New for old Alworths – remember the name, because if Andy Latham has his way, the brand could one day become almost as big as that of Woolworths on the UK high street. Noella Pio Kivlehan reports
Andy Latham is following the George Foreman mantra for business: “It’s so good, I put my name on it.” Although Latham’s product is not a “lean, mean grilling machine”, it is the type of item he would consider selling in his Alworths stores, the latest of the Woolworths clones to hit local high streets (see panel, p13).
Like the name – his initials combined with Woolies’ “worth” – Latham believes his chain of stores, which number six so far, is a better version of the old company. And having worked for Woolworths for 28 years, rising to be head of store and concessions development before the company’s demise in January last year, Latham should know.
But,with a warning last October from Shop Direct, owner of the Woolworths name, about a similarity in fascias, which is still ongoing and which Latham refuses to comment on, he is quick to point out: “We are not Woolies reborn. We are the best bits of Woolies with a wealth of experience on the team.”
Latham has eight former Woolworths headquarters staff on his 15-strong team at the Alworths headquarters in Redhill, Surrey.
Marking out the difference between the old and new companies, Latham frequently uses the word “clutter” and says: “At Alworths we want to create space, viability and we want to be uncluttered. If you are a kids-focused store, then it needs to be much cleaner, much tidier and much easier to move around. We want to have those elements of exploring without the mess and the clutter.
“There was this feeling that the more product you had on the shelf, the more you would sell. But for me it’s not about that, it’s about being uncluttered and allowing customers to move. I think Woolies was trying to do that – to declutter – but it was too late.”
He says Alworths’ merchandise is “more an aspiration product in our stores, like home adornment”.
“We do a range of £1-type goods, picking up on the furore for them, and we have gone a big way into branded toys like Monopoly and Barbie dolls. What we try to do is offer value in its truest sense. It’s not cheap, but you get what you pay for. It’s quality merchandise at competitive prices. We are not aiming to be Poundland or top end. We are aiming to be middle ground.”
After opening the first Alworths in Didcot last September, followed by five more, Latham plans to have 22 stores, ranging from 3,000 to 8,000 sq ft, by the end of 2010. The plan is to have up to 100 stores by 2015, by using money resulting from the success of the original 22.
But getting funding for the first batch of stores during the recession was difficult. Latham admits: “It was a real challenge; it took six to eight months longer than I had hoped and some of the site locations I wanted went in that time.”
Crediting good fortune, Latham found a financial backer within his own family. “I managed to get private funding from a family member,” he says. “None of it is my own money. I would say, diplomatically, that the amount of money is sufficient to fund a chain of 20 to 22 stores.”
Target locations are on local high streets in small to medium-sized towns and cities across the UK. Alworths has opened in Didcot, Amersham, Evesham, Warminster, Wokingham and Cosham, Portsmouth. The stores are leasehold because, as Latham explains: “I don’t have enough money to buy freehold. We are not planning on being in the city centres. We are not planning on being out of town. This is local high street regeneration.”
Analysts consider this a smart move. “Woolies failed for good reasons,” says Richard Perks, director of retail research at Mintel. “The big sites just didn’t work. Where it did work was in secondary or tertiary high-street sites, so it makes a lot of sense for someone like Alworths to come back and take those sites. I would say to Alworths: stay away from the major high streets.”
Despite its problems, elements of Woolworths still drew customers and this convinced Latham there was still a market for that style of shop, but in smaller locations. “It dawned on me that there was still a desire for local high street shopping,” he says.
“Woolies still took a lot of money and had a lot of sales, but it had difficulty in adapting to the market. Historically, there were a number of leases the company had signed that made no sense, but there were 300 to 400 stores [out of the portfolio of about 800] that were profitable.”
But Latham admits that the death of Woolworths on the high street “did open an opportunity for us as a landlord keen to get deals”. He adds: “We have been offered incentives, but landlords aren’t giving away Christmas presents. At the end of the day, we have been fortunate with the stores we have”.
There is more to site location than just good fortune, as Latham reveals: “The advantage I have from being an ex-Woolies employee is that I can remember where the good locations for Woolworths were.”
Latham knows that an Alworths store is likely to work on a site that used to be profitable for Woolworths and, so far, he has chosen the right sites for the customer.
“Our Christmas sales profits were in line with expectations,” he says. “Our sales the week before Christmas were exceptionally good, better than we thought they would be, because people bought at the last minute.”
Latham says he always planned to open five stores before the festive season. “We needed to be open before Christmas because of the type of store we are. Christmas, for me, was about understanding what potential there is in the market. And, of course, the November and December sales are vitally important. We pushed out the openings as quick as we could in order to get an understanding of what lines would sell and what wouldn’t.
“On opening our first site in Didcot, there was a massive sense of pride. From getting funding, we opened a store in 66 days, and also created a business in 66 days, but we were aware we could do a lot better. Being MD of Alworths and running my own business is a very different experience from working for a big corporation for 28 years. We make quick decisions – we can look at a site and agree it within half an hour rather than three weeks.
“We learned a lot from the five sites opened before Christmas, from all perspectives. For instance, space location for entertainment products – our customers expected more space than we were going to provide.
“We also went through a learning curve with supply of stock. We were receiving it direct from suppliers, whereas in Woolies’ days we got it from a distribution centre. We only started sourcing product in September, but now have the buying cycle right in time for this year. Many of our suppliers are ex-Woolies, but we also have new suppliers.”
Talk last year that Woolworths might launch onto the high street again does not bother Latham. In fact, he would welcome the brand back. “To some extent, it would be a vindication that the market is still there and that people want that type of retailer.”
For now, Woolworths is enjoying a new lease of life as an online retailer – a move Latham vows never to consider. “Operate Alworths on line? Never. That absolutely does not fit with the product.”
What does fit with his product is selling through his stores, and having faith that this is what the public wants. “We want to make Alworths work,” says Latham.
“The key thing is the belief that there is still a market out there.”
ANDY LATHAM
WOOLIES REVISITED
Since the demise of Woolworths in January 2009, several clone fascias have appeared on the high street. Along with Alworths, Wellworths, Well Worth It, Wellworth it! and WeeW are among those that have opened to grab a piece of the market.
