As LK Bennett approaches its 35th anniversary, CEO Darren Topp explains how the event-driven womenswear model is sustaining its area of interest within the UK and world markets.
Within the newest interview by our common contributor Eric Musgrave, Darren Topp, who’s presently planning the schedule for LK Bennett’s 35th anniversary actions in 2025, reveals: “We’re not Gucci, however we do have worldwide attraction and that’s the place our development will come from.”.
In Wimbledon in 1990 Linda Kristin Bennett opened her first LK Bennett store promoting sensible footwear that shaped an accessible bridge between the designer types (and costs) present in Bond Road and mainstream supply of excessive road multiples.
Along with her mix of glamour and luxury, she turned often known as the Queen of the Kitten Heel, later including equipment and clothes to create a particular combine.
In 2007 Bennett offered 70% of the enterprise to personal fairness corporations Phoenix and Sirius, netting her £70m – £100m. A decade later she purchased the corporate again, however inside two years, in March 2019, LK Bennett entered administration.
Inside a matter of weeks the enterprise was acquired by Byland UK, owned by Rebecca Feng, the holder of the LK Bennett’s Chinese language franchise, and different buyers. Byland paid £9.8m for the enterprise however didn’t take 31 of the corporate’s then-49 UK shops. Byland has run LK Bennett globally since April 2019.
5 extra shops have been misplaced and different leases renegotiated in a CVA (Firm Voluntary Association) in November 2020 through the pandemic.
Darren Topp was persuaded to return to the agency by Feng. He had held the CEO position between 2016 and 2018, getting ready LK Bennett on the market by its non-public fairness homeowners and dealing alongside Linda Bennett after she purchased again her creation. He labored out the China franchise take care of Feng in 2016.
An affable and down-to-earth Lancastrian, Topp brings to the board room virtually 40 years of retail expertise. He joined Marks & Spencer straight from faculty as a administration trainee in 1986 and spent 22 years there earlier than placing in eight years in senior roles at Arcadia and BHS. He was CEO of BHS through the finish of the Philip Inexperienced period and the controversial sale to now-disgraced Dominic Chappell.
Topp admits he caught the style bug at 14 years of age, as a Saturday boy promoting denims from a stall in Salford Market. He stays as passionate as ever concerning the business.
What’s LK Bennett’s place within the UK womenswear market right now?
We’re an occasionwear or event-driven British model. Our key clients are 35 to 65, accounting for over two-thirds of our gross sales. We’re about Britishness and British design, which makes us attention-grabbing internationally.
A lot of descriptions may apply, like distinctive, horny, attention-grabbing, completely different and chic. We name what we do accessible luxurious as a result of mainly we’ve got the standard and design of luxurious merchandise however at considerably decrease costs. For instance, we typically supply our sneakers and boots from Italian factories utilized by numerous massive manufacturers.
We nonetheless comply with Linda Bennett’s unique idea to be between excessive road and designer manufacturers. However there’s generally a confusion. We’re not attempting to be a luxurious model. We’re a excessive road model, however we’re the highest finish of that market.
We’re suppliers of a particular deal with as a result of the underside line is, for many individuals, our merchandise are costly. There are a piece of consumers who can afford them however many save as much as purchase from us for an important day.
The result’s we’re a really London-centric model. The additional you go from London, typically, the more durable it’s for us to search out clients. So exterior London we’re present in predictable locations like Harrogate, Chester, Cheltenham…
LK Bennett AW24
Has the UK trend sector recovered from the pandemic?
No. I am undecided if we all know what “enterprise as typical” seems to be like anymore. I am undecided we’ll ever know. That is one of many challenges going through anybody working a trend enterprise within the UK. Let’s be sincere, LK Bennett 100% survived the pandemic primarily due to authorities assist. With out it, we might not be right here. We’re very grateful.
We received a giant bounce straight after Covid. There was the pent-up demand for events and weddings, so folks got here out and spent. It wasn’t the case for everybody, after all, however typically individuals who’d been working had not been spending, in order that they have been comparatively flush.
We had our greatest yr for a decade. Then, as robust as 2022 was, 2023 was as unhealthy. It simply fell off a cliff. We had been smart. We did not rent numerous additional folks as a result of we didn’t consider the expansion would proceed, however we did not anticipate the severity of the decline. The result’s we are going to publish a loss for 2023-24 after virtually £3m revenue the yr earlier than. That’s the rollercoaster we’re nonetheless using.
Since then, frankly, we have had every part in opposition to us. Brexit, Ukraine, the Center East, rioting in our streets, which put folks off going to the excessive road and deterred worldwide vacationers.
