Existing Kingston store

The much-blogged-about Swedish hardware retailer Clas Ohlson published its sales figures for June yesterday.

What’s interesting is that sales for the UK are now being stripped out from those of Finland, giving us a much clearer idea of how the UK business is doing. Total sales were SEK 442m, of which the seven UK stores accounted for SEK 15m. A year ago, the UK business delivered sales of just SEK 5m, with the June 2010 figures representing a seemingly impressive 176% increase – or 203% in local currency. Sales in Clas Ohlson’s home market of Sweden, in contrast, were unchanged year on year.

The trouble, of course, of eyecatching percentage figures like these is that they are not based on like-for-likes – in other words, the year-on-year comparison takes no account of any stores that may have opened or closed in the intervening period.

To give another example, this is why, at a time when the business is expanding rapidly, the John Lewis Partnership’s trading figures – which again show only the raw increase in sales, not like-for-likes – need to be interpreted carefully. There’s no doubt that both the eponymous department store chain and Waitrose are trading well right now, with the latter’s latest weekly figures, published today, showing a 13% sales increase compared to a year ago. It’s just that once you take out the effect of new stores opened in the last 12 months, the actual sales increase in the established stores is inevitably lower than the headline figure.

Clas Ohlson fascia

Apply this to Clas Ohlson, and you realise that while the June 2010 figures are for seven stores (two of which had, admittedly, only been open for a month), the June 2009 stats are for just two (Croydon and Manchester). On this basis, the threefold increase in UK sales is just about what you would expect, especially since two of the five new stores are the smallest in the estate.

By way of an alternative measure, what happens if we look at each country’s sales figures for June 2010 in relation to the number of stores?

• For the UK, sales work out an average of SEK 2.1m for each of the seven stores.
• Finland has 16 stores and a turnover of SEK 35m – so that’s SEK 2.2m per store, a little higher than the UK.
• There are 42 stores in Norway – with total sales of SEK 182m, that’s an average of SEK 4.3m for each shop.
• The rest of the stores – 56 – are in Sweden. If total sales are SEK 210m, that works out at SEK 3.8m per store.

What does this tell us? Well, it basically confirms the trends that Clas Ohlson highlighted in its own year-end report for May 2009 to April 2010. Here, the retailer notes that “the response from customers to the newly opened stores in the UK has been positive and the number of visitors to date has been higher than the Group average”, but that “the conversion rate and average purchase in the UK have been lower than the Group average, which is generally the case in conjunction with the penetration of new markets.”

Looking forward, the report explains how “Clas Ohlson anticipates that establishing its brand name and position in a completely new market will take time, and that the conversion rate, average purchase and sales will gradually increase in coming years.”

In other words, while the sales densities for the UK stores are indeed currently lower than those of the more established Scandinavian branches, Clas Ohlson’s message is that this is just a normal part of entering a completely new market, and that they’re in it for the long haul.

As more UK stores open, and the Clas Ohlson brand becomes more widely known among British consumers, it will be interesting to see how quickly the UK sales densities can catch up with those in the retailer’s more mature markets.

Upcoming PC World and Currys store in Northumberland Street, Newcastle (17 Jun 2010)

I was curious to read Retail Week’s recent article about the electricals retailer DSGi trialling a small-size dual fascia Currys and PC World store at Bluewater, following its successful introduction of two-in-one megastores in retail park locations such as Leeds, Fulham, Bristol, Hedge End and Merry Hill.

Though not mentioned in the article, anyone walking along Northumberland Street in recent weeks will have noticed that Newcastle city centre is getting a combined high street Currys and PC World too, replacing what was previously Currys.digital and, before that, Dixons. According to the signs on site, the new store is set to open on 12 August, following quite significant renovations to the property.

Northumberland Street scene, Newcastle (17 June 2010)

I understand, incidentally, that the first floor of the Currys building – until recently the Hustler Pool Club and Leo’s Restaurant – is to become a branch of Cotswold Outdoor, while Hustler’s and Leo’s will be opening up in new premises elsewhere in the city centre.

At the same time, DSGi is apparently not the only large footprint retailer looking at more compact sites in urban centres. The DIY market leader B&Q is reportedly set to “open small-format city centre stores in the UK after the success of similar pilot stores run by parent Kingfisher overseas.”

