The Northwest is a region with a long history in retail – particularly in fashion, as Manchester was once the heart of the textiles trade.
In more recent times the region has emerged as the home of online retail with AO.com, Shop Direct, Boohoo and Missguided all based in the Northwest.
The small Cheshire town of Northwich is home to another of the region’s thriving digital businesses – The Hut Group.
The business is in growth mode, and that is plain to see as you walk through its head office, the walls are adorned with countless awards for fastest-growing business.
Last year, sales surged 50% year-on-year to £510m, and international now accounts for almost two thirds of sales.
The Hut Group owns many brands – The Hut, Coggles and Zavvi to name but a few – but it is in health and beauty, where it operates sites including Lookfantastic and MyProtein, that it has made a name for itself.
“We targeted to be the global number one in online health and beauty,” says The Hut Group chief executive Matthew Moulding. “In Health, we achieved that last year. In Beauty, we still have work to do, but we’re almost there. We’re targeting to overtake Sephora and become number one by this time next year.”
However, Moulding isn’t stopping there. The Hut Group has built a reputation as a highly acquisitive company – it spent £60m on purchases last year, including beauty brands Salu Beauty and Ideal Shape – and Moulding is set on strengthening its position in health and beauty through buying other businesses.
“It’s about technology and beauty for the foreseeable,” he says. “We’ve built the platform, the engine…we’re now plugging in more technology and adding more of our own brands.”
Own-brand already accounts for more than half of The Hut Group sales.
But why buy brands rather than create one’s own? “Impatience” says Moulding.
“It takes too long for them to reach any scale. Life is short. I’d get bored of waiting for the brand to grow to a decent scale. I’d much rather compress the scaling process, buy someone else’s and then scale it quickly through our platform,” he admits.
Moulding wants The Hut Group to be the “the LVMH of the digital world”.
LVMH, owner of brands such as Louis Vuitton, Moët et Chandon and Sephora, is clearly a business Moulding admires. “They control their own supply chain and sell their products through their own channels – stores predominately,” he says. “By working with other people’s brands as well as their own, they control their own destiny.”
However, The Hut Group isn’t all about retail. Like Amazon and Ocado, the business is as much a tech company as a retailer.
The business has built a tech platform that is the envy of many in the industry and many of the world’s largest brands now use its technology to power their websites.
Moulding says its tech prowess was born out of necessity.
“There are few platforms available and the vast majority of retailers are going through brokers and third parties. You are just one of thousand customers and can’t influence them to do things differently,” he says.
“We decided to build everything ourselves a long time ago, almost right at the beginning. What we can’t build fast enough, we try to make the quantum leaps by acquiring the technology. The only M&A we’ve done so far this year has been in tech” he says.
The acquisitive company snapped up web hosting firm UK2 and video content specialist Hangar Seven to bolster its tech offering earlier this year.
“There’s a chunky capital race on which players can deliver a first class global solution, delivering great site speeds in every territory, local content, local hosting, local payment solutions and so on,” says Moulding.
The Hut Group is definitely up there amongst the front runners. It has built a 360 solution, according to Moulding, and now powers businesses including HSBC, The Daily Mail, Honda and Nintendo.
With Amazon Web Services increasingly its growth engine, Moulding’s technology investment looks poised to pay dividends.
Speaking of dividends, The Hut Group – which has a roster of shareholders that reads like the who’s who of retail including ex Tesco chief executive Sir Terry Leahy and former M&S boss Lord Stuart Rose – has long been touted as an IPO candidate. Does Moulding plan to cash out anytime soon?
“It’s not in my mind” he says. “We are still very much putting the jigsaw together. Piece by piece we are building it, but there are a lot of things to do and never enough time.”
Rebuilding TJ Hughes
From Cheshire to Merseyside where retail supplier The Benross Group is rebuilding a famous retail name.
TJ Hughes is an institution in Liverpool. The discount department store – which was founded by Thomas J Hughes in 1912 - has been a part of Liverpool life for more than 100 years.
However, six years ago it looked like TJ Hughes’ was set for closure when it fell into administration.
But the department store was given a reprieve by the Benross Group – TJ Hughes’ largest supplier of electricals and seasonal products – which bought the brand name along with four of its 57 stores, which included its famous Liverpool flagship on London Road.
This means the retailer remains headquarted in its birthplace, Liverpool.
“TJ Hughes is a huge part of Liverpool history which is why it is important that we remain in the city,” says Benross Group managing director Anil Juneja.
He has wasted no time in rebuilding TJ’s into a national retailer, with stores spanning from Eastbourne on the south coast to Glasgow in Scotland.
