When one looks back over the innovation of the past 25 years, it is remarkable how our world has changed thanks to technology and changing markets. For any business to survive for over 150 years the need to stay current and adapt to change is essential; when that business counts fashion as a major element, the necessity is magnified.
Such has been the case of Stuttafords Group, a chain of traditional department stores and smaller stand-alone mono brand stores, which made its name selling luxury items to the high end of the South African market.
The business was founded by an English immigrant family called Stuttafords, who arrived in Cape Town and started the company by replicating the typical department stores of the day back in England.
“The department store business model expanded across South Africa over time and the country housed probably a half a dozen such competitors modelled on the UK design, with Stuttafords becoming a well-known high street brand in the process,” says Hilton Mer, Executive Chairman of the Stuttafords Group.
“Some of the competitor stores became consumed by the Stuttafords Group and others disappeared. Today we operate two core businesses channels, with 16 department stores located in the 4 major metropolitan areas (and a presence in the capital cities of Botswana and Namibia) and a series of mono brands which are stand-alone outlets, dealing variably in clothing and cosmetic products.
“Whilst there are other department store chains, Stuttafords is the only traditional type store remaining – you might say we are the only specimen left!” he continues.
Over such a long period of time, the Stuttafords name has developed a reputation for high quality, luxury brands and is an internationally recognised fashion company, stocking the world’s leading brands including exclusive local rights relating to products such as: GAP, Banana Republic, French Connection, Tommy Hilfiger, Oaktree, Ted Baker and 46664.
“We represent a certain end of the market and our focus is not typically mass-market oriented,” Mer explains. “Our presentation represents luxury and we offer for sale only brands – we do not sell generics. These are often international brands and where appropriate we also look to support local brands.
“We have 3 primary departments: clothing and apparel (which remains our largest area), cosmetics and housewares. Each department then has sub-departments, so we have men’s, women’s and children’s clothing, along with hand bags and other accessories, and footwear. In cosmetics there are 3 sub-departments covering skin care and beauty, fragrance and make-up, while the housewares section is divided into “hards” and “softs” encompassing dining room table top supplies such as crockery, glassware, dishes, ornamentals and cutlery – and pots and pans. The “softs” cover bathrooms and bedrooms and include towels and bed linen,” he continues.
Mer says that because of its target demographics of middle to higher end consumers (the company redefined its target market in 2010 when Mer joined) the privately-owned company is very particular about the location of each department store. The oldest existing stores date back 50 or 60 years and the Stuttafords brand is established exclusively on South Africa’s high roads.
The seasons of course, also have a huge impact on fashion and therefore Stuttafords’ stock control.
“We hold between 80,000 and 100,000 line items at any one time and host roughly 250 brands. When I joined Stuttafords Group in 2010, I felt that we needed to refocus and redefine ourselves as a world of brands.
“We review brands on a daily basis, looking at what is selling, what items sell at full price, what stores are selling items in volume – and our merchandise department reviews sales and trends and makes decisions on which brands and items we stock and in what volumes,” states Mer.
“We scout and monitor for brands and sometimes have to make tough decisions if a line is not selling. Business is business and we try to maintain good, cordial, respectful relationships with our trade partners but we also have to be certain that an item fits our portfolio and trades successfully.
“Where we procure apparel merchandise locally we might anticipate a new season 2-5 months ahead, while for imported products, which are usually shipped into the Port of Durban (or sometimes Cape Town), this can occur 6 to 9 months ahead of the season. Items are then transported by road to our central warehouse in Johannesburg.”
Of course fashion is a fast-moving business and the challenge for the group’s merchandisers is to monitor trends virtually in real-time, to ensure that Stuttafords doesn’t overstock items and that the fast-selling items are always easily replenished.
Mer says that order forecasts are typically based around historical demand and a feel for growth expectations which is often derived from existing data on trends.
“Of course some goods sell as anticipated and some sell ahead of expectations, while some are less successful; we try to manage the rate of sale when we think it has slowed down on an item and we monitor sales closely,” he confirms.
To achieve this, on his arrival, Mer introduced a new IT system called Qlikview, within his first 6 to 8 months, as he recalls:
“When I joined we didn’t have a best of breed management information system in place and one simply cannot run a business like ours without full and easy access to relevant information.
“Today our merchandisers can look at live sales data within in just 10 minutes of real time – that is how long it takes for the latest sales information to go live from any of our stores. The merchandisers can review performance every morning through a series of reports and can tell within an hour what is selling, what’s not and what is selling at the right price.”
Whilst the global economic downturn of 2008 had an impact on all markets, Mer says that its effects on Europe and North America saw South Africa start to trade more consistently with China, India and the rest of Africa. He says that Stuttafords continued to grow on account of South Africa’s unique set of circumstances, which embraces these newly enhanced international trading relationships coupled with the elevation of a new, black-empowered emerging middle and higher end consumer society.
“The circumstances added more consumers into the economy and that caused further growth stimulus in South Africa, while other economies did not have that unique historical opportunity. I believe that all traders need the following mindset: one has to feel that there is a purpose and optimism and one has to find the reasons to be optimistic and to pursue them.
“There isn’t a single business opened in 1858 that is still doing things the same way and one needs to adapt to circumstances.
“Southern Africa offers us potential but we have lots of opportunities in our existing territories (South Africa, Botswana and Namibia) and that will be our primary focus for the next 18 months or so. There are various upliftments already taking place in many of our stores, while our smaller stand –alone sites also offer expansion opportunities.
“We have opened a number of outlets over the past 18 months and invested in new looks and feels for a number of our older department stores – all of which has contributed to our growth and the last few years has seen increased turnover and operating profit.”
With its focus on an extended range of world brands at competitive prices, the Stuttafords name is likely to continue to represent the highest values in South African high street retail therapy for many years to come.