B&Q store. Photograph by David Wright

When it says ‘small’, it’s important to recognise that these will still be good sized stores – though more compact than B&Q’s present smallest sites, 35,000 to 40,000 sq ft is still double the floorspace of a typical Clas Ohlson store, one of the retailers with which a homeware-focused city centre B&Q might be expected to compete.

It does open up interesting possibilities for the types of unit that B&Q might bring back into use, particularly if the retailer is prepared to go for premises that occupy more than one level – former department stores, for example. However, with the first new format stores not set to open for 18 months or so, it will still be a little while before we get to see exactly what B&Q’s venture into town and city centres will look like.

Screenshot of holding page (15 Feb 2010)

Google ‘Vergo Retail’, and the likelihood is that you’ll currently find Soult’s Retail View among the top few search results. Indeed, since this blog launched in July, five of the top ten searches that people have used to find the site have related to the Liverpool-based department store operator, with the Ipswich store proving particularly popular:

• hollister newcastle: 262
• vergo ipswich: 252
• vergo retail: 145
• vergo retail ipswich: 84
• wilkinsons logo: 81
• clas ohlson: 63
• co-op department store norwich: 48
• hollister eldon square: 47
• vergo department stores: 47
• woolworths closing down: 47.

I suspect that the main reason why this blog has consistently shown up so highly in Google has been for want of much competition: other than a dedicated site for its famous Lewis’s store in Liverpool, Vergo has lacked any online presence of its own to date.

However, given the evident interest from people searching for information about its stores, I’ve always thought that Vergo has been missing a trick, and wondered how long it would be before a company website appeared. Consequently, even though it may mean that my own Vergo-related traffic takes a hit, I was  pleased to see that a holding page is now in place at vergoretail.co.uk (and vergoretail.net) promising that “an exciting new website is under construction”.

Vergo's Robbs of Hexham store

Helpfully, the holding page also features a list of Vergo’s 20 stores across the UK, including the aforementioned Lewis’s, the two here in the North East (Robbs of Hexham, and Joplings of Sunderland), and the remainder acquired from the Plymouth & South West and East of England Co-operative Societies during 2009.

The iconic Joplings store in Sunderland

Following my earlier questioning, the site confirms that the former East of England Co-op stores have simply been rebranded as Vergo. The full-range department stores are called Vergo Ipswich, Vergo Norwich, etc., while the slightly smaller shops go under the names of Vergo Fashion, Home & More! or Vergo at Home. The Homemaker stores that were acquired in Devon and Cornwall currently retain that name, though presumably it will make sense for them to become Vergo at Home in due course.

In a post about web usability last year, I noted that while not all retailers will want or need an e-commerce site, there’s still great value in a website “providing basic information about the business” – details such as news, opening times, directions and contact numbers.

If the upcoming Vergo site does this – as the Lewis’s one does already – then it will surely perform a worthwhile function. At the same time, the site will also help to demonstrate the company’s continued investment in growing its business, and the development of Vergo as a national brand, rather than just a slightly disparate portfolio of acquisitions.

Shop Direct's Woolworths.co.uk

Just a quick post this evening, but I wanted to flag up a well-written and interesting article by Kiran Stacey in yesterday’s Financial Times, entitled “The fight to be Woolworths’ heir”.

The piece covers some of the same themes as my own blog posts about Wellworths, Alworths and Shop Direct’s Woolworths brand, but gives some new and interesting insights into the operation of each business through talking to Wellworths’ Claire Robertson, Alworths’ Andy Latham and Shop Direct’s Matthew Hardcastle.

Alworths fascia

Notably, the article tackles the issue of the three retailers’ similar names, and – contrary to what has been reported previously – suggests that Shop Direct is no more happy with Wellworths than it is with Alworths:

We’re not happy with what Alworths is doing. They are trading on the old Woolworths name and brand. Meanwhile, Wellworths is trying to be Woolworths in all but name, and we are not very happy with that situation either.

Certainly, it looks like the tension between Shop Direct and the other ‘new Woolies’ is not going to vanish anytime soon.

Alworths' website

Meanwhile, I’ve noticed that Alworths has launched its website at http://www.alworths.com/ in the past few days. The colour scheme is, arguably, a little on the psychedelic side, but the content and overall impression is very good, conveying a distinctive brand personality that is bright, friendly, fun, local, and family-oriented.

