Apricot

A Message from Lord Pickles and Lord Blunkett, followed by Apricot's best practice article

The ability to listen and learn from one another has always been vital in parliament, in business and in most aspects of daily life. But at this particular moment in time, as national and global events continue to reiterate, it is uncommonly crucial that we forge new channels of communication and reinforce existing ones. The following article from Apricot is an attempt to do just that. We would welcome your thoughts on this or any other Parliamentary Review article.

Blunkett signature Rt Hon The Lord David Blunkett, MP
Pickles signature Rt Hon The Lord Eric Pickles, MP

www.apricotonline.co.uk

1APRICOT |
BEST PRACTICE REPRESENTATIVE
Managing Director
PhilipChaimo
Tropical print from Apricot’s
summer collection
When the idea first came to be, 11 years ago, Philip
Chaimoenvisaged Apricot as an in-house brand for
pop-up discount designer label shops. For a short
while, he and his team continued along this route, selling basic
products with their own label.After realising the need for a
more distinctive look, however, Apricot began creating and
buying their own original prints – and that was where their
success truly began. Philip tells
The Parliamentary Review
more
about the Apricot journey.
Original prints allow huge scope for reinvention. We want our clothes to have a
timeless intrinsic value, appealing to both “mums and daughters”.
Getting started – Bath and Debenhams
In 2008, among our ten pop-up shops, Bath was trading successfully enough for us
to take the opportunity of converting a short-term lease to a long one. We did not
have the capital to create a well-known brand through our own standalone shops.
Therefore, we decided to explore a new route through concessions. In the same
week that our new shopfit of the Bath store gained publicity in
The Drapers Record
,
we approached Debenhams. To our good fortune, the contact had read the article
in
Drapers
and agreed to a meeting.
FACTS ABOUT
APRICOT
»Managing Director:
PhilipChaimo
»Founded in 2007
»Based in London
»Services: Fashion retail
»No. of employees: 342
»The very first Apricot labelled
item was an unsuccessful
combat trouser
Apricot
THE PARLIAMENTARY REVIEW
Highlighting best practice
2| APRICOT
This set us off in a whole new direction
– it wasthe main driver for our early
expansion. We needed to optimise
the small concession spaces we were
given, and thus opted for a “bestseller
model”. Being able to trial styles in
our own stores and cherry-pick the
bestsellers for the small concession
spacesproduced very positive sales
densities – something Debenhams
and subsequent concession hosts
understandably viewed favourably.
Building on our success in Debenhams,
we entered into agreements with
House of Fraser, New Look, Outfit,
Beales and other independent
department stores. Soon, we had over
300 concessions in the UK alone.
Past growth through export –
Germany a target market
With the assistance of a government-
backed trade initiative, the Overseas
Market Introduction Service, we
then entered the German and Italian
markets. A contact at one of the
German host retailers proposed leaving
his employer to form an agency selling
the Apricot brand across Germany and
Austria. It proved to be a successful
alliance – our turnover currently
exceeds 25 million euros in the two
countries.
Increased brand recognition and a
refined product offering meant we
could trade well enough to pay rent
on longer-term leases, resulting in a
portfolio of around 12 permanent
standalone stores.Triallingshapes,
prints and new styles in our own
storesand then rolling out the
bestsellers in other outlets remains a
crucial tactic.
Continuing to look at new
markets
Entering new international markets
continues to be a significant goal.
We have had an encouraging start
in North America, with a mixture
of independent retailers, trial
concessions in Macy’s stores and
our first standalone store in Natick
Mall,Massachusetts. We feel this
combination of retail, wholesale and
concession spaces is a prudent route
for market entry in the US. There are
huge opportunities for further online
expansion throughout the world.
Our increased turnoverhasgiven us
more buying power, enabling us to
bring morein-house andintroducea
flatter buyingstructure – such as
buyingand producing our own fabrics
with production managers.
We have partnered with certain
factories for years and are now
comfortable with their efficiency and
employment standards. We only use
audited factories with rigorous ethical
standards, which are also the most
reliable.
It is a challenging time for the retail
clothing industry. Uncertainties
over Brexit have been a cloud over
our European operations, and the
migration from bricks-and-mortar retail
to online is thought by some to be an
existential threat.
A shifting customer base
The mean age of our customer
base is around 37. Our entire base
Apricot Basingstoke
We want our
clothes to
have a
timeless value
to them
3APRICOT |
BEST PRACTICE REPRESENTATIVE
ranges from 20 to 65 with the most
popular bands being 20 to 35 and
35 to 55. We are closely watching
how thebuying habits of ecommerce
customers develop versus traditional
bricks-and-mortar retail.
The 30 to 35-year-olds have grown
up with the internet and are unlikely
to shift. The 40 to 60-year-olds are
converting to online retail,possibly
at a slow rate, as they become more
IT-savvy.
The interesting and perhaps worrying
question is: will the online generation
of 18 to 30-year-olds remain in the
online bracket as they age, or will
some shift into bricks-and-mortar as
they enter different age brackets?
If things had reversed and everyone
had grown up with only ecommerce
before physical shops appeared, would
the extent of change not be similar?
There could be people revelling in the
wonder of touch, the feel of product
and the experiential element of
shopping. Could this happen for new
generations?
A challenging market indeed
It is apparent the commercial viability
of physical retail in the UKisunder
threat. Rents that seemed to be
good value 12 months ago appear
considerably more expensive now.
The move to ecommerce is making
investing in shops a precarious business
– while some landlords have become
more realistic with asking rents, one
area doesn’t seem to be budging:
business rates.
New shops require significant
investment in shopfitting. Today’s
consumer wants to shop in a pleasant
contemporary environment. Even if
landlords offer seemingly attractive
rent packages, business rates can
preclude a lease being signed.
A prime reason is that a landlord
wouldusuallyoffer an incentive of
12 months’ rent towards a shopfit.
Insome cases, this would have paid
for around 80 per cent of the initial
setup costs. This, however, is no longer
possible; business rates are often
nearly as high and come with no initial
grace period.
We believe the current level of business
rates is not sustainable, but there is
little incentive for the government
to reduce them. Landlords are liable
for the rates when shops are vacant.
We recognise it is a vital source of
revenue for the government and that
any rates cut would need to be offset.
One suggestion: replacing the planned
corporation tax cuts with a business
rate cut. Small and medium businesses
rarely cite corporation tax rates as
an impediment to future success.
The same cannot be said of business
rates. The introduction of a sales tax
for online-only retailers, payable at
checkout, would further redress the
balance.
These measures would help keep
traditional retailers open, potentially
boost government revenues, and inject
new life into the high street.
Entering new
international
markets
continues to
be a
significant
goal
Apricot spring/summer
2020 campaign

