Denby builds for growth Pottery + property = inspiring brands + expanding revenues

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Denby builds for growth

How can a property estate be used to relaunch a 200-year-old heritage product, keep its modern consumer brand firmly in the public eye, generate rapidly expanding £ multi million revenues and make major financial savings along the way?

Strategically restructured Denby Pottery has carefully broadened its traditional wholesale manufacturing base out into the high value, fashion led retail sector.

By doubling its prime site factory outlets from 14 to 28 in only 18 months, with a 75% retail sales increase, HRPS (Hilco Retail Property Service) has shown that hard-working property portfolios can be turned into much more than just passive bricks and mortar.

Property power
Denby's property estate has been central to the company's successful business transformation and is a good example for forward-looking IPs of what can often be achieved when the power of buildings is put to work.

The company's Derbyshire manufacturing centre attracts 250,000 visitors annually. But after 200 years, a recent restructuring review of its brand architecture found that shifting the business emphasis from pure manufacturing towards a brand-led strategy, with the launch of important new product lines, was a more appropriate approach. New jobs have also been created.

Cashing in on all opportunities
Hilco Retail Property Service (HRPS) quickly realised the opportunity. A HRPS team was appointed by Denby's new owners to increase retail sales by expanding Denby's factory outlet portfolio. A crucial caveat was that the company's core wholesale business must not be compromised. This includes a well-established presence in major department store groups that include John Lewis and House of Fraser.

HRPS' solution was a complete and cost-effective turnkey operation that left Denby's main management team 'hands free'. It involved identifying new outlet sites and carrying out all lease negotiations. The package also included agreeing Heads of Term with landlords and legal negotiations carried out through a fixed fee agreement with a third party lawyer.

Store design, roll out project management and store fit out were similarly core parts of the successful project.

Early cashflow
'By taking an integrated approach we were able to open 14 new factory outlet stores at prime centres across the UK in 18 months on very favourable lease terms that are proving highly-profitable,' explains HRPS CEO, Andrew Lucas. Many of the stores have generated an early cash flow to offset on going capital costs.

HRPS' philosophy that modern companies must make their building work hard has been central. 'Property is not a dormant asset,' adds Andrew. 'This is our focus. With our extensive experience and imagination, plus close sector contacts, we see property as a very dynamic part of every business's strategy. The financial benefits illustrate this clearly.'

We regularly talk to the managers of companies large and small where the full commercial potential of buildings and real estate is an overlooked factor that can increase brand exposure and awareness, open up early new income lines and cut costs dramatically at the same time.'

Major cost savings
In Denby's case, this meant initial capital cost savings of more than 30%. These were achieved through better sourcing and innovative design solutions. It also included the very effective reuse of existing infrastructure, service and fixtures whenever possible and practical. Warehousing was moved to a lower cost third party location.

Ensuring a full range of stock was available to the public and an appropriate product mix, improving in-store sales material and increasing promotional activity have also been important.

Crucially, by working on a turnkey basis, HRPS was able to protect Denby's management team from unwelcome distraction and free to focus on their core manufacturing and wholesale business.

For more information please contact Andrew Lucas

The Marketing Innovation Group Ltd.
PO Box 427, Knutsford,WA16 1EH
Registered in England & Wales. Company No. 06963849.