The ‘Rate your visit’ form and the opportunity to nominate an Alworths staff member for a ‘Star Service Award’ are also really nice touches. Similarly, though there are no clues as to where Alworths’ future stores will be, visitors to the site are invited to ‘nominate a location’, to help Alworths achieves its goal of opening “20+ stores” during 2010, and its ultimate expansion “towards a chain of 200 stores”.

I’ve been really impressed with Alworths’ marketing and PR efforts to date. The company seems to have been quite adept at celebrating the qualities that people most liked about Woolworths – such as the service, value and range – while avoiding the traps that ultimately contributed to Woolies’ demise, and creating a personality that is fresh and new.

I wish the business well, and look forward to seeing how it develops over the coming months. Up here in the North East, perhaps I could nominate Chester-le-Street as somewhere that “a variety chain with stores at the heart of the High Street” would be likely to do well?

Whitley Road in Whitley Bay (16 December 2009)

Visiting Whitley Bay in North Tyneside today, it was apparent that while there ARE indeed a lot of empty shops – as blogged about previously here – there’s still just about enough going on to keep shoppers interested. I’ll give a fuller rundown of my visit, including my reaction to the newly opened B&M Bargains, in an upcoming post.

Abbey/Santander looks like it's between brands at the moment

You have to feel slightly sorry, however, for the town’s branch of the Abbey bank – soon to be rebranded Santander – which is sandwiched between the horrible-looking former Select store and the boarded-up former T&G Allan shop (both closed earlier this year).

Looking at the bank’s current fascia, above, I did wonder whether it was trying to say something about its immediate surroundings?

Vacant former Woolworths store

An interesting story in today’s Times about what it claims is Shop Direct’s plan to “bring Woolworths back to the high street”, with “room for up to 200 stores under the famous red fascia”.

Of course, some might well claim that Woolworths has already been brought back to the high street in the form of Alworths, Wellworths or the like. The difference here is that Shop Direct actually owns the Woolworths brand – having paid £7m for it back in February – so could bring the stores back in name as well as spirit.

Adding some flesh to Shop Direct’s hints last month about there being “an opportunity [for] a chain of [Woolworths] stores in towns across the UK”, the Times article reveals that Shop Direct has no intention of running bricks-and-mortar shops itself, but is looking instead for franchisees. Given that there are barely 200 old Woolies sites left vacant – including some, frankly, in awful locations – Shop Direct’s plans would presumably see a good number of stores opening up in premises that were never a Woolworths before.

Could it be 'Store Opening' soon?

Undoubtedly, any move to resurrect Woolworths as a high-street chain will be welcomed by those shoppers who still miss, and have affection for, the Woolworths name in their town centres. However, given the current enthusiasm for bringing Woolworths (or Any-other-worths) back to the high street, you have to wonder – as the Telegraph has – whether more could have been done to prevent the business from closing in the first place.

Alworths in Amersham

Following in the footsteps of Dorchester’s Wellworths, Stornoway’s Wee W and even Wallsend’s Well Worth It, the latest ‘son of Woolworths’ store – Alworths – opened the doors to its second store in Amersham, Buckinghamshire yesterday.

To date, the various Woolies ‘offspring’ have  tended to be one-off, locally-driven responses to the gap that Woolworths left on particular high streets. In the case of Wellies and Wee W, the impetus has even come from former Woolies staff.

Stornoway's Wee W

Alworths also has a strong Woolies connection, in that its founder and MD, Andy Latham – hence the ‘AL-’ in Alworths – used to be Woolworths’ head of store and concessions development. Where Alworths differs from the others, however, is in embarking upon an ambitious opening programme from the very start. This makes it the first genuine retail chain to emerge from the ashes of Woolworths, though speculation remains that Clare Robertson’s much-celebrated Wellworths might expand beyond Dorchester before long.

Alworths’ inaugural store, in Didcot in Oxfordshire, opened a week ago, poignantly (and intentionally) on the 100th anniversary to the day of Woolworths first appearing on a UK high street.

Three more stores – in Evesham, Warminster and Wokingham – are due to open in the next fortnight, with Alworths reportedly planning to open an ambitious total of 22 stores over the next 12 months.

