As a For-Sale-sign looks set to be hauled over TM Lewin, Retail Week takes a look at the business that has become famous for its four-shirts-for-£100 offers.
Who established the business?
Originally launched by Thomas Mayes Lewin on London’s Jermyn Street in 1898, it gained reputation for high quality shirting and was a major supplier to the RAF and British Army during both World Wars. It was then acquired by the McKenna family in 1979.
Who owns it now?
TM Lewis chief executive Geoff Quinn has been the majority shareholder of the chain since leading a Royal Bank of Scotland-backed £50m management buy-out in May 2006. Quinn currently has a 31% share and a further 52% split between the management team. Minority shareholder Cavendish Square Partners, which accounts for the remaining 17%, is thought to be driving a potential sale as it looks to exit.
What is Quinn’s background?
Quinn joined the business in 1980 and worked up the ranks to become managing director in 1993. He was noted for keeping the business going when its owners – brothers Chris and Tony McKenna – died within four years of each other. Under his leadership, the chain broke the £100m sales barrier in February 2011 and has expanded rapidly overseas. Quinn hopes that international sales will break £100m mark in 2016.
How many stores does it have?
At the start of 2013 it had 87 stand-alone stores in the UK, around half of which are in London, and 13 concessions in House of Fraser.
And what about its international presence?
While it had long been sold internationally via online and through wholesale, since 2008 it has been expanding overseas through franchise partnerships and concessions. It currently has seven franchise stores in Singapore, two in Malaysia and one in the Czech Republic. Meanwhile, it has one concession store and one stand-alone store in the Republic of Ireland, and a further five concession stores in Australia and, as of early 2013, one stand-alone store in Sydney. It has also signed a franchise deal with Brand Marketing India and a joint venture for the Middle East has also been mooted.
How is it performing?
The retailer has seen sales growth slow in recent years and overall sales for the 2011/2012 financial year slowed by 6.1%, with turnover rising to £106.7m. The UK stores sales advanced 1% to £75.5m, while domestic home shopping sales accounts for £9.5m. Operating profits for the year slipped to 18.4% to £7.5m. Falling sales and profits have been attributed to the challenging economic environment, 2011 VAT increase and the rising price of cotton. Sales from Europe, including online, are thought to account for £13m, with the rest of the world contributing around 12.9m.
How it is planning to boost growth going forward?
Over 2013 TM Lewin’s growth strategy is focused on investing in new product development; integrating its multichannel offer with work on the customer journey and the back-end of its operations; further store roll-out. However, recent refinancing of the company at the end of 2012 is expected to impact on its profitability as higher interest payments take their toll.