Monday, February 13 2012

Small Business

Interview: Simon Pratt director, Avoca

Family focus on success pays off with a unique retail experience

Diversity key to insulating company from market woes

Simon Pratt, director of Avoca, believes there are challenging times ahead but that the company is well placed to cope with any downturn

Simon Pratt, director of Avoca, believes there are challenging times ahead but that the company is well placed to cope with any downturn

By Roisin Burke

Thursday September 25 2008

If you set out to establish a business like Avoca, it would probably never happen. "When you think about the diversity of what we do, it's kind of ludicrous," director Simon Pratt admits.

The multifaceted business model breaks the mould in terms of what might look sane and sensible in any business plan or investor pitch.

The gourmet food, the artisan bakery, the weaving mill, clothing lines, accessories, the design studio, café, casual dining, gardening nurseries and all manner of fallalery retail in outlets that are mostly set in large landscaped grounds.

It's an unprecedented mix of lifestyle and retail offering. But it's one that works very well indeed.

Unusual

Equally unusual is the completely flat management structure. There is no 'boss' at the helm of this equitable Avoca family affair.

In recent years Pratt's parents have transferred a greater amount of shares over to the four siblings involved in the business, but "we've all essentially got one voice and one vote.

"It's important with us that no one has tried to push an individual agenda or individual authority. We've stayed miles clear of anything like that. So we have a very flat structure and respect for what each other does," he says.

It sounds almost too good to be true, particularly when you bear in mind some of the epic Irish family business fallouts such as the Dunne and Coleman family feuds.

"I could give you examples where business becomes too central and destroys the family, and we've always felt it wouldn't be worth it. We've always felt we'd never let it get to that stage."

He wouldn't attempt to claim that it's plain sailing all the time. "There are strong personalities," he admitted, "but if one of us is successful in doing something for the company it's for all of us.

"I don't want to be my brother's and sisters' boss and similarly they don't want to be mine, but they'll be trying their damnedest to bring success to their area of the business."

So it's a case of healthy competition then? "Not even competition, because if something works for me it's for them too. It's just about making the company stronger and better."

The company has come a long way since the late 1980s when it was one of the country's main makers and purveyor of rugs, throws, scarves and tweeds. Even now it still has to push hard to get past the perception of being "somewhere that sells bolts of tweed", as Simon Pratt himself puts it.

So how is business now? Not bad if you go by last year's €50m turnover. But where is it going? He didn't duck the question. "It's a challenging time, no doubt. We're still ahead this year, so I would be concerned about the rest of the year. But so far I think we're doing better than most people.

"Anecdotally, from what I hear, there's nothing but doom and gloom. Like for like we're up by 5pc on last year, but in the last couple of weeks there's no question but the ripples are there and the last few weeks have been tougher than expected -- the culmination of holiday time and I suppose the ripples just getting bigger."

Things will, he believes, get worse before they get better. "I don't expect Christmas to be anyway bumper. I think the casualties in this business will be after Christmas. I would say there will be a lot of people in trouble."

There are urban outlets in Ireland, in Dublin and Belfast and the US but there are also the purpose-built outlets at Kilmacanogue, Rathcoole, Powerscourt and Mount Usher.

He feels that the variety in Avoca's business model has been a saving grace and meant customer footfall hasn't plummeted the way it might have for many retailers.

"Avoca has this mix of offerings that feeds into the whole business. It's not protection but it is insulation. Here people do come through the door even if it's lashing rain, for lunch or a browse -- so far. It's not enough to keep you buoyant in this market but I think there is a little bit of insulation around that."

Recession

There is a big element of the 'day out' about the Avoca product offering. You can have a coffee or a meal, the kids can play in the grounds, you might see a garment you like or bring home some scones or some deli nibbles for later.

"It's not likely to be the first thing you cut out, it's not like the big holiday or the car, the house, the kitchen, things that could be long gone," said Mr Pratt.

The key to tackling the recession for the company, he reckoned, is to up the ante and try harder. "What you have to do is assume that the pie is shrinking but you have to be as innovative as you can to get more of the pie. That would be our mantra.

"We need to do better service, better ideas, giving the customer more. While we're certainly not immune to any downturn, we make sure we keep doing what we do as well as we can."

There's been a lot of growth and expansion but it's time to be conservative now. The Belfast store opened last Christmas, the gardens at Mount Usher were taken over by Avoca last spring, Rathcoole is three years up and running and Kilmacanogue was recently revamped.

"We're trying to consolidate what we've done in the last couple of years, and focus on making them work."

That said, the company is keeping a half eye open for possible commercial retail property bargains.

Buying sites outright is part of a plan to bring more solidity to the business. "It makes a better proposition compared to a high street where we're paying market rent and there's more inherent value in it. It is incredibly capital intensive but building valuable assets as well."

The family members are the creative driver behind a company that gains a lot of edge from being so different to anything else out in the retail arena. Mr Pratt and his sisters do most of Avoca's buying.

The London-Design-School-trained Amanda heads up Anthology, the bigger of two clothing lines and buys a lot of womenswear and the siblings jointly buy houseware and giftware, while Mr Pratt buys food and menswear and Vanessa does all the buying for the children's clothing lines.

The company launched its online retail presence over a year ago and the clothing lines go to 300 odd stockists in the UK. But despite the credit crunch, the company has resisted slashing prices to avoid denting the value of its brand.

"So far we've tried to keep our prices where they have been but give people more in terms of value and experience.

"We don't go into big sales every few months, so people know that when they see a price that's what they pay and they're not going to suddenly see the same thing for half the price next week.

"That's something that has caught on with some big retailers. I think it does undermine the brand and it becomes something that people wait around for. People have more confidence in what you're selling, in the brand."

Yet he acknowledges that nothing is set in stone in this climate. "If things got bloody awful in six months time we'd see then. So far we'd be trying to focus on our cost inputs and hold our prices where they are.

"We're fighting price inflation coming in the back door, which is the hardest thing, particularly on the food side."

In terms of a five or 10 year plan, expansion is on the cards with potential new stores in Dublin and Cork and possibly the UK, but growth at any cost is not what is important to the Pratt family.

"We have an unusual Irish owned company that is not to formula, with a mix of unusual quirky things to it that are fun to do.

"We'd prefer having a smaller number of unusual places than having a large number of watered down versions of what we could do better. We're not hell-bent on being a huge organisation instead of an artistic, creative, smaller business."

- Roisin Burke

 
 


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