However, as Alworths makes its presence felt across the south of England, the obvious question is whether it can succeed where Woolworths ultimately failed. In short, is there a place in modern retailing for Alworths? And, if so, what does Shop Direct – owner of the now online-only Woolworths brand – have to say about the matter?

The industry paper Retail Week has been surprisingly sniffy about Alworths’ prospects, with editor Tim Danaher asking “what’s the point of reinventing something which failed, particularly as all the best ex-Woolies stores will now have been taken by other retailers?”, and endorsing the view of an RW reader who had argued that “The son of Woolworths already exists – it’s called Wilkinson”.

When news of the Alworths venture was first announced, RW also suggested that the new business had missed the boat – if it wanted to capitalise on the goodwill towards the old Woolies, then it was no good making its appearance ten months after Woolworths’ demise.

Admittedly, Alworths was quite a long time coming – Latham and his then business partners were talking about the idea for the business as far back as February – but I do, in this instance, think RW’s scepticism is unjustified. Here, in summary, are a few reasons why I think Alworths stands a good chance of success.

1) People want it

Though some people have questioned the point of a new Woolworths-like chain, reaction in the places where Alworths is opening seems to be largely enthusiastic. Indeed, some towns, such as Chippenham, have been clamouring to get an Alworths of their own – even to the extent of making rather patronising comments about “the people who would use” the Poundland store that is slated for the town’s former Woolworths site.

That enthusiasm is because, ten months on, many towns still do have an empty shop where their Woolies used to be, and still miss not being able to buy locally the types of products that Woolworths used to sell. Which brings us on to the fact that…

2) Alworths stores seem to be opening in sensible locations

Alworths in Didcot

Look at the list of Alworths stores announced to date – Didcot, Amersham, Evesham, Warminster and Wokingham – and it’s clear that all are relatively small market towns with a population of less than 30,000.

This seems a canny move, given that it’s in exactly these types of (usually Wilkinson-free) locations that a variety store – selling a wide range of goods that cannot be easily obtained elsewhere in the town – is likely to thrive, and where the absence of Woolworths has been most keenly felt. Which brings us on to the fact that…

3) Alworths is not Woolworths

At its time of closure, Woolworths had more than 800 shops. In a year’s time, Alworths might have 22.

Where the good bits of the Woolworths business were dragged down by its unprofitable and frankly grotty stores in other locations, Alworths has the advantage of being able to choose sites that fit the business as it is today. Furthermore, all will be clean, fresh and modern, and able to offer a much better customer environment than many Woolworths stores were able to.

For me, the size and quality of the store estate was Woolies’ biggest problem towards the end, not the product mix. Which brings us on to the fact that…

4) Alworths is not 99p Stores / Home Bargains / Poundand / B&M Bargains / The Original Factory Shop (delete as applicable)

99p Stores

One of the strengths of Woolworths was that you could pop in for a box of staples, a Lego model, a pair of pillowcases, and some wine glasses and be pretty confident that the store would have what you wanted.

While the discounters that have been snapping up old Woolies sites across the country are undoubtedly successful, and clearly have a place on the high street, there’s a difference between Woolworths’ – and now Alworths’ – range-driven offer, and those newer stores that seem to be driven instead by price.

Yes, I can drop into Poundland or Home Bargains and get some great offers – but with those stores I find it much harder than with Woolworths to know exactly what will be available from one week to the next. Which brings us on to the fact that…

5) Alworths is essentially Woolworths with a different name (but don’t tell Shop Direct that)

One of Alworths’ strengths is clearly its sense of familiarity. All its stores to date are in former Woolies locations, look rather like Woolies inside, sell similar products to Woolies, and in most cases seem to be managed and staffed by former Woolies workers. The main difference seems to be the blue and purple Alworths logo, which is a far cry from the old Woolworths red.

Beyond the Andy Latham link, there are many similarities at an operational level too – for example, Alworths’ head office staff are former Woolworths alumni, and even the signage supplier, stock management system and PR company are the ones that Woolworths used to use. The name, of course, also has a ring of recognition. Which brings us on to the fact that…

6) Alworths seems like an effective brand

One of my quibbles about the aforementioned discount chains – 99p Stores, Home Bargains, Poundand, B&M Bargains, The Original Factory Shop – is the sheer lack of imagination behind their names. They are not so much brands as a description of what they do.

