Bonmarché revealed some poor figures in its half-year update, as profits more than halved and like-for-like sales plummeted.
The mature fashion retailer has now issued two profit warnings in the space of a year.
New boss Helen Connolly, who arrived from Asda in August, has her work cut out. Here are the four key problems she needs to address:
Connolly told Retail Week today that her number one priority was “being clear about who our customer is and giving her the right product”.
In an age where what the customer wants is changing faster than ever, this is easier said than done.
The retailer revealed today that it had simplified its customer profile. Whereas it previously focused on four model customer personas (Susan, Linda, Margaret and Joan), it now has just one: Lisa.
This younger-sounding moniker reflects its desire to appeal to a customer who may be the same age as Bonmarché’s core customer always has been, but who feels younger than her mother did at that age.
In the retailer’s own words: “Bonmarché’s target market remains unchanged: women aged 50 plus. Lisa represents the ‘sweet spot’ of our aim”.
Hand-in-hand with appealing to its core customer is outshining the competition.
As Verdict retail analyst Kate Ormrod says: “Bonmarché has an opportunity to become the go-to destination for 50+ females, especially given that BHS is no longer trading.
“However it must act quickly as competition will grow as more players target this lucrative segment, with the likes of JD Williams and Matalan holding potential.”
While Matalan has struggled lately, being placed in Lloyds Banking Group’s special measures unit earlier this year and reporting sliding sales in its last update, sales at JD Williams, one of the power brands within N Brown, have soared.
While Bonmarché suffers from the same problems as the rest of the fashion market – unpredictable weather and a shift in consumer spending being just two – it has two key advantages.
The first is its specialist focus and the second is its value stance. It is not part of the middle market, being a value player, and so does not have to struggle to differentiate itself.
However, as Ormrod says, “Bonmarché has its work cut out to sufficiently modernise the brand and increase its relevance among shoppers”.
Key to increasing that relevance is product.
Bonmarché’s frumpy image is due to its product offering. Much of Bonmarché’s current product would appeal to Lisa’s mum, not Lisa herself. While the retailer will still need to run those product lines for a time, it is looking to limit them.
“We will continue to offer more traditional lines but their proportion of the range will reduce progressively, as we become comfortable that our existing customers are buying into the ‘sweet spot’ product which will ultimately comprise more modern lines with broad appeal to our target market,” it said today.
In line with that modernisation, Bonmarché hired former Monsoon brand director Geraldine Higgins as product director earlier this year.
The current collection is the first that bears her influence and Bonmarché said today that it was “encouraged” by customers’ reactions.
But it takes more than a few seasons to change brand perception, and Bonmarché will need to be in it for the long haul.
Bonmarché currently sources around 70% of its stock from China, with lead times running to around 26 weeks.
Connolly wants to lessen that dependence and source more from countries including India, Turkey and Morocco, although she is reluctant to put a figure on those aims.
“We need diversity of supply base to satisfy our customer’s needs,” she says. “Introducing other countries will give us the benefit of speed.”
Connolly is also keen to progress towards “open-to-buy”, holding back some budget in each season to react to the problems plaguing all fashion retailers at the moment, such as the unpredictable weather and a slowdown in consumer spending, which translates to only strictly necessary or supremely desirable clothing being deemed worth buying by the consumer.
Connolly spoke this morning of returning Bonmarché to growth in its next financial year. She will need to act on the above points fast to achieve that aim.