Quirky cookware brand Lakeland is investing £10m in extending its distribution centre as it prepares for overseas expansion in Europe and the Middle East.
The distribution centre, based in Kendal in Cumbria, will be extended by a third to 200,000 sq ft and will service Lakeland’s expansion, which will also include growing its UK store portfolio by more than 50% to 100 stores within three to five years.
Lakeland marketing director Tony Preedy said: “The warehouse will provide us with very substantial capacity for growth. For the next year or so we’ll focus on the Middle East and Europe but we have ambitions to expand further afield.”
Lakeland will make its European debut in Germany this summer, where it will initially launch online, with the potential to open stores. Preedy added that further expansion in Europe will follow.
Preedy said Lakeland was attracted to Germany because of its “mature home shopping market”.
He added: “The German consumer responds well to quality and service. The first year will be about online and catalogue marketing. But multichannel is the successful business model of the future, so it’s only a matter of time before we open stores.
“There will be further expansion in Europe after Germany. Lakeland will grow very substantially over the next three to five years.”
Preedy said Lakeland had not decided which European countries to launch in, but added that Scandinavia “represents a good opportunity”.
Lakeland will also open its first stores in Saudi Arabia later this year. All of Lakeland’s overseas stores are located in the Middle East at present. It has seven stores in Dubai, Oman, Qatar, Abu Dhabi and Bahrain.
“Saudi Arabia is a logical adjacent country to expand into. We see the potential to open at least half a dozen stores there,” said Preedy. “The stores in the Middle East have surprised us in terms of performance.”
In the UK Preedy said the 60-store retailer will look for stores on high streets and in shopping centres. “We’re quite picky with a long wish list,” he said. Preedy said Lakeland will focus on areas where it is under represented, such as London and the Southeast, as well as Bristol, Birmingham and Manchester.
“We’re under-represented as a national brand,” said Preedy.
Preedy said Lakeland enjoyed a “pretty strong” Christmas, with sales up 12% in December.
While Lakeland notched up a record sales year in 2012, Preedy described conditions as “tough”.
He added: “We hope the momentum will continue into 2013. We will open six stores in 2013, which will provide us with some growth.
“We have a very good customer proposition as far as product and service are concerned.
“People are buying ingredients rather than ready meals from the supermarkets because it’s cheaper,” said Preedy. “People are spending more time at home and buying products at Lakeland.
“I don’t think that trend is going to go away.”
Preedy added that the baking trend had boosted Lakeland’s sales, and that the Cake Pop Maker was a best-seller over the festive period.