia for the Woolworths brand, while for the towns he favours with his business, it also hints at regeneration.
"Many people have questioned the wisdom of launching a new retail chain in the middle of a recession, but, ironically, the conditions have so far proved perfect for us," says Mr Latham, who pitches his new store as midway between Marks & Spencer and Poundland.
"Our customers are delighted that they can once again buy cotton reels, shoe insoles and children's dressing-up clothes in the heart of their town centre; the town councils are welcoming us in because their high streets are in desperate need of new impetus; and landlords are keen to do good deals with us in order to fill some of their sad, empty shops," he adds.
While the former Woolies Saturday boy-turned-head of stores and concessions, whose initials form the basis of his company's name, balks at the "Son of Woolworths" tag that has inevitably attached to his venture, he agrees that in many ways it is a chip off the old block.
"The reason that Poundland and the other discounters haven't plugged the Woolworths gap is a simple matter of brands," he says. "While a £1 toy produced by a company you've never heard of may be OK for a child you don't know very well, our shoppers want to be able to buy recognisable brand names such as Hasbro and Mattel, particularly in the run-up to Christmas.
"Woolworths did many things wrong, including becoming too large and cumbersome to react to the changing marketplace, but in terms of stocking top brands, it had the right idea. Of course, people will come to us for bog-standard washing-up liquid or £1 rolls of bin liners, but once they're in, they also see a kitchenware category featuring top-quality Pyrex and Vileda."
The threat by the Barclay Brothers-owned Shop Direct Group, which bought the Woolworths brand name and logo for £12m at the time of the chain's collapse, to clamp down heavily on any perceived piracy of its online presence has made Mr Latham understandably reluctant to venture into web retailing. But he doesn't see a problem. "Our core markets are children and families and for both demographics, going into an Alworths after school or on a Saturday morning and finding copies of Toy Story 3 and a Hallowe'en mask, as well as non-stick saucepans and a rose bush for granny's birthday, is far more attractive than the whole business of going online, choosing a selection from fuzzy pictures and then waiting for the parcel to arrive.
"We're for everyone – young and old, rich and poor – and that means that the physical shopping experience and customer service will always be more important than the web."
All of which firmly rules out any provocative pushing of boundaries à la Poundland, whose decision to continue selling X-rated DVDs alongside cut-price toiletries and household goods – despite protests from shoppers – elicits a shudder.
"We want children to spend their pocket money with us, parents to buy their Christmas films from us and grandparents to think of us when the kids in their lives want the latest games console. We will never do anything to offend families."
While Alworths' notion of a department store on the high street is based firmly on the "five and dime" concept brought over to the UK by Frank Winfield Woolworth 101 years ago, there are distinct differences, says Mr Latham.
"Despite the depth of this recession, shoppers are as keen to buy into quality as they are to find low prices, and we are finding that our core consumers want to treat themselves once in a while. Whether it's beautiful candles and mats for their dinner table or top-quality bed linen and lighting, the Alworths' customer is proving to be increasingly aspirational as well as value-driven, and that is quite different from Woolworths," he adds.
Mr Latham is proud to have reversed his old company's "bloated and wasteful management structure" for a top-table team of just 15, while staff – many of whom are ex-Woolies – currently number fewer than 200. The business has already outsourced HR and the entire home entertainment category to third-party suppliers and Mr Latham does not discount the possibility of farming out other specialist business areas.
"It's probably a reaction to what I saw at Woolworths, but my ambition is to keep this business uncluttered and simple, both in terms of processes and accountability. If that means we are free to do what we do best – running great stores and providing friendly and helpful customer service – then it makes perfect sense."
Above all, Mr Latham says he craves the opportunity to take a more fleet-of-foot approach to the world of high street retailing. "While Woolies always held on to its residual stock and repeatedly passed up the opportunity to try new things – pet accessories, for example – our approach is to cut and clear when things aren't working, reinvest the money in the business, and get on with trialling the next thing."
Given that the first store didn't open until last November, this year's pre-Christmas selling period, which is likely to account for at least 50 per cent of the company's annual turnover, will be crucial in establishing Alworths as a credible force on the high street.
While Mr Latham agrees that he is anticipating the season with "even more trepidation" than his retailer rivals, he remains bullish.
"The feedback we are getting suggests that Woolworths is still greatly missed by consumers, particularly at this time of year, and despite a whole raft of pretenders to the Woolies throne, Alworths is the real deal."
The "Wonder of Woolies" may still be fresh in the minds of the millions of consumers who viewed the chain as a key Christmas shopping destination, but to Andy Latham, the wonder of Alworths is only just beginning.
Back from the dead? Woolies' online experience
Woolworths' 800 stores may be no more than a high street memory but the brand still exists – at least online. It sells pretty much what Woolworths didn't sell enough of when it collapsed at the end of 2008. Even the iconic pick'n'mix sweets are there (called trick'n'mix for the next few days as part of the big Hallowe'en promotional push). Although it's fair to say that the experience of buying online, with the help of the site's rather clunky graphics, rather lacks something compared with the real thing.
The name was bought from the administrators by Shop Direct, which also controls Littlewoods and is owned by the reclusive Barclay brothers, the proprietors of The Daily Telegraph.
Gauging its success is not easy. Private companies have considerable leeway about what they report, and Shop Direct doesn't split Woolworths out.
But for what its worth, the company says it's all going well, claiming 25 million visitors to woolworths.co.uk since its launch last June and an average online basket size of £40. That would require a very big bag of pick'n'mix).
The chief executive, Mark Newton-Jones, said: "It has been a great first year for woolworths.co.uk and we are delighted that we were able to bring such an iconic and much-loved brand back online. We are seeing strong demand from customers who want the ease of buying high street brands online. Ladybird is also performing very well and we are continuing to expand a number of lines into new areas."
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