Of these, Brexit is giving us each prices and complications, primarily from paperwork. Many people have bonded warehouses for transporting and reorganising inventory, however it restricts the inventory that is accessible.
I’m not positive it will enhance. I can not see why the European Union would assist us with it. We performed our card. We will not have all the great bits solely.
After which there’s been inflation! I am 57 and I don’t keep in mind inflation like we’ve had lately. The overwhelming majority of customers have solely identified low rates of interest, low inflation and out of the blue all that gurgled up turn into an actual drawback.
Moreover, we have particular challenges within the UK round, for instance, the tip of tax-free procuring, which is an issue for us. I am not saying it is proper or incorrect, it is simply one other change. Then there are perennial challenges of the associated fee base. Once you’re a small firm like us, even tiny actions in these mounted prices make a major distinction to the underside line.
Take a look at the minimal wage. Would I wish to reside on £11.51 an hour? No, I wouldn’t. We pay greater than the minimal wage and we 100% wish to pay folks extra money, however each time the minimal wage is lifted by a pound, the one who’s on an extra two kilos an hour additionally needs extra. The cascade impact is sort of important. The truth is, on this very aggressive market, you simply cannot cross all that on. And I say that being in a sector the place I am promoting clothes for £345 to £500, not £10 T-shirts.
So will increase in wages, vacation pay, maternity pay, paternity pay, sick pay and so forth are tough. All are completely good issues to be doing, however all of them have a monetary impression on the enterprise. That is the problem.
What different exterior pressures concern you?
Enterprise charges are clearly important. If I take a look at any of our shops, my charges invoice is commonly greater than my staffing invoice by some margin. However let’s not maintain your breath for any important reform of the system. No matter complexion of presidency, they take a look at the various billions of income from retail enterprise charges and assume, that is a giant gap to fill. It ain’t gonna change. I simply do not see occurring.
In our London flagship at 95-96 New Bond Road, with 2,000sq ft of buying and selling house, our enterprise charges are over£300.000. That is six grand per week – earlier than the lease – simply to commerce. Once I left Marks and Spencer in 2008, you can broadly say enterprise charges have been someplace between 20% and 30% of the lease. Now it’s extra more likely to be 80% of the lease. Sometimes enterprise charges are larger than the lease. That is the irony.
It’s a kind of issues I can not do something about it.
LK Bennett Footwear
What are the variations between the LK Bennett Rebecca Feng purchased out of administration in 2019 and the enterprise now?
Earlier than the administration, it was a mistake to assume if we take £100m in 20 shops, then if we open 100 shops, we will take £500m. It does not work like that.
The additional I’m going from London, the more durable it’s for me to get our costs. Amongst my circle of relatives in Manchester, my mom, aunties and cousins, you recognize, I see their eyes glazing over once I inform them a pair of LK Bennett sneakers are £250. At our finish of the market, shopper demand is restricted. For those who assume you may replicate it, all you do is unfold a little bit of what you might have, however you add an enormous extra price base.
I did the Chinese language franchise settlement with Rebecca Feng in 2016 and he or she opened numerous shops there. When she approached me about her shopping for the enterprise, I mentioned, are you actually positive as a result of retail within the UK is just not a simple gig.
I instructed her the UK enterprise needed to be half the scale and that every part exterior London that was marginal needed to go.
Linda did a tremendous job beginning it practically 35 years in the past, however none of her opponents from these days have the identical status right now. Now we have numerous new opponents from the UK like ME+EM and The Fold, and there are all those from France like Sandro, Maje and ba&sh. For the patron, it’s nice to have such a range, however it’s not so good if you find yourself competing in opposition to them.
After all, issues have been aggressive approach again in 2000, however prior to now 25 years we’ve got seen the large rise of promoting on-line. Nobody had skilled something prefer it earlier than. The market has completely modified.
Additionally, because of value strain, the precise price of garments right now is way lower than it was. Within the Nineties, once I labored at M&S in The Pantheon close to Oxford Circus, an all-wool swimsuit was £199. And that is what it prices right now! Virtually 35 years later, it is the identical value though every part else has gone up.
In actual phrases, that in all probability needs to be a £600 swimsuit right now.
Worth strain is among the greatest challenges. We nonetheless predominantly make in Europe, utilizing primarily pure supplies, with every part designed in-house. We’re at costs that, in actual phrases, are what Marks and Spencer needs to be now. The entire dynamics of the style business have modified.
Within the first 20 years of my profession, in case your product was fairly good and you bought the shop open, you’d know, barring a catastrophe, you can generate profits and never only a bit cash. Marks and Spencer was making the thick finish of 15% web revenue. There aren’t many retailers right now that make 15% web revenue.