www.apricotonline.co.uk

The Parliamentary Review Publication, in which this article originally appeared, contained the following foreword from Rt Hon Michael Gove.

Rt Hon Michael Gove's Foreword For The Parliamentary Review

By Rt Hon Michael Gove

This year's Parliamentary Review comes at a momentous time for parliament, as we collectively determine the destiny of the United Kingdom. 

On October 31, the UK will leave the European Union. The successful implementation of this process is this government's number-one priority.

Three years after a historic referendum vote, we will deliver on the decisive mandate from the British people. Trust in our democracy depends on it. Until that final hour, we will work determinedly and diligently to negotiate a deal, one that abolishes the backstop and upholds the warm and close relationship we share with our friends, allies and neighbours in the EU. But in the event that the EU refuses to meet us at the table, we must be prepared to leave without a deal.

As the Chancellor of the Duchy of Lancaster, it is my job to lead on this government's approach, should that scenario happen. Preparing for Brexit is my department's driving mission. But while I am leading this turbocharged effort, the whole of government is committed to this endeavour.

Ministers across Whitehall are working together to ensure that every possibility is considered, every plan is scrutinised and every provision is made. A daily drumbeat of meetings means that we are holding departments accountable, so that preparations are completed on time.

The chancellor has confirmed that all necessary funding will be made available. And we have mobilised thecivil service, assigning 15,000 of our most talented civil servants to manage our exit from the EU.

We will make sure that on November 1, there is as little disruption to national life as possible. Our trade relationships will continue to thrive, thanks to agreements with countries around the world worth £70 billion. Our country will remain secure, thanks to nearly 1,000 new officers posted at our borders. And the 3.2 million EU nationals now living and working among us can remain confident, with absolute certainty, of their right to remain in the UK.

Above all, our goal is to be transparent. Soon, we will launch a public information campaign so that citizens, communities and businesses are ready and reassured about what will happen in the event of “no deal”.

In my first few weeks in this role, I have travelled to ports and tarmacs, borders and bridges, all across the UK –from the seaside of Dover to the rolling green hills of County Armagh. I have heard from business owners and border officials, farmers and hauliers. They are ready to put an end to uncertainty. And they are ready to embrace the opportunities ahead.

Our departure from the EU will be a once in a lifetime chance to chart a new course for the United Kingdom. Preparing for that new course will be a herculean effort. But this country has made astounding efforts before. We can do it again.
Rt Hon Michael Gove
Chancellor of the Duchy of Lancaster