One of the strengths of Woolworths was that its name had some history and meaning. In evoking the name of the chain’s founder, Frank Winfield Woolworth, it gave it a face; an identity. I think that’s why we can feel an affinity with brands like John Lewis, Boots, WHSmith, even Jessops, but don’t have the same affection for faceless (and now defunct) ones like Kwik Save, What Everyone Wants or Your More Store.

In this case, of course, there’s nobody actually called Alworth, though the ‘AL-’ for Andy Latham is a neat touch. There are real people called Alworth though, so there’s always scope (perish the thought) for Alworths to create a fictional, Hollister-style backstory to match its brand values.

On the downside, the lack of an obvious shortened version of the Alworths name, vis-a-vis Woolies and Wellies, is clearly an oversight. None of Alies, Allies or Alwies are entirely successful. Which brings us (slightly tenuously) onto the fact that…

7) Shop Direct is reportedly grumbling about what it says are the similarities between Alworths and Woolworths… but the British will always support the underdog

Alworths taking at least a sprinkling of inspiration from the former Woolworths reportedly hasn’t gone unnoticed by Shop Direct, the current owners of the online-only Woolworths brand.

It has been widely reported that Shop Direct has “fired a warning shot” over the launch of Alworths, partly driven by the fact that – interestingly – it has not ruled out bringing Woolworths back to the high street itself through a licensing arrangement.

According to Mark Newton-Jones, chief executive of Shop Direct:

We think there is an opportunity [for] a chain of stores in towns across the UK… That is even more of a reason we would defend our position… We are not going to stand by and allow that to happen, using a name and a product mix and trading off the back of the goodwill of the Woolworths business.

Presumably, Shop Direct has been irritated by headlines such as “Woolworths set to relaunch as Alworths”, “The return of ‘Woolworths’ – as Alworths” and “‘Woolworths’ set to return to the high street next month”, which have very much framed Alworths as Woolworths’ rightful successor. To be fair though, this association does, as far as I can tell, seem to have been driven by the media, rather than Alworths itself.

It is an understandable association though. Shop Direct may have bought the Woolworths name, but it seems to me that the actual Woolies heritage – and much of the affection for it – is retained in those vacated stores on our high streets and for the people who used to work there, more so than in a website that, beyonds its name, struggles to evoke the same sense of connection. If a store reopens in the same place as an old Woolworths, featuring the same staff selling very similar products, then of course people are going to feel that their old Woolies has come back in all but name.

Whether Shop Direct’s reported ‘legal letter’ leads to anything more remains to be seen, though its interesting that the company is at the same time reported as having “no issue” with Wellworths. I wonder if this is because the Wellworths brand is not a new creation, but has a previous history – entirely unrelated to Woolworths – as the name of a Northern Irish supermarket chain. That aside, there is always a danger, from a PR point of view, of a large company that is battling with an underdog stoking resentment for the very brand that it is fighting to protect.

Wellworths store in Dorchester. Photograph by Nigel Mykura

Needless to say, in summary, I wish Alworths all the best. I genuinely believe that there is a place for it, and look forward to seeing its store estate creeping northwards in due course.

As long as Alworths keeps doing what it’s doing right – and avoids the pitfalls that Woolworths fell into – there’s every reason, in my view, to think it will be a success.

Many thanks to Hamilton PR for allowing me to use the photographs of Alworths in Amersham and Didcot.

Hollister's website, including the '1922' device

I can’t claim to know much about Abercrombie & Fitch’s sister brand, Hollister, and if I did, I suspect it’s somewhere that might be outside of both my price and age brackets. To be fair though, Hollister’s presence in the UK is pretty new – the first store, at Brent Cross, opened only last year – with Meadowhall and the Trafford Centre currently its most northerly outposts.

Despite my limited knowledge of the retailer, I was still quite interested to read the BBC’s article today about what it describes as Hollister’s ‘fictitious’ branding. Essentially, the BBC has ‘uncovered’ that there is no historical foundation for the use of the ’1922′ device on Hollister’s logos and labels, and that the whole ‘story’ behind the business – actually founded in 2000 – is made up.

In reality, the BBC’s article is not quite the scoop that it first appears, given that the Wikipedia article about Hollister has openly referred to the business’s “fictional background story” – downloadable in full from the A&F website – since at least January this year. Given that it’s no secret, it would surely have been better for Hollister’s press people to point this out to the BBC themselves, moulding the story into some positive PR for the brand, rather than giving a silly response – “Due to our policies regarding press, we choose not to provide any comment on your questions” – that simply appears to add substance to the BBC’s implied criticism.

