Ellie Sanderson has thought long and hard about the different way of working that is essential to the growth of our industry
Coming out of lockdown has been an interesting and somewhat stressful time for many of us. Not least because a number of us missed out on the lockdown ‘holiday’ that many non-business owners enjoyed.
It’s been a stressful time because we have each managed hundreds of postponed weddings and all the unpicking that go with it. It’s really taken a lot of stamina and drive to plough through most days and weekends. It’s also taken a huge amount of wine!
And talking of wine, I want to raise a glass to those suppliers who carried on during the pandemic to make dresses for our brides – I salute you.
In fact, I salute any small business that has come out the other side of this insane time intact. Many shops didn’t, my town of Beaconsfield has casualties as does Woodstock – at least ten percent didn’t make it. So well done to all of us who did.
Facts and figures
I re-opened on 15 June and so far so good – we have sold dresses. I do however remain in the ‘cautious camp’ about trading. I think it’s unlikely that we will return to a recognisable “business as usual’ any time soon. Sorry to chuck a bucket of cold water over things but we are facing many challenges, some of which haven’t even happened yet.
To start with, there is a significant downturn in consumer demand; this sits alongside people about to come off furlough only to face redundancy. Despite unprecedented government support, financial wellbeing has deteriorated drastically. Consumer confidence is dropping sharply to levels not seen since the 2008 financial crisis. According to 55% of respondents in a recent survey* they expect the general economic situation to get a lot worse in the next 12 months.
Then on top of that are the ridiculous Coronavirus guidelines about marriage ceremonies, which have frankly paralysed our industry. From venues to photographers and florists to bridal retail, these ridiculous ‘guidelines’ have been the kiss of death, not life. The day after that fateful announcement we saw a huge uplift on postponements for the rest of the year. Our brides have spoken and they don’t want to have small weddings.
We also have potential local lockdowns on the horizon and it looks likely that true recovery won’t really get going until spring 2021. I remain hopeful that next year will be incredible if we can all handle the volume.
This year, though, is going to be tough. Many of the retailers I talk to about turnover predict that 2020 figures will be between 40%-50% lower than we had hoped for. Let’s pray these rules are lifted soon and the virus R rate remains under one percent so we can get back to business.
Making one’s business Covid-secure means that retailers who rely on a large volume of clients will start to feel the pain first. Bridal shops that have six fitting rooms are probably down to three or four. Even if they manage to convert the same number of brides this will mean that 30% less can be seen. With that in mind, now is the time to re-think your short-term business model. If your capacity is down by 30% your sales will match it. Increasing your Average Transaction Value is always on my radar, but sadly the past few weeks has shown a number of us that increasing the average spend at this juncture will not fill the gap.
So what strategic planning should we be looking at:
➢New bottom line turnover
This is the one to chase as we all know; busy selling with a poor bottom line is frankly pointless. Set your target for this then review the following areas.
➢ New sales targets
Set a new sales target for 2020. Use the knowledge you have gained in the past few weeks and use it to predict your trading. Plan for the worst and hope for the best. Once you have a clear target in place you can take a hard look at your cost base.
Remember to review this monthly at this time. And bear in mind your reduced appointment capacity; you cannot take the same money if you see 30% less people. I am open seven days a week and cannot get near my old appointment capacity. This is a key factor – don’t ignore it.
➢New staff costs
What was your staff cost ratio before lock down in % to sales terms? Do you need to cut this now that sales are lower? Don’t forget furlough ends soon so you need to be planning if you can afford to get your all your girls back. If your sales predictions are now lower than your original for 2020 (and I expect 90% of retailers will have lower targets) then you will need to seriously consider this cut.
However, if your business is in a growth spurt you may be safe. This will be new businesses that are still developing. Fortunately I sit in this bracket with my new shop in Woodstock as we were about to recruit pre lockdown; I won’t make those cuts now and at least it means everyone’s hours are safe.
➢ New stock investment
This is a tough one as we all want new stock, but stock remains one of our biggest costs. Investing too much now will mean your new stock could be hanging on the rail to go out of date. Not buying now will mean you cannot satisfy demand when it happens. It’s a juggling game and your figures and instinct will guide you.
Consider these points before spending:
• We only had our new 2020 collections on the rails for 16 weeks until lockdown – they are still new and still coveted.
• We have sold nothing for 12 weeks during lockdown – this makes evaluating your return on last year’s investment impossible. Use your history and use your instinct.
• We are unsure what the economy will do but we know we are heading towards a global recession.
• Treat with caution suppliers who tell you that: “everyone is selling and everyone is busy – its YOU”. It is not you… they just need to sell too.
• Develop a relationship with your suppliers and work with those who work with you.
At this point I have to mention the insane pressure many bridal shops have been under during lockdown.
There has been pressure to manage their brides, pressure to juggle the money, pressure to take deliveries into their homes so suppliers can send out invoices, pressure to buy new collections with no re-opening date. Some suppliers have shown their true colours and some of what we have all seen has been blooming ugly.
I have to say that Jesus Peiro has been a shining light in this disastrous mess. Marion tentatively asked if we wanted to take a look at the new dresses; she has put no pressure on any of us, she has been there throughout with a nod and a hello-how-are-you. Marion has singlehandedly given JP stockists positive hope and news from Spain who re-opened first. She has helped us with the new collection choices and not forced us in any way. This partnership and considered, professional approach has encouraged us to buy safely and with plans to pay discussed on an individual basis upfront.
Shame on you suppliers who have bullied poor novice or scared retailers to buy at this time. Shame on you suppliers who haven’t partnered or communicated with their retailers
but instead gone silent. It really has been ugly.
However onwards we will move. I know it’s easy to feel safe and comfortable now we are open and I think it’s good to feel positive and upbeat as brides are spending. But there is a gap that will not be filled in 2020: the big question is will it be filled in 2021 to make up for this commercial loss or do we need to just wipe it off the slate and move forward?
Whatever happens, I know 2021 is going to be one hell of year and our production plans have already started. Holiday schedules are in place and we are trying to enjoy a year off fittings and late nights. We are all going to need to get our trainers on for next year.
Bring it on, I say. I love a big challenge.
* source – Resolution Foundation: The Economic Effects of Coronavirus in the UK