INTERNATIONAL ROUND TABLE
and b) to manage what is a small thing, really, but you’ve got to make the point by making a really big deal out of it: “Okay, you can get them, but you’ve got to send us samples, you’ve got to do this, you’ve got to do that”.
EF: How do you deal with different climates or the Southern Hemisphere where the seasons are all wrong and the franchisee wants to fill in with local product?
LB: We do source locally – about five per cent of the range that goes to the gulf is exclusive. We do that through our UK buying team, not locally – and I would say that most of that product is to do with timing, rather than style. Dubai, Jan-Feb, busiest time of the year for Dubai shopping festival … spring hasn’t really sprung for us. Yes, it’s about local taste, but for us it’s as much about getting the timing right for the seasonality... Our Middle East partners only carry about 50 per cent of our women’s wear for various reasons.
EF: in terms of reputation then, does that mean the brand’s not being presented properly across the whole range?
LB: The big change for us is actually presenting a much more premium M&Co that can fit in many of the more upscale environments. What we’ve had to do is take all the best elements of the concept and put that into an international concept and that’s what we’ve delivered. Because you can’t take a store in the home counties and drop it into Dubai Mall ... You have to be flexible and adapt. So yes, we’ve
had to almost build a different reputation.
HC: I think it’s a matter of attitude also. Our’s is we’re not selling a concept in the way that: “This has to be implemented 100 per cent everywhere the same way!” We make a toolbox for a partner and it’s his toolbox to use his potential in the best possible way. In Switzerland they sell more leather, in Scandinavia they buy more fabric upholstery, in France they have other types of beds, in the Middle East, mattresses; the emphasis is different everywhere. The stores all look the same the day they open – from the next morning on, they start to adapt. Always, always, always and, at the end of the day, we have 260 different business models, whenever you go to stores: this guy does this, this guy does that... it’s very interesting to hear customers don’t know that we are a franchise – they think it’s a chain. So you can run a brand and be very consistent in one way and on the other hand come up to local needs and understand the local markets – that’s what we consider as our strength. We are not H&M that has the same stores all over the world, and where it doesn’t work, it simply doesn’t work, they accept that but we try to understand local markets.
LB: From a commercial point of view, at the end of the day, the reason you franchise is you’re not the local expert.
HC: That raises an interesting question – why do we do franchising? For us it would be much faster to roll out our own stores, the gross margin of nine months is enough to finance a store – great. Why don’t we do it ourselves? It would be much faster.
Two things – one is we are a family company, we’ve got an owner and he doesn’t want to talk to hired hands, he wants to talk to entrepreneurs, to people who own a business, so he can seriously talk to those people, it’s not members of the trade union and it’s doing business on the same level where a company owner talks to a company owner.
And the other thing is we have these people who own their businesses and who know their local markets. We’ve got stores in tremendous locations, we’ve got perfect locations here in Notting Hill for a price that other companies would dream of because we’ve been the first ones there. We were the first in Soho in New York long before Prada went out there. We have a franchisee there... Now there are so many people around there, with cameras, tourists around – (our partner) he’s been there for ages, he knew this part of town was going to be popular and he knew that for a long time – we could never do that from Denmark. We can take pins and put them on a map, but we don’t understand what is “Soho” today and what is going to be popular. That’s the reason why we do franchising, this is what makes the business so interesting, this is what makes it fun because we learn from them every day – they tell us which products are going to be popular tomorrow, they talk to the customers every day. I think very few furniture companies have such direct contact with the market as we do through our partners. They are in our product committees and when they’ve got their thumbs down we don’t make, for instance, this or that sofa, ’cos they know better than we do and it’s their own franchises. Companies live on the costs of their franchisees and we live through our franchisees. They are half of our know-how in each territory. n
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