Nevertheless, the debate about whether all this matters is still an interesting one. The question, essentially, is this – does anybody really care about the authenticity of Hollister’s history as long as they like the clothes and can relate to the brand’s “harmony of romance, beauty, adventure and today”?

It’s certainly true that retailers have long created brands that evoke the American dream – after all, with their respective ‘Cedarwood State’, ‘Atlantic Bay’ and ‘Blue Harbour’ sub-brands, even Primark, Bhs and M&S are at it.

I do wonder, however, if founding an entire retailer’s brand on a made-up story is maybe an evocation too far.

Your comments, as always, are welcomed…

Back of the WHSmith store in Redcar (17 Sep 2009)

Visiting Redcar today, I was amused to spot a little throwback to the past in the form of an old WHSmith fascia, featuring the once familiar cube of ‘W’, ‘H’ and ‘S’ letters. 

Curiously, the main frontage of the store in Redcar High Street features the more up-to-date blue fascia with white text (below), but someone has either forgotten to update the goods entrance or decided that it really isn’t terribly important. 

The more commonly seen WHSmith logo these days

It must be about a decade since I last saw the old logo featured on a WHSmith store, though – I remember it being on the old Eldon Square branch in Newcastle, before that closed and business moved to the shiny new branch on the old Littlewoods site in Northumberland Street. Needless to say, readers, it would be fun to hear of any other places that you know of where the former logo is still in situ. 

It is interesting, though, how a logo that looks fairly innocuous at the point of being retired begins to look rather quaint and dated once you’ve got so used to its replacement. Redcar aside, however, WHSmith seems to have done a pretty good job of rolling its new logo out over the years – and that is important. 

Current WHSmith signage, on a typical store

If you’re a retailer going for a new visual identity, with all the brand values and sense of change that that espouses, it needs to be comprehensively and consistently applied – as House of Fraser has recently done. In contrast, retailers such as Matalan, Next and M&S have all been rather slow at applying their new visual identities to existing stores; the risk is that it creates and communicates a two-tier estate – those most important stores that are evidently worthy of rebranding; and those lower in the pecking order that seemingly aren’t so worth investing in.

Looking towards the Co-op / Vergo / unnamed store in Carr Street, Ipswich. Photograph by Tim Marchant

Regular readers may recall my post from last month, where I queried how the former East of England Co-op department stores might be rebranded following their takeover by the Lewis’s of Liverpool owner, Vergo Retail.

One advantage of spending the last three years working as a market researcher is that I will now quite happily pick up the phone and speak to anybody. Equally, I have become pretty tenacious in digging around until I find out the answers to niggling questions. I thought, therefore, that I’d put these skills to the test.

A day or two ago, I picked up the phone and called – as you do – the former Co-op, now Vergo-owned, department store in Clacton-on-Sea, Essex. “I hope you don’t mind me asking a slightly unusual question”, I said to the very pleasant woman who answered, “but are you able to tell me what your store is now called?”.

“I don’t know!”, was the friendly response. “I’m not sure if it’s been decided yet. It might just be Vergo Clacton.”

So, not a huge leap further forward there. However, the very helpful woman advised that Vergo Retail’s head office might have the answer I was looking for. Conversations with two more very friendly ladies in Liverpool prompted similar responses; clearly the stores could no longer use the Co-op name, but my contacts did not think – beyond referring to the new shops as Vergo department stores – that an alternative brand had been decided upon.

How much less complicated things were with Vergo’s earlier acquisitions in the South West, where the Plymouth Co-op department store already had a brand – Derrys – that was distinct from its Co-op identity, and all that needed to be done was to remove all the Co-op cloverleaf logos.

For now then, the branding of the former East of England Co-op stores still seems to be in flux. However, given the number of searches for ‘Vergo Retail’ – and even ‘Vergo Retail rebrand’! – that are showing up in my blog stats, I can take some solace from the fact that I’m not the only person who’s curious!

Thank you to Tim Marchant for the use of the photograph of Carr Street in Ipswich, which is © Copyright Tim Marchant and licensed for re-use under the Creative Commons Licence.

