Sunday 25 February 2018

The Marian Prophecy: Kilkenny Group retains that homespun magic

Marian O'Gorman has guided Kilkenny Group through some tough times and now the company is looking to expand again. She sat down with Donal Lynch

Marian O'Gorman cartoon
Marian O'Gorman cartoon
Donal Lynch

Donal Lynch

It's a weekday afternoon in Kilkenny Design on Nassau Street and there is the distinctive buzz of retail recovery permeating the place. Curious tourists peer at craft stalls, a group of ladies indulge themselves with some wine in the cafe on the first floor´, and slow-moving hordes of shoppers thoughtfully prowl through the delicately arranged displays of crystal, silver and brightly coloured textiles.

Upstairs in the boardroom the coffee is as excellent as you would expect - even if the group's charming and straight-talking CEO Marian O'Gorman drinks it standing up to begin with, looking around as though waiting for permission to be seated.

"I'm never in here so this doesn't feel like my office," she smiles, by way of explanation. "My office is the car."

O'Gorman has never flinched at long hours on the road and her flinty tenacity helped the family-owned company weather the storm of recession in the last few years. The Kilkenny Group bucked the trends of the downturn by opening eight new stores between 2007 and 2013, with a 60pc increase in turnover during those years. With no borrowings the group has seen double digit growth through the last financial year - last year turnover was €27m - and, in what might be a surprise to some, over 80pc of that business has been domestic.

"Before the recession we found it difficult to find premises in shopping centres," O'Gorman explains. "Because we source so much of our product locally our margins are much less than if we were sourcing out of, say, China. Therefore we couldn't afford the huge rents that were being charged.

"So when the recession came it actually presented an opportunity. We were able to secure very favourable lease terms. We became more competitive during those years."

O'Gorman says that retail conditions remain challenging because there's "no consistency" in consumer confidence and after the strides of the previous years the last two years have seen a period of relative torpor on the expansion front. That is about to change however, she says. The company is "actively looking" for new premises - mainly in Northern Ireland - and acquisition opportunities.

The real frontier for growth will be online, however, O'Gorman suspects. Over the past three years, the company has invested €250,000 in its digital/social strategy and online store "with a clear focus on the US and UK". She adds that Kilkenny "will borrow to grow, so long as that borrowing doesn't mean a risk of bringing down the whole company."

The cafes account for about 12pc of group turnover and 1,000 people a day pass through the doors of the cafe in Nassau Street, which, with its home cooking and friendly staff, is one of the best- kept secrets in the city.

O'Gorman, a doyenne of retail, was last year named Businesswoman of the Year - but when asked about the relative rarity of female entrepreneurs, and where she developed her own confidence in business, she immediately gestures to the portrait that looks down over the boardroom table where we sit. It is a photograph of her late father Christy Kelleher, who, she says, led by example.

There was no electricity in Killard, Co Cork, when she was growing up there, she says, so he built a windmill to generate it. "He was always working. He always had two of three jobs when we were growing up. He'd sell vegetables door-to-door, he ran a cinema, he went into insurance - selling it door-to-door. He saw tour buses coming into Blarney and saw the tourists had nothing to do, so he decided to open up a shop, a small thatched cottage on wheels - a mechanism which helped, because he had no planning, so it could be moved around. He put it near the castle and we'd sell tweed, Aran wool, Waterford Crystal and Belleek China."

It was under her father's watchful eye that she developed her talent for selling. "I was born to sell. Even was I was aged seven and eight I'd sell hundreds of blocks of GAA tickets. I had money when no-one else in the family had it. I always a very hard worker. We all were."

Everyone in the family worked in the business at different stages, but behind the success there was also conflict. Kelleher's death in 1991 led to a power struggle among his children and, eventually, to a High Court battle in 1999. Marian, her husband Michael and her sister Bernadette went to court to stop her three brothers from ousting Michael from the group board. At the time it was thought that the move was part of a plan to remove Marian as chief executive. The stand-alone Kilkenny group, which had originally been owned by the government, and bought by Blarney, was carved out from the group as part of the settlement.

Marian says that the family have since moved on from the row. "I wish them all the best. Every family business is difficult emotionally. In the end it was a good thing that it happened the way it did and we've never looked back."

Does she speak to her family today? "Some of them, I would like to speak to all of them but it doesn't work out like that."

