While the retail sector faces an uncertain 2009 after one of the toughest Christmas trading periods for years, one North West business continues to buck the trend. Rupert Cornford reports on the unstoppable train that is The Original Factory Shop.
“Don’t mention the retail sector.” These are the words on everyone’s lips as the full extent of the economic downturn begins to bite.
Government figures released in January revealed the UK economy is in recession for the first time since 1991 as gross domestic product fell more than 1.5 per cent in the last three months of 2008 after a drop of 0.6 per cent in the previous quarter.
But this is not the place for dwelling on the negative. There are plenty of North West businesses going against the grain and continuing to release strong sales figures and setting impressive growth targets.
The Original Factory Shop, a value retailer headquartered in Burnley, has posted a 22 per cent gross increase in sales for the 13 weeks to 4 January and a like-for-like figure of 3.7 per cent. And new chief executive Angela Spindler, who took over at the start of the year, says the business continues to go like a rocket.
“As we have entered January, we are trading well ahead of those figures, so we’ve had a strong start,” she says. “We are up in double-digit like-for-like sales.”
Spindler has made the move from Debenhams, where she was managing director, and replaces the successful helmsman George Foster, who joined the business in 2005 after a stint at discount giant TJ Hughes, and is retiring.
The company was established in 1969 under the Peter Blacks brand. From 2002 to 2004 – when it took on the current name – it grew from a turnover of £8m to £38m and was taken over in a management buyout backed by Barclays Private Equity in December of that year.
By the time it was sold to Duke Street Capital in December 2007, it was worth £68.5m. Current turnover is clocked at £80m and The Original Factory Shop aims to grow through organic expansion by opening 20 stores a year.
To service these targets, the company relocated its warehouse and headquarters last year to a 145,000 sq ft facility capable of servicing up to 200 stores, which are located in ‘secondary’ towns across the country.
Spindler says: “I’ve inherited a business in good shape but I can build on its strengths. My objective is to make sure that where there is a Factory Shop, people know what great value it offers.
“We will always be a local business, and that’s our point of difference. We don’t want to be Primark – this isn’t about big marketing campaigns; it’s about making a difference locally.”
Spindler argues that many smaller towns in the UK are underserved by the relevant retail offer as they don’t have the footfall to support the larger players. And she believes the value model will always be relevant.
“Everybody loves a bargain, and the fact you can access good products at lower prices will always be something that resonates with customers,” she says.
The Original Factory Shop is set to open its 103rd store in the middle of February – in the town of Girvan (it’s in Dumfries and Galloway) – and Spindler hopes she can add a further 25 to 30 units over the next year as she gets her feet under the desk.
“It’s a great place to work. People work incredibly hard and know their business really well, which is one of the advantages of working in a smaller business,” she says. “I’m getting my sleeves rolled up a bit more – it’s fun.”
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