Woolworths Worthit logo

Wandering around the variety store Poundstretcher in Hexham yesterday, I was understandably surprised to spot lots of Woolworths-branded products on the shelves, including – among many other things – Worthit DVD players and laundry baskets.

Presumably, Poundstretcher has snapped up surplus warehouse stock that would have been destined for Woolies, had it survived. It struck me as quite ironic, given that Poundstretcher put its weak performance over Christmas down to competition from Woolworths’ clearance sale – selling off those same products that can now be found in Poundstretcher.

Even before this interesting twist, I’ve always thought that Poundstretcher – aka Instore – has a great deal in common with Woolworths. Beyond the obvious fact that both have similar product ranges (homewares, confectionary, gardening, Christmas decorations and the like) Poundstretcher has recently had a frustrating Woolworths-style habit of underperforming, even when the economic climate has suggested that a price-focused retailer should be doing well.

Another common feature is that Poundstretcher, like Woolies before it, seems to struggle to offer a consistent customer experience. While some Poundstretcher stores, such as Gateshead’s Team Valley superstore, are spacious and well organised, the smaller branches, like that in Hexham, often seem tired and cluttered.

A third shared attribute – and one where Poundstretcher may even trump Woolies – is in failing to build an understandable and meaningful brand. Since 2005, the business has had an identity crisis. First it began to rebrand its Poundstretcher estate under the new Instore fascia; then, in 2006, decided instead to trade under both names; and now plans to scrap Instore all together, rebranding all those stores back to Poundstretcher. Combine this with Poundstretcher having at least three different logos in active use, and there’s no wonder that shoppers should be confused about what, if anything, the retailer and its brand stand for.

Recent announcements suggest that trading at Poundstretcher has picked up, but that – ominously – “the board does not regard this as indicative of a turnaround in the company’s overall situation”. Woolworths may be gone from the high street – if not from the shelves of Poundstretcher – but as value competitors such as Home Bargains, B&M Bargains and Poundland expand aggressively to fill the gap left by Woolies, Poundstretcher will need to work hard to build a truly distinctive offer and brand.

New (top) and old (bottom) Wilkinson logos

Over the last few months, you may have spotted the new Wilkinson logo – above – that has been quietly appearing on the retailer’s bags and own-brand product packaging.

I’m yet to read anything suggesting that the new logo is any more than a trial, linked to the testing of a new store format; certainly, the full rebrand seems to have been rolled out to only a handful of stores so far (but with seemingly positive reviews), and the WilkinsonPlus website is yet to receive any makeover at all. However, the new logo’s increasing ubiquity on Wilkinson bags and products suggests that it may well be here to stay.

I’ve never been a great fan of the old logo, which has been around for as long as I can remember (i.e. the 1980s!), and has been looking rather tired and clunky for, well, as long as I can remember. The new logo, in contrast, seems to be informed by similar principles to those that have made the 2007 rebranding of Morrisons a success.

First, it is much cleaner and crisper as a visual identity – particularly when viewed online. Second, just like Morrisons, the new logo respects the heritage of the old by retaining the same dominant colour (in this case red), but opting for a less garish shade. Again echoing Morrisons, this is presumably designed to assist Wilkinson in making further inroads beyond its north of England heartland, gently shifting perceptions from that of a value retailer to one that also emphasises quality.

Given that Wilkinson now has 325 stores across the UK, it will certainly be quite an undertaking to roll out the new look to all of them – particularly if, as with the trial stores, it involves a full revamp of the store interiors rather than just a new logo on the outside.

Old Wilkinson logo at the Newcastle upon Tyne store

Old logo at Gateshead store

I’m also not clear whether Wilkinson’s new stores – such as the one due to open in Barnstaple in September – are already adopting the new store format and visual identity. Barnstaple’s new store, incidentally, is noteworthy in that it’s one of the very few former Woolworths sites that Wilkinson has acquired; the only others that I’m aware of are in Ilford and Bognor Regis.

I’m surprised really that Wilkinson has not snapped up more of the larger Woolworths stores, given that it sells many of the same products (only more successfully), and in many ways can be seen as Woolworths’ natural successor. Perhaps it’s because Wilkinson is already represented in many of those town and city centre locations – such as Newcastle – where the old Woolworths stores are large enough to meet its needs?

