Wednesday 13 December 2017

Success of Avoca is woven from eclectic mix of threads

The iconic family-run business 'follows the light', trying out new ideas in a move to keep the shoppers coming through its doors

DIVERSE: Simon Pratt, managing director of Avoca, a mix of retailer, wholesaler, manufacturer and food producer, with Sean Gallagher
DIVERSE: Simon Pratt, managing director of Avoca, a mix of retailer, wholesaler, manufacturer and food producer, with Sean Gallagher
Sean Gallagher

Sean Gallagher

WHAT started as a small hand-weaving mill in the village of Avoca in Co Wicklow, in 1723, has grown to become one of Ireland's most well-known and loved retail companies. Known today as simply Avoca, the company employs 750 staff, operates outlets in 11 locations throughout Ireland and this year will see its turnover top more than €60m.

It's lunchtime when I arrive to meet Simon Pratt, the company's managing director, in one of his flagship stores in Rathcoole, just south of Citywest, on the busy N7 motorway. The car park is almost full and there's a steady stream of people coming and going.

Inside, there's a small queue waiting patiently for tables in the upstairs serviced restaurant while elsewhere shoppers browse leisurely throughout the multitude of departments.

It's difficult to sum up the business in a single sentence. Simon describes it as being a blended mix of retailer, wholesaler, manufacturer, and food producer.

"A customer once described the experience of browsing through our stores as being similar to exploring a treasure trove. You find something new every time," says Simon.

There certainly is an eclectic feel to the place with shoppers able to buy everything from fashion, knitwear and jewellery, to homewares, ceramics and the company's now famous rugs and throws. There's even a book store where you can buy, among other items, some of the company's own recipe books.

It's easy to see how Avoca was recently voted Ireland's Store of the Year, as well as being selected by international trade magazine, Retail Week, as one of the 100 Most Inspirational Stores in the world – right up there with Bloomingdale's in the United States.

"The origin of the company dates as far back as 1723," says Simon. "The village of Avoca was, at that time, home to Europe's largest copper mine. A mill was set up locally to grind corn for the workers. Over time, the mill began weaving fabric, by hand, to make clothing for the workers and their families. That's where the name Avoca Hand Weavers originally came from," he explains.

In 1974, Simon's parents, Donald and Hillary Pratt, bought the old mill which was, by then, almost defunct.

"My father had been a solicitor up to that point. He was more of a risk-taker than my mother and she often reminds him how she thought he was out of his mind to buy the place," says Simon with a hearty laugh. "However, once the decision was made, they both poured themselves into the business, determined to make a real go of it," he adds proudly.

From humble beginnings, the enterprising couple began selling their fabrics from the back of their car. When their efforts to attract international wholesale buyers to their Avoca-based mill wasn't working, they decided to open a purpose-built showroom closer to Dublin, in Kilmacanogue. The outlet became a great success, attracting not only wholesalers but local shoppers as well.

With their business now taking off, the couple decided it was time to diversify and so began manufacturing clothing from the fabric they were weaving. As more and more customers arrived, they began introducing ranges of other products such as ceramics and knitwear which they sourced from other producers.

Over time, however, Donald and Hillary came to the realisation that in order to differentiate themselves from other craft shops who stocked the same products, they would have to start developing their own branded products.

"In that way, they were able to build their own brand while at the same time becoming masters of their own margin," explains Simon.

Simon joined the business full-time in 1990 having studied business and politics in Trinity College Dublin.

He was joined soon afterwards by his sister Amanda. She had a unique flair for design and quickly set about developing the company's own range of products which included fashion, rugs, scarves, candles, soaps, ceramics and knitwear.

"It's always been our philosophy to follow the light," explains Simon. "We try new things and if they work, we keep doing them. If they don't, then we stop and move on," Simon adds.

One example that did work, however, was their decision to introduce food services into their stores.

What about the challenges of running such a large and diverse business?

"The key challenge is definitely the labour-intensive nature of the business," Simon explains. "We do things the long-handed way here; like using real flour when we make bread or peeling potatoes from scratch. While this gives us full control of the production process, it also gives us a lot more work to do and a higher labour requirement," he adds.

"As a family-run operation, it's hard to grow a business like ours without access to external capital for investment and expansion. Big businesses can issue bonds, whereas smaller businesses rely on access to bank borrowings. Trying to fund the opening of a new store from retained profits definitely makes expansion a much slower process," he admits.

I ask Simon if the downturn in the economy and reduced discretionary income has had a knock-on effect on revenues.

"While the number of customers visiting our stores has remained constant, the average spend per item is definitely less than at the peak," admits Simon. "To counteract this, we have had to ensure that each store stocks product ranges that are in the more affordable category."

Not content to stand still, and continuing to see opportunities in the market, the company recently opened Salt, a food-only, standalone, store in Monkstown, in south Dublin. Simon explains how he envisages such food markets and cafes becoming a part of the company's future growth strategy.

With all its success, Avoca still remains a family-run business. Although Simon is managing director of the company, his parents, Donald and Hillary are still very much involved. His sister, Amanda is head designer, his other sister; Vanessa, works in the retail side of the business while his brother Ivan looks after the mill and wholesale divisions.

What advice does he have for other retail business owners who look longingly at his company's success?

"Retail is generally a low margin business. For that reason, success is not about getting a single sale; it is about building a long-term relationship with your customers in the hope that they will return to your business time and time again," he states categorically. And Simon Pratt should know.

He heads up a hugely diverse and complex business. It's a business that is easier to experience than it is to explain.

He and his family have succeeded in building an iconic Irish brand of which we can all be proud. Together, they have managed to create a winning formula for retail success that would be at home in just about any part of the world.

I leave, wondering will we ever see Avoca stores opening in towns and cities across America or the UK. I can't see any reason why not.

Sunday Independent

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