Bonmarché, one of the UK’s largest womenswear value retailers, catering for women over 50, won the IPO of the Year Award at the 2014 Annual Small Cap Awards after is floatation on AIM in November 2013, having raised some £40m. What makes this so remarkable is that less than two years previously, the Wakefield-based company had faced an uncertain future after its parent group, Peacocks, collapsed into administration with debts of £250 million.
Bonmarché’s phoenix-like rebirth and turnaround from the ashes of what was one of the largest retail failures since Woolworths was masterminded by Academy Group 45 member, Beth Butterwick, who had joined Bonmarché as Brand Director in 2011.
Beth Butterwick, Academy member
Over and above the woes of its parent group, Butterwick quickly realised that the business had lost touch with its core customer.
“Bonmarché was a niche gem on the high street, but it needed to be loved,” she said. “It had drifted into trying to cater for much younger customers and as sales declined, it made the mistake of putting prices up to compensate for this. In other words, it had moved away from its primary values.”
With over 20 year’s retail experience, she was well-placed to identify a company that was out of touch with its customers. Having started her career as a graduate trainee with Marks & Spencer, where she progressed to Head of Buying for the Accessories Group, she moved to a senior with GAP and spent three years in Holland as Commercial Director of a women’s fashion business with 450 stores across six countries.
So when Bonmarché went into administration, she joined forces with Finance Director, Stephen Alldridge, to devise a turnaround strategy that would see the company return to what it does best. Within two weeks, private equity firm Sun European Partners acquired Bonmarché via a pre-pack administration deal with KPMG, and she was catapulted into the role of CEO.
“The low-hanging fruit was to reposition the product positioning and prices back to the core customer,” she said. “We had to focus on listening to what our customers wanted as well as establishing a differentiated on-line offering to supplement the on-site stores.”
Bonmarché’s on-line offering was critical, Beth says, because the 55-plus demographic represents the fastest-growing online market segment. These customers are becoming increasingly internet-savvy, with the birth of the tablet device.
“Through our loyalty programme, we’ve have been able to better evaluate our customers and understand their purchasing profiles. This information is really qualitative as we have 6.5 million members, 1.8 million of whom are active. Three -quarters of our weekly sales are driven through Bonus Club customers.’’
‘’Developing a robust multi-channel business has been a fundamental requirement as customers shopping channel habits change. For example, 37% of our customers who buy online choose to collect their purchases in store and with circa 273 shops across the country, our stores represent an important opportunity to interact with our customers.
“On collection, we encourage them to open up their package and try it for size. At this point suggestions can be made regarding additional outfit solutions. Our data tells us that customers who shop across multi-channels spend on average 36% more than customers who shop one channel.’’
Continual customer feedback is key. Therefore once a month, we have a focus group feedback session from our customers via stores.. What we learn from this information helps shape our forward strategy.”
With a website, mail order catalogue, a telephone order service and a TV shopping channel, Bonmarché is now a truly multi-channel operation with a deep understanding of its customers; one of the key components as to why it has gone from administration to 200% growth and a successful float on AIM in less than two years.
Another key factor in this remarkable turnaround, however, is trust.
“Businesses with a strong ‘trust ethic’ consistently deliver a higher ROI,” Beth says. “At all times, I need to know what the business is feeling, and this applies to both our customers and staff. Sometimes it could be a feeling that’s under the cover. I encourage our staff to obsess about listening to our customers; understanding what they are saying and giving them what they want is absolutely core to Bonmarché’s values. I believe our unique point of difference to other retailers is that we are essentially a customer-centric business.”
Beth met Academy Group 45 Chairman, Kevin Kerley, in 2012, and has been a member since becoming Bonmarché’s CEO.
“The prospect of joining the Academy seemed absolutely right. It felt important to build up a network and get external support for the business issues that I was not familiar as a first-time CEO, such as supply chain and property.
“One business initiative, in which the Academy has supported me on, was in helping me to consider whether an in-house or out-sourced ‘customer services’ model was right. We brainstormed this issue in one of our monthly meetings and finally, through good questioning, it felt that an out-sourced one would be the right ‘service’ and cost solution. So in May 2013, we set up a partnership with a small company in Wetherby, who are the perfect ‘fit’ for Bonmarché; in that they work with other ‘like partners’, therefore understand how to speak to our customers.’’
“At a senior management level, too, the Academy has supported me on the appropriate multi-channel strategies and on-going is a discussion around what make a great ‘people focused’ HR department, including what this team could look like.”
So what’s the next goal?
“No business can stand still now – the moment you do, your business is backward-looking. It’s critical to remain ahead of the curve, especially in the world of retail! The biggest discipline is to make sure that the support functions are in good shape and that my team don’t get overloaded by taking on too many exciting business initiatives. Assess your objectives and map out your priorities so that the inception of an idea can progress to delivery. However most importantly, never forget who your customers are.”