Anyway, now it’s over to you with a couple of questions. First, what do you think of the new logo? And second, where else would you like to see Wilkinson take over an old Woolworths store?

Co-op Department Store, Great Yarmouth, prior to Vergo Retail's takeover. Photograph by Stephen McKay

In the last couple of weeks, one interesting news story that has been easy to miss is the takeover of the East of England Co-op’s department store business by Vergo Retail.

Vergo Retail, as you may be aware, is the Liverpool-based operation headed by David Thompson that, in 2007, rescued Lewis’s of Liverpool, Joplings of Sunderland and Robbs of Hexham from the brink of closure after Owen Owen, the previous owner, had gone into administration.

Reports suggest that Vergo Retail has been doing rather well since then. Certainly, the business has been performing well enough to snap up the non-food operation of the Plymouth & South West Co-operative Society (PSWCS) in February this year, including the Derrys department store in Plymouth and four additional Homemaker stores in Devon and Cornwall; and well enough to double the size of the business again, just a couple of weeks ago, with the acquisition of twelve East of England Co-op shops. This latest acquisition includes department stores in Norwich, Ipswich, Colchester, Clacton-on-Sea and Great Yarmouth, as well as six home stores in Felixstowe, Stowmarket, Clacton, Stanway, Dovercourt and Witham, and a standalone jewellery store in Colchester.

These developments are notable for various reasons, not least in being illustrative of the extent to which the UK’s consumer co-operative movement as a whole has recently been seeking to exit the non-food sector. A critical milestone in this respect was the Co-operative Group’s decision, in 2005, to close or sell its 36 department stores; here in the North East, this resulted in the closure of landmark stores in Gateshead, Newcastle, Chester-le-Street and elsewhere, while a few others – including Bishop Auckland, Blyth and (briefly) Berwick-upon-Tweed – became part of Anglia Regional Co-operative Society’s Westgate Department Stores business.

Co-op department store, Tamworth

The impact of the Co-operative Group’s exit from department stores has been significant. First, it has created challenges for those (dwindling number of) independent co-operative societies that remain – such as East of England and, in my parents’ home town, Tamworth Co-op – requiring them to source new suppliers and renogotiate with existing ones, while having to work increasingly hard to maintain gross margins. Second, it has meant that for any societies seeking to merge with the larger Co-operative Group – such as United Co-op in 2007, and PSWCS in 2009 – prior disposal or closure of their department stores has essentially been a prerequisite.

Vergo Retail’s recent moves are therefore significant in that they seem to offer unloved and unwanted Co-op department stores a lifeline - as non-Co-op department stores. In the east of England, there can be little doubt that many of the now-saved stores would have closed had Vergo not stepped in - yet they are all shops that have a loyal clientele; that perform an important function within their respective communities; and that, with some dynamic management and a little investment, could once again be highly successful. Indeed, as Vergo expands its empire, its ability to secure improved supplier terms – and offer better deals to customers – will be enhanced; the very opposite situation to that faced by the few remaining co-operatives with non-food interests.

What is interesting, from a historical point of view, is that I can think of no precedent where Co-op department stores have been acquired, as going concerns, by a non-co-operative retailer; rather, if you were to go back to the 1950s and earlier you would see the process happening in reverse, with independent department stores - such as Newcastle’s Henry A Murton’s in Grainger Street – being acquired by local co-ops.

Vergo Retail's established Robbs of Hexham store

Going forward, much will depend of course on whether Vergo can successfully turn around the mostly loss-making stores that it has acquired; however, the company’s apparent success in reinvigorating Lewis’s, Joplings and Robbs (no-one can forget the sad, plundered interior of Robbs in the days leading up to its aborted closure) bodes well. For me, though, the burning question – and one that I cannot find either asked or answered anywhere else – is how will Vergo rebrand its newly acquired stores in Norfolk, Suffolk and Essex? After all, a store that is no longer a co-operative can barely be called a ‘Co-op Department Store’.

It will be interesting to see whether Vergo comes up with some locally-inspired names, or whether – in House of Fraser style – it seeks to bring some brand consistency to its growing portfolio. Lewis’s of Clacton, anyone?

Thank you to Stephen McKay for the use of the photograph of Great Yarmouth’s Co-op (now Vergo) department store, which is © Copyright Stephen McKay and licensed for re-use under the Creative Commons Licence.