The entire on-line piece has utterly modified that dynamic as a result of, in some methods, it has been a race to the underside. Are you able to do it faster, quicker, cheaper? From a shopper’s view, there are an entire load of advantages round that, however there’s an entire load of downsides too. Faster, quicker, cheaper means invariably it’s important to compromise on manufacturing, high quality of supplies, the way it’s made, the place it is made, what it is constructed from.
For those who purchase a shirt for 3 quid, and also you say to your self, who’s getting shafted, I will let you know, it is everybody – the surroundings, the mill that made the material, the one who sewed it – everybody. I am not suggesting that anybody who buys low cost is a nasty individual. For those who purchase from the likes of Shein, that does not make you a nasty individual, however it modifications the dynamics of what everybody else is attempting to do.
The web, after all, might not be the panacea we thought it might need been 5 years in the past. The pure performs have struggled and luxurious manufacturers at the moment are doing their very own web sites, in order that’s made that market extra dynamic.
There have been different modifications. I lately learn a report from (administration consultancy) Bain and Co that mentioned by 2030 20% of the retail market shall be pre-loved – or second-hand, as we known as it once I was rising up!
Again then, should you had any cash, you’d by no means purchase second-hand garments. Now, sort in LK Bennett on eBay and you’re supplied about 6,000 merchandise. Who’d have thought somebody would put on another person’s sneakers? They clearly do.
LK Bennett Petite
You’re the particular occasion specialist but in your web site you flag up apparently area of interest sections like a petite vary, a aware vary, a restore service, a rental service… Are these simply distractions from, excuse the pun, the principle occasion?
That is the brand new world. As an organization you have to do that stuff. Even should you don’t hit all these targets right now, they’re coming, so you have to do it. A number of clients anticipate you to and so do your workers. Principally, it’s the correct factor to do.
On petite, it’s being promoted at current as a result of we’re simply in our second season with it, however we’re in our fourth season on bigger sizes for curvy girls. Beforehand fairly a piece of our vary would cease at 16. Now we provide every part as much as 20. It is the identical product – the identical design, the identical materials, simply lower for various girls.
On the sustainability piece, the fact is that making garments is just not carbon-neutral or environmentally-neutral. It is simply not. We’re all attempting to get our heads round it. So repairs and leases are a giant a part of it. I am amazed what number of clients like rental. It is fairly a good enterprise for me.
I do not see these as distractions. That is simply stuff to do with objective.
LK Bennett Curve
What are the targets for LK Bennett over the following few years?
British manufacturers can do very well internationally, so there’s a chance for us by way of franchises or partnerships. We’re not buying and selling in lots of territories, however we’ve got received extra standalone shops in China (greater than 20) than we’ve got within the UK (13). Principally, they’re shopping for our British design sensibility. Clearly they don’t seem to be shopping for for the title as a result of we aren’t Gucci.
An additional attraction for us is the royal connection. We’re very grateful the Princess of Wales wears not simply our model, however different British manufacturers. It issues. When she wears one among our clothes or coats, they’re gone. The worldwide markets need me to make it once more, which is one thing we might usually by no means do. She’s an actual icon for British retailers.
We design every part in-house and we’re significantly identified for our prints. British design nonetheless has a giant cachet around the globe. Rebecca Feng tells me Chinese language clients can recognise British and European types at 100 metres.
Additionally, we’ve got potential within the UK. We shall be again in Knightsbridge by late September. A few years in the past we had a retailer there and the lease was virtually £1m with charges of practically £0.5m. We have got a considerably higher deal now. Additionally in London I might wish to be in Marylebone Excessive Road however on the correct deal. All the pieces exterior of London is tougher, for positive.
Half our gross sales are on-line, both with our personal web site or via different websites. John Lewis is our greatest accomplice. Subsequent is actually good. We’re additionally on selfridges.com and we’ve got simply began on marksandspencer.com, which has out of the blue gone into manufacturers.
Worthwhile as these partnerships are, after all one of the best pound you may take is an additional pound in your personal retailer. It’s the simplest pound – that hasn’t modified. With on-line buying and selling, as anybody will let you know, the headline quantity seems to be incredible, however there are numerous prices related to it. I believe the web proposition goes to have to vary long-term.
On merchandise, I’ve resisted each temptation to enter new classes, like males’s and children. It is best to stay to what you recognize. In spring we’re an event-driven gown and shoe enterprise. Within the winter, we turn into a gown, coat and boot enterprise.
