The strength of independence
Kathryn Shuttleworth, MD of David Luke, presents her views on the changing landscape of the schoolwear industry and government influences on the sector.
By Laura Turner
13 April 2016
Kathryn Shuttleworth, managing director of school uniform and sportswear supplier David Luke, presents her views on the changing landscape of the schoolwear industry, the government influences on the sector, and her strategy for David Luke in light of these developments.
With the schoolwear market performing strongly, retailers can feel confident in being in a positive position. But as changes in the market continue, with the perception that it is time for consolidation and vertical integration, we need to work together to retain all the advantages of independence that will keep the market strong and serving well.
As I’ve travelled round the UK visiting David Luke customers, I’ve been struck by the strength of the UK independent schoolwear retail market. There is huge diversity in local markets and great differences in the retail style that is supplying them. But one thing remains constant: independence.
Offering schools choice is an unrivalled competitive advantage for independent retailers. Getting the right product-to-school fit, at the right price, is something that cannot be done at the brand level of the market when only offering a single range.
Additionally, to be able to service a school effectively online and offline; knowing the issues faced locally; understanding the demands and requirements of the schools’ personnel and tuning in to the parents’ and students’ preferences all take understanding and knowledge. To then supply the appropriate product into that market to bring the most benefit to the school takes skill and access to great options.
The so-called ‘Australian model’, where national suppliers win contracts with schools and deliver their product through a local retailer, assumes a weak retail sector, unable to win contracts for themselves and without the resources or skills to determine supply terms.
But this is not what I see around the UK. Of course, there are examples of a lack of succession or finance leading to a dearth of supply in a certain area and this gives the opportunity for some national suppliers to benefit. Where retail is strong, however, national brands find it hard to gain traction.
So, is it time to ask ourselves how important this independence is? Are we happy to operate in a market where the terms of supply are beyond the control of the independent retailer? Will the model work if the independent retailer loses a contract with a school to a national supplier but agrees to a joint supply arrangement, whatever the cost?
With government changes likely to bring about an emphasis on the tender process, new knowledge and skills may need to be learned so success at this does not become the privilege of those with the resources to ‘wow’. Independents have much more depth in their armoury than a fancy presentation. All independent retailers should be looking at the list of academies and schools in the process of transforming (www.gov.uk/government/publications/open-academies-and-academy-projects-in-development
) rather than waiting to be handed the school at a predetermined retail price when the costs of managing it make it unviable for the national supplier.
If the organisations that take a direct-to-school marketing approach see the benefits of this model, both from winning schools faster and an acceptance from retailers, the changes to the market could be far-reaching.
The depth of financing and stockholding to manage the peak we enjoy in our market is shared between the elements of our supply chain. Consolidating those elements, or having little control over pricing and margin within them, could start to reduce the amount of credit and stock available and cause a severe deterioration in service.
If the boundaries of factory, supplier and retailer become too blurred, all trade becomes fair game. The suppliers who retain a policy of supporting retail will quickly need to adopt new models if there is no reciprocal support in the face of this threat to independence.
But let’s not get carried away. Changes like this are not new. And in spite of the threats, independent retail in schoolwear remains strong. It is hard to foresee a time when schools will welcome uniform being made available out of large sports kit warehouses on industrial parks such as Shirebrook, perhaps. The independent will always be able to keep its values more closely aligned with the schools it serves, than those without such freedom.
At David Luke, we carried out our business succession at the beginning of this year to preserve our independence and enable the continuation of our values. Working closely with owner-managed factories and owner-managed retailers, we have structured our succession to ensure our own owner-managed status continues well into the future. We’re all 30- or 40-something, with the advantages of the founders still being involved, along with quite brilliant staff, and we all care deeply about what we do.
We believe strongly in this market and that the strength of independents is key to its success. Between us all, we are a network of businesses who are all striving to deliver the best service possible. Vertical integration may suit some sectors but in this complex network of specialised products and services, with a uniquely intense peak, it is important we work with those who respect the market and the place we each have within it.
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