12
NEWS REVIEW
24.03.17
www.thebookseller.com
RETAIL RESULTS Foyles maintains growth after finding ‘harmony’
Foyles has reported a second year of profit, with c.e.o. Paul Currie below citing a “massive step change” in the retailer’s operations in the past two years. The mini-chain’s turnover for the year to 30th June 2016 was £25m, up 2.75% from £24.4m a year earlier. Pretax profit, at £131,447, was up ten-fold from £11,108. The retailer remains cash positive, with an EBITDA of £631,541, up from £397,055 in 2014–15. A string of changes since Currie’s appointment in 2015 have contributed to the increases. He said: “We have gone about a massive step- change in terms of people, changes in roles and responsibilities; we have created an omnichannel strategy; we have opened three new stores [in Chelmsford right, Birmingham Grand Central Station and its relocated Bristol branch]; and launched a children’s festival which is now being held annualy. There were a lot of things in a very short space of time and we are still maintaining growth in sales, profit and EBITDA,” he told The Bookseller. One major overhaul has been of its e-commerce arm, with the concept of omnichannel retail brought in and deep- discounting online ended, with customers offered the same prices as in the physical shops. Currie said: “When I joined the business, online had a totally disconnected relationship with the rest of the business. We were price- matching pure-play online retailers’ algorithms, so the pricing was different to the stores. It was almost an entirely different business—we could have called it
PingPongFoyles.com for all the relation it had to the stores.” At the time same, the company brought in a
new ordering system, Foyles Lite, and introduced digital enhancements into shops. Booksellers were given iPads to facilitate orders and enquiries on the shop floor, new shops were equipped with
digital signage, and in Birmingham customers could listen to audiobooks through audiovisual “author pods”. Online orders fell as a result, but footfall increased in store. “We lost some volume online but the volume was loss-making volume,” Currie said. “Harmonising the pricing across the business was a very important step.” The website sales have increased since it was
redesigned (with the aim of better showcasing books and providing more interesting content), while “open rates” of Foyles’ marketing emails have increased from 1% to 17%, Currie said. Its free delivery offer online has also been expanded to do away with a minimum order value. Currie also hailed a new in-house sales education programme concentrating on customer service, which every staff member is trained under. Head of customer experience Jeanette Cross leads the initiative, which sees everyone in the company champion four values: mindfulness, in terms of customer service; currency, in terms of being at the cutting edge of book trends; eagerness, to share knowledge and information—as a point of differentiation to online algorithms; and consideration and compassion towards customers. “We do not want to be a hard-nosed retailer”,
Currie explained. “Jeanette is my conscience. If there is a new project we are embarking on, I will ask her if it fits with the values, and if it doesn’t she must say. She is the yin to my yang.” Foyles also launched a children’s summer
festival, now called Storybox, which will run every year. Key sellers during the period the results refer to included Go Set a Watchman
by Harper Lee, SPQR by Mary Beard, the Foyles exclusive edition of Slade House by David Mitchell and Penguin’s Little Black Classics. Currie said the business still had “a lot of work
to do” to ensure growth was sustainable in the long term. The major challenge for the company is operating in such a low-margin business at a time when costs are rising for bricks-and- mortar retailers, the c.e.o. said, adding: “Foyles is 114 years old, but everything we do is in that enterprising and innovative spirit of our founders. While the announcement that we’ve made a profit for the second year in a row is undoubtedly good news, we are aware we still have a lot of work to do.” He called on publishers to help to ensure the
company’s viability going forward. “Publishers can help us by recognising we are important in terms of being a customer-facing company that puts books in front of people, and there is a critical point in terms of profit margin that has to be achieved to make it viable,” Currie said. “I have been working with the chiefs of all the publishing houses... We are starting to see things follow through, but there is more to be done.” When pressed on the details, he added: “Putting it crudely, I am talking about [more] margin.” Despite the challenges, early signs indicate
that Foyles is on track to post another year of profit in its next financial results, Currie said. While still “learning” how to move its London- centric model out to new regional stores, Foyles is still keen to open more outlets. “We are definitely keen [to open more]. We are very clear: there is an enormous opportunity for us,” he said.
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