One of many issues that is price LK Bennett cash is the development away from carrying heels. At, say, the Chelsea Flower Present, numerous girls are carrying clothes, together with our clothes, however they’re in trainers, which we now do in a small approach.
However we aren’t identified for promoting trainers, so we are going to simply look ahead to heels to come back again, as they absolutely will, even when it takes 5, 10 or 20 years. That is what makes the style enterprise thrilling, is not it? It isn’t the identical stuff every single day. There are completely different alternatives, completely different points, completely different discussions.
How massive may LK Bennett be?
In our increase yr two years in the past, we made £4m EBITDA on £45m gross sales. So we’re a tiny enterprise, but when we may replicate that yearly, Rebecca and her shareholders would see that as consequence. I might be amazed if our enterprise may very well be rather a lot larger than £100 million around the globe, with the UK producing about half of that. If I may take £50 million right here and make £5m EBITDA yearly, I’d say thanks very a lot.
If we received to £100m making £10m EBITDA, nicely I’d want it was my enterprise!
The second we turn into too accessible, we lose our motive to exist. Purchase one among our silk clothes for a celebration and you’ll be fairly positive nobody else shall be carrying one as a result of I purchase 300 of them, not 300,000.
Darren Topp
Who’re the important thing staff round you?
Twenty years in the past I used to be bold and pushy. Now at 57 I’m the previous bloke within the boardroom, nonetheless carrying a swimsuit (however and not using a tie nowadays)!
I’ve received a tremendous administration staff right here. They’re primarily younger go-getters who’ve made an enormous distinction. In 2017 I introduced in Thomasine Jordan, who’s now our product and design director. She has a beautiful eye. Having a very robust design and product staff is essential on this complete course of and I am not good at that. It’s not what I do.
We even have Claudia Nappo who takes care of shops, on-line, HR – our COO – who has been right here six years.
Jack Wilkinson, who’s our worldwide wholesale and merchandise director, has been right here an identical time and has been promoted via the ranks right here. Musriq Anjum has labored right here three years and has been FD for six months and to finish the senior management staff we’ve got Mark Havas, who’s director for property, IT and authorized.
They’re all younger, eager, gifted, enthusiastic. If my experiences and battle scars can help them, nice.
How does a 35-year-old model appeal to younger clients?
If I used to be ranking us on a scale of 1 to 10 for total efficiency, I’d say we have been presently at 6+. There are numerous issues we’re good at however not adequate.
For instance, I am very aware the notion of the model will be that it is white, middle-class, skinny girls. In order that’s why on the web site we’ve got fashions of various ethnicities, completely different ages, completely different sizes from petite to curvy.
But in addition, after 35 years, we’re well-known, we’ve got a constructive status and we’re aspirational for a lot of. Just lately I noticed a younger lady in her early 20s attempting on some boots within the Bond Road store. I launched myself and requested what had introduced her in. She defined she was a lawyer, she had simply received a promotion at work and he or she had determined to deal with herself to a pair of LK Bennett boots.
That gave me a little bit of reassurance. She’s precisely the kind of individual we wish to store with us.
How will you have fun the 35th anniversary subsequent yr?
We’re engaged on that now. No matter we do, it will likely be timed to swimsuit the enterprise. I spent my earlier profession with Christmas as the height buying and selling interval, however that’s not us. Our peak is March, April and Could, when Ascot, Henley, weddings occur. These three months are completely essential to me.
LK Bennett Bond Road
LK Bennett at a look
2017, when Linda Bennett purchased again the corporate: 49 shops and 64 concessions within the UK, a part of 260 shops and concessions in 30 international locations.
Right this moment: over 30 shops and concessions within the UK, plus over 20 shops, concessions and franchises in 10 international locations. There are 20 LK Bennett shops in China, operated by proprietor Rebecca Feng.
Worldwide companions with on-line and bodily shops embody Brown Thomas, De Bijenkorf , El Corte Inglés , Galeries Lafayette, Nordstrom and United Retail (Qatar).
Employees: 300 (UK), 25 (RoI)
50:50 gross sales break up between outlets and on-line
Gross sales break up: Clothes 50% (of which clothes 60%, separates 35, coats 5%), footwear 42% (of which court docket sneakers 70, boots 25%, trainers 5%), equipment 8%.
Financials:
2016-2017: £5.9m loss on gross sales of £42m
2019-20: £3m loss
2020-21: £0.5m loss
2021-22: £1m web revenue
2022-23: Turnover £49m (+30%); Gross revenue £30m+ (+40%); Working revenue £2.9m.
2023-24: Will present a loss
70% of gross sales are from UK and Eire; 10% Europe, 10% China (wholesale, not retail), 5% US, 5% RoW