Aside from any emotional fallout the period immediately after Kilkenny broke away from Blarney was extremely difficult from a business perspective. "I had grown up in the business and I thought to myself: 'Well I was successful there' - but taking me out of there I lost confidence. In Blarney I was sheltered. I'd leave for Killarney in the early morning, around 7am, in the car and I wouldn't be back until late at night and I'd have no lunch, it was so desperate."

Over the next few years (the early 2000s) a perfect storm of SARS, foot and mouth disease, and September 11 decimated the business - which in those years was much more tourist orientated.

"We had a load of stock and had to sell it all off at cost because we'd over-bought. We had to let 10 people go and that was extremely hard because you're talking about people's livelihoods. I was driving up and down to Killarney and it was a very hard time."

At one point Marian entered into talks to sell Kilkenny and was advised to cut costs and strip the business back, in preparation for unloading it. "I did think we'd go to the wall and what did all my friends and family say to me? 'Sell it!' It would have been an option - but to get any kind of a price for it you would have had to be making profit."

As things played out Marian kept her own counsel and in 2004 the business turned a big corner. "I was absolutely over the moon. The first year we made a little profit, then the next year a little more and that continued up until 2007. By the time the recession began we really weren't phased. It felt like whatever happened, it couldn't be more difficult than what had gone. We had the battle fought at that stage."

Kilkenny remains very much a family affair. Marian's daughter Melissa runs the Nassau Street flagship. Michelle runs nine other stores. Her son Greg, who sits in on our conversation, is group marketing manager. Marian also says that the support of her husband Michael was very important in their success.

"I must pay tribute to him really because he gave me the space to work they way I did. How many husbands would do that?"

Given how defining an event the split from Blarney was, how did Kilkenny's formidable matriarch ensure that family conflict could never again shake the foundations of the business?

"Ha! Well that's a work in progress. We have external people on our board. When we go to a meeting there's the four of us and the external people. We try very hard to keep the emotional side out of it. There isn't a lot of conflict.

"If we're away for a weekend, say, we might say we'll give ten minutes to talk about work. I was in town on Sunday with Michelle and I said I'll go with you if there's no work talk. I believe that you perform better in a work sense if you keep it separate."

Bringing in new people to run aspects of the business is important, she says, because it makes things "more professional. Someone else can maybe help you look from the balcony and not be so much in the trenches. People come in with their own skill sets and everyone brings something to the table. From finance to HR to supply chain, we need them all firing on all cylinders."

She denies that Blarney or Avoca - both of whom one might assume are rivals of Kilkenny - are direct competitors.

"The nearest would actually be Carraig Donn, they have little bit of their own product, a little bit from outside, and they support Irish suppliers. Then we would look at what BT are doing as well. But really it's the ethos we have, that our competitors don't have that makes us unique. We focus on design and the customer experience."

She deplores the encroaching homogeneity of the high street and says that supporting indigenous design is one of the key ways that Kilkenny stands out in a crowded marketplace. The company is constantly trying to source new Irish craftspeople.

"The one thing about them is that they tend to be very shy. I'd actually like them to approach us more. We are actively looking to increase the proportion of Irish designers in the store."

Marian still works at upskilling herself and improving her own approach to business. She also says she can see herself taking a back seat at Kilkenny in the not too distant future.

"Well I'm still very energised by it all day-to-day and I'm always trying to think how can we do things better. But also I'm in my early 60s now and I would say that at 65 I would like to move into chairmanship and have someone else run the company. I wouldn't have to do the hours and I could take a back seat."

But one thing probably won't change: "We haven't had any offers and while you can never say never - everything would depend on the offer, if it was great who knows - I think the business will always remain in the family. It's part of us."


'Being trapped by indecision is terrible'

My management style is... "I think I'm too soft but I'm getting better over the years."

My personal investments are... "we had some property. We lost like everyone else but it didn't affect the business. I invest a little bit in stock, lost there too, in Eircom I think, and through my pension fund."

The best advice I've ever been given... "when everyone else is running for the hills, drive your marketing. My father told me that and he was so right. We trebled our marketing spend in recession."

My advice for success in retail is... "research your idea, work hard, know your business and be open to learn. The product and space allocated as well as the price point - those are all very important. Your team is crucial. And the customer is the person who keeps you in a job - never forget that. You also must make decisions - being trapped by indecision is terrible."

My personal extravagances are... "those were knocked out of me over the years. My kids growing up never had designer clothes. We have a place in Spain, I suppose that would be it."

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