and being more flexible about using part-time staff to fill in at peak times; flexibility being the key word.” I wondered which had been most affected by the changes - the retail side of Darker Enterprises or the distribution side. He responded: “This has mainly been at head office level, as on the frontline - in the shops - you have to keep experienced staff in place. But even in the shops we’re using more part-time staff. Using two with overlapping hours sometimes makes more sense than having two people in the shop continuously. From the floor up we’ve had a complete review of costs and made savings however we could. Happily, the biggest in any field tend to ride a recession better than some others and within the adult industry some businesses have folded. Both shops and distributors. In some ways we have been hit hard but I think we’re better equipped to ride the recession out than many. There can be no doubt, even if there wasn’t so much free content online, people just have less money in their pockets. Food, petrol, heating, lighting - all those bills have gone up steeply and incomes haven’t followed suit.”
There are currently 102 Private Shops, slightly down from the firm’s peak. Wallace explained: “We’ve had to lose a couple and four or five more are currently up for sale. That said, we have opened new shops in the last couple of years, targeting areas we think there’s a good opportunity. If it’s a town where we feel we can make money we will attempt to open a shop in that area. The bottom line has to be takings, hence why we’re looking to sell on some shops. It doesn’t tend to be forced by leases coming up for renewal or rents as we own a large number of our premises anyway. If it’s not breaking even, we have to look closely at that shop to see if there’s a reason that can be addressed. Some areas of the country have been hit worse than others and those tend to be where we have to consider our options.” Wallace went on to explain that there is more to adapting to difficult circumstances than cutting a foot off to save a leg. He said: “It’s not enough to just meet the market challenges by pulling our belt tighter though. We’re also trying new ideas, new approaches. We brought in a consultant to help with the marketing of the business, the structure and improving the products we carry. We’ve trialled lots of new products - lubricants, toys, pills, DVD ranges - in a variety of shops to get a feel for their potential. If they do well we widen them out to the other shops. We’ve been listening to what our customers want and adjusting what we offer accordingly.”
He continued: “There has been a move downwards in DVD sales and upwards in toys, which I think the whole industry has experienced. We’ve also noticed a growth in consumable sales, such as lubricants and pills. Films have been hardest hit and although our figures suggest the market has bottomed out, there are fewer in production and fewer suppliers around. This has lead to us returning to our roots and buying- in not physical product, but the rights to films and certificating them through the BBFC ourselves. For the
last year to 18 months we’ve been trying to avoid buying in expensive product and buy licenses and press the movies ourselves. Looking to the future, that looks to be the best way of ensuring a continuous source of new DVDs for the shops.”
That, I suggested, must put a considerable slice of profits into the hands of the BBFC at a time when it is ever less relevant to the adult industry. Wallace agreed: “A big part of the cost of re-editing films and making them legal for the UK market is the BBFC. I was looking at last month’s invoices from them, which was something like £9,000. It’s a lot of money but we accept it’s a part of the cost. As DVD sales have shrunk the BBFC fee makes the unit cost of each title that much higher. Where we may have pushed through several thousand of a popular title before, now it may only be 1,500, which means the price per disc is pushed up.”
But maybe not everyone is playing by the same rules, according to Wallace: “We’ve noticed a growth in non-BBFC product in other’s shops. Lots say they’re certificated but in reality, if you check the code on them, they’re not. It’s a worrying trend - just sticking a label on with a made-up number and an R18 logo. Dodgy discs are something we have to stay clear of. If we had a problem at one shop with uncertified DVD sales that could potentially endanger the licences of all the other shops.”
Neatly bringing himself to the next question which
was poised on the tip of my tongue, He continued: “Which brings me to licensing, an area we’ve been fighting to improve up and down the country. In the last two years we’ve seen great successes with a large number of councils. We’ve shown them that the charges aren’t justifiable and they’ve come to realise that the high fees they could once charge just aren’t fair. So they’ve began to reduce them. There’s an on- going action in London’s West End, which has the highest charges - it’s gone to judicial review, I believe. Westminster Council have enjoyed the adult industry as a cash cow for too long.”
Concluding not only this interview but this series of articles, Wallace said: “So, fresh ideas, marketing, advertising, mailshots - we’re looking at a wide variety of ideas to improve our business, including seeing what our competitors have done and if it’s been a success for them. If we feel it’d work for us, there’s no shame in copying them.” Every adult shop is different, but all - licensed and unlicensed - face the challenge of adapting to a rapidly changing market. The adult sector has been spared the fate of many other specialist retailers, from butchers to music stores, over the last 20 years and the very nature of the products should ensure that bricks and mortar adult retail has a more than viable future. As long as it is managed correctly and it continues to deliver what consumers want at a price they can afford to pay.
102 shops makes Private the UK’s largest chain of licensed retailers 41
Erotic Trade Only June 2011
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