He says: “Since buying the business in 2011 with six stores we have now grown our estate to 20 TJ Hughes Stores and 2 Lewis’ Home Stores with our most recent store opening in April this year.”
Juneja says Benross’ supply expertise has helped him turn around TJ Hughes.
“We have been able to strengthen our relationships with major brands as well as directly developing a great range of own brand products sourced from right across the world,” he says.
TJ Hughes has recently built its offering by adding grocery to its stores.
Juneja has big plans ahead. As well as expanding TJ Hughes’ store estate further, it has also recently launched online and plans to become “a true omnichannel retailer over the next few years.”
Booths – not just for the elite
Next stop on Retail Week’s Northwest trip is Preston, home to upmarket grocer Booths.
With its premium offer and focus on fresh foods and deli counters, Booths has long been known as the Waitrose of the North.
However, marketing director Julie Mills – who started her career as a buyer at Waitrose – is not happy with the comparison.
“There’s more freedom at Booths,” she says. “Our staff are encouraged to trade and provide a more colourful and interesting offer tailored to the local community.”
Provenance is at the core of Booths’ offer and the grocer is committed to using local produce. Mills cites Lancashire-based Shaun Mallison, who supplies Booths’ ‘Dug Today’ potatoes, which are brought into the store each morning and displayed in wheelbarrows covered in soil. This provides theatre and emphasises the freshness of its offer, Mills says.
“Our customers love it. It’s one of our best-selling lines,” she says.
Booths has a reputation as serving a well-heeled customer, but Mills maintains that it is a supermarket with far wider appeal.
“Booths has been tarred with the brush that it’s for old people, a place to shop when you retire. But it’s much more than that. It’s not for elite customers. If you love food, you come to Booths,” says Mills.
Despite this potentially wide pool of people, Booths is in no rush to expand on its 28 stores. “We’re not opening any new stores for a few years.
“We opened five in 18 months and it was a testing time for us,” she admits. “We haven’t got the luxury of a new store opening team. We have to do it as well as the day job.”
That’s not to say that Booths does not have its eye on expansion. Online could open an opportunity for the Preston-based retailer to gain national coverage.
Booths already sells its Christmas range online – “so northerners based down south can eat a Booths Christmas dinner” – and has launched hampers and gifts online.
“We’re a nationwide player for a short time over Christmas. I can see online being an opportunity for growth,” says Mills.
The grocer is not stopping there. Mills wants to take the Booths brand global by wholesaling its product.
Its business-to-business division, led by Henry Booth – great, great, great grandson of founder Edwin Henry Booth – is growing rapidly.
It already sells products in Fenwick department store and its chutneys, jams and puddings are stocked in 19 shops in Malaysia via a joint venture with Asian retail group Dairy Farm.
“There’s lots of opportunities to get our brand out in different regions. China is our next focus,” says Mills.
From Preston to Beijing – Booths northern fodder offers delicious growth potential.
A pit stop with a difference
Every roadtrip needs a pit stop and ours is no different. However, as Retail Week pulls into Tebay, just off the M6 at Cumbria, it’s clear this is no ordinary services station.
There are no Big Macs or Whoppers in sight. Visitors to Tebay can grab a homemade venison and chilli pie and a sourdough loaf from the in-house bakery.
Shoppers can also buy beef and lamb from the butcher counter, which sells produce from the farm that is run by the owners of the services, the Westmorland Family.
Tebay services was set up in 1972 by farmers John and Barbara Tebay services was set up in 1972 by farmers John and Barbara Dunning after they found out the M6 was due to cut through their farm.
Rather than lament the development, the Dunnings saw the motorway as bringing lots of potential customers to its farm produce.
Forty years on and the business, which is the UK’s only family-owned motorway services – the Dunnings’ daughter Sarah Dunning chairs parent company The Westmorland Family – is thriving.
It now includes a hotel, a gallery and an IMAX-style cinema screen. However, selling local produce – much of which comes from the family farm – is still at its core.
Westmorland Family chairperson Sarah Dunning says: “There’s not many players [in motorway services] and they are all taking a relatively similar approach. They bring in franchises like Burger King, M&S and WH Smiths.“There’s not many players [in motorway services] and they are all taking a relatively similar approach. They bring in franchises like Burger King, M&S and WH Smiths.
“We have a very, very different model. We see ourselves as a food business on a motorway. We’re trying to create an oasis for the traveller, a place that they really enjoy.”
And more drivers can enjoy it as Westmorland have opened a second services on the outskirts of Gloucester on the M5, which again focuses on selling quality, local produce.