Menarys boss says fashion retailer is shifting business away from reliance on concession brands
THE head of one the north's biggest independent fashion retailers Menarys has said the family-owned company is increasingly shifting the business away from the concession model.
It follows the collapse of one of the company's biggest concession partners in 2018, Jacques Verts. The British group's brands included Precis, Dash and Eastex.
Menarys' managing director Stephen McCammon said the three stores opened by the Co Tyrone retailer between November 2018 and March 2019 were all stocked with ‘own bought' products, which it is increasingly sourcing from China.
Menarys was founded by Mr McCammon's great-uncle Joseph Alexander in 1923. The company traded as Alexander's for its first 50 years before rebranding during the 1970s following the acquisition of Menary Brothers in Lisburn. It now has 20 stores, including two over the border.
A new company report for Menarys show its workforce dropped slightly to 318 for the 12 month to January 31 2019. Mr McCammon confirmed that a small number of staff at its head office in Moygashel had recently opted for voluntary redundancy.
He said the company has focused on making its operation more “lean”.
New accounts for Menarys show its pre-tax profits dropped from £418,803 to £348,533 for the 12 months to January 31 2019.
“Week in and week out you are seeing retailers effectively fail,” said the managing director. “So we've got to make sure we're ahead of any curve that the economy brings and make sure we're as efficient as we can possibly be, whether that's in branches or at our head office.”
The accounts show Menarys did see s £1m rise in its turnover to £19.5m for the same period.
Mr McCammon said the figure is for ‘own bought' sales only. He said that when the sales of all concession departments are included, the figure is closer to £34m.
Menarys takes a commission from the sales of concession operators, the largest of which is Philip Green's Arcadia, which accounts for around 15 per cent of all sales. It's understood to total at between £5-6m a year.
However despite the fashion giant enacting a company voluntary arrangement (CVA) to scale back its leasehold liabilities, Stephen McCammon said Arcadia had actually opened a number of new departments within Menarys in recent months.
The uncertainty within fashion retail has prompted a shift in the company's strategy in favour of sourcing its own products for its racks and shelves.
The three new stores opened by Menary's between last November and March in Enniskillen, Ballymena and Templepatrick were all ‘own-bought' shops.
They were the first new stores opened by Menarys in a decade. The Templepatrick store in particular, opened in Coleman's Garden Centre, marked a significant new direction for the company.
“The Coleman's store has been unquestionably the most successful opening that we've ever had. It's been superb,” said Mr McCammon.
“It has shown us a different model and I guess in time that is something that we would look to pursue – in terms of other garden centre opportunities, should they become available.”
Menarys' has also partnered with Irish coffee chain Bob & Berts, with four in store coffee shops opened in recent years.
Mr McCammon said the preference for ‘own bought' products is about giving the business more control.
“There has been a shift over the last number of years where a lot of the concession brands we have partnered with have struggled and we've then found ourselves having to find alternative uses for the space,” he said.
“There's no doubt our strategy is to continually grow the own bought part of the business at the expense of maybe contracting the concession part of the business.
“We have significantly increased the level of product that we are sourcing directly from China. That is effectively our strategy – to grow our own bought and expand the amount of stuff we are sourcing directly from the Far East.
“We're growing things like our cook shops, gifts areas, accessories, home furnishing and footwear. That has allowed us to focus on value.”