The multiples’ discounting mania and the popularity of value clothing makes it ever more difficult for small retailers to compete with the high street, but buying group Associated Independent Stores (AIS) is hoping to increase their chances.
AIS, which was set up more than 30 years ago by the merger of two separate buying groups, Associated Department Stores (ADS) and Independent Stores Association (ISA), offers indies in the UK and Republic of Ireland a buying service, has its own brands and hosts regular mainstream trade shows.
Operating across furniture, homeware and fashion, the latter division has 90 members with 166 stores. In the year to June 30, 2012, AIS had 367 members across all divisions, representing more than 1,000 stores with a combined retail turnover of £2.1bn.
Commercial director David Standing explains: “AIS’s primary objective is to improve its members’ profitability by helping them compete with multiples. And as well as doing this through sourcing and buying channels, it also adds value in other areas such as procurement, marketing and general business support.”
The group has had a major overhaul this year, with its trade shows, held in an exhibition space at its offices in Shirley, near Solihull, revamped. The shows, some of which were branded Aimex, now all fall under the Indx banner to provide consistent branding. AIS hosts eight fashion trade shows across the year covering menswear, womenswear, intimate apparel (which includes lingerie and nightwear) and fashion accessories.
Jenny Clarke, merchandising director at independent department store Stringers in Lytham, Lancashire, says AIS’s exhibitions have “moved on significantly” this year. “Its accessories show was really useful, with some good handbag brands and some nice in-season product. It is working hard to bring more brands in so they are relevant.”
Standing says the show revamp means AIS has been able to present an improved proposition to attract new exhibitors, claiming it was a contributory factor in the sign-up of about 60 brands across its events this year.
Brands include Weird Fish and Esprit in menswear and Adini and Seasalt in womenswear.
Changing people’s mindset will of course take time, but Clarke says it is “going in the right direction”. She adds: “It’s making the right noises. There has been more emphasis on visual merchandising and theming, so it has had more of a creative feel too.”
AIS’s group buying service gives it the power to negotiate on trade terms, exclusive product and member-only promotional deals. The group has a centralised payment system, called Cenpac. All retailers are invoiced through this by AIS, which chases up late payments or settles any other issues. Therefore suppliers are guaranteed to get paid on time and in full. AIS will even make the payment if a retailer goes bust. The scheme also cuts administration costs for suppliers and members.
One of the biggest advantages AIS provides is its own brands, which are exclusive to its members and generally offer higher margins than other more widely available brands - it aims to offer at least a three-times mark-up.
“AIS members are faced with pressures on margin and the behaviour of many leading concession brands in respect of online selling and the practice of ‘showrooming’,” says Standing. “The growth of ecommerce in general, whether pure-play or multiples that have significant investment pots is another threat to smaller or more traditional bricks-and-mortar businesses.”
In a bid to help indies harvest a higher return and also reach a broader customer demographic, the AIS own-brand offering has been subject to a makeover in the wake of last year’s appointment of new director of fashion Paula Fowler, who previously had a long career at Debenhams.
Members have praised AIS’s transformation of its womenswear for spring 14, with stockists upping their orders by as much as 100%.
Its First Avenue label has been split into Classic and Collection ranges, which were debuted at the Indxwomenswear show on August 7-9 at Cranmore Park. Classic is aimed at the older core customer and Collection has a more contemporary look. Retail prices across both range from £9.99 for a viscose top to £50 for a printed stretch Lycra dress.
Nick Brown, managing director of department store Browns of York, says the refreshed womenswear has been a great move, enabling indies to stand out on the high street.
Wendy Cole, fashion director at East Anglia-based Palmers, which has four department stores in East Anglia, says: “Since Paula started she has rapidly moved on First Avenue, which was needed to compete with the multiples. She has brought through style, quality and margin.
“This season it is looking really good. It has taken a while to separate the line [into the Classic and Collection ranges], but it is really going well in store. We needed new colour and new product development.”
The figures speak for themselves - orders taken at the spring 14 Indx womenswear show were up 38% compared with two years ago.
The enhanced menswear offer, which launched in February with a new website and designs, has also been praised by retailers.
The James Aubrey range, which has two lines, Heritage and Collection, includes a selection of British-made garments and retails from £45 to £299 for a full-length Harris Tweed coat.
Standing says throughout the next 18 months there will be further developments to the ranges to appeal to a broader cross-section of shoppers. Stockists told Drapers that AIS’s mainstream menswear line Kingston, which retails from £7.99 for a basic T-shirt up to £40 for a sweater, could benefit from having similar treatment to the womenswear ranges. “They need to update it so it appeals to a younger man,” says Cole at Palmers.
This year has also seen the launch of AIS’s footwear division from brands such as Rocket Dog, Lisa Kay Shoes and Ruby Shoo. The offer has been widely welcomed by indies following the collapse of handbag and footwear business Jane Shilton, which previously operated concessions in some AIS members’ stores.
Standing says he believes the expansion into footwear has “more potential in 2014 and beyond”. It launched in February with six exhibitors and has expanded to 13 over its first two shows.
Despite the economic environment remaining tough, Standing insists the indie sector has been holding up and AIS has sustained its membership levels: “We are proud to say that our churn is very low with new members offsetting any losses.” The economic downturn has also encouraged AIS to adapt and prepare for the future.
“Of course, any independent retail business that does not look to move with the times would certainly be at risk in these extremely competitive times,” says Standing. “Therefore we are continually reviewing and improving the service we provide, such as delivering own brands to a wider customer demographic, continually reviewing our supply base and improvements on margins.”
Words by Victoria Gallagher
Drapers - 2nd November 2013