This week we welcome Kevin Tulip, Primark's US President, as our guest to discuss what makes the Ireland-based purveyor of affordable fashion, home, and beauty products so remarkable and why they've chosen a slow and steady approach to global expansion.
This week we welcome Kevin Tulip, Primark's US President, as our guest to discuss what makes the Ireland-based purveyor of affordable fashion, home, and beauty products so remarkable and why they've chosen a slow and steady approach to global expansion.
We also learn about the brand's Dublin origins, how the concept has evolved, and their decision to grow to 60 locations in the US by 2026 and 530 stores worldwide. We also learn why they've historically and rather controversially avoided a big push into e-commerce and how they view the critical role of physical stores in growth strategy.
But first we dissect the week in retail news with a return to the Wobbly Unicorn Corner (and Steve's warnings of a retail disruptor apocalypse) by reviewing poor earnings news from Allbirds, Stitch Fix, and ThredUp. In far happier news, Dick's Sporting Goods and Ulta show us the money, adding to their string of strong results. In our quick hits section we review an unusual view into JC Penney's (poor) earnings, Gap's disappointing holiday season and leadership revolving door, and question whether Amazon Go might be going, going, gone. We wrap up wondering whether Bunning's (the Australia-based home improvement retailer) move into the pet category suggests a novel evolution of the format.
******
Past episodes mentioned:
Dot Com Bomb: The Sequel? with Special Guest Daniel McCarthy
About Kevin
Kevin Tulip is the US President of Primark, leading US operations. He previously led Primark’s Benelux business and joined the US team in October 2021. He has been with Primark since the beginning of his career when he started working at a retail store in 2002.
About Us
Steve Dennis is an advisor, keynote speaker and author on strategic growth and business innovation. You can learn more about Steve on his website. The expanded and revised edition of his bestselling book Remarkable Retail: How To Win & Keep Customers in the Age of Disruption is now available at Amazon or just about anywhere else books are sold. Steve regularly shares his insights in his role as a Forbes senior contributor and on Twitter and LinkedIn. You can also check out his speaker "sizzle" reel here.
Michael LeBlanc is the Founder & President of M.E. LeBlanc & Company Inc and a Senior Advisor to Retail Council of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience, and has been on the front lines of retail industry change for his entire career. Michael is the producer and host of a network of leading podcasts including Canada’s top retail industry podcast, The Voice of Retail, plus Global eCommerce Leaders podcast, and The Food Professor with Dr. Sylvain Charlebois. You can learn more about Michael here or on LinkedIn.
Be sure and check out Michael's latest venture for fun and influencer riches - Last Request Barbecue, his YouTube BBQ cooking channel!
Michael LeBlanc 00:05
Welcome to Remarkable Retail podcast Season 6, Episode 9. Presented by MarketDial. I'm Michael LeBlanc.
Steve Dennis 00:11
And I'm Steve Dennis.
Michael LeBlanc 00:14
A very busy wrap to the earning seasons report this week. And speaking of busy, we're busy lining up guests for both Shoptalk in Vegas coming up soon, and the World Retail Congress in Barcelona, So, tons of super interesting content on the way for the people. Now, speaking of the World Retail Congress, a shout out to the listeners don't sleep on the very excellent bonus episode with Suzanne Long, Chief Sustainability and Transformation Officer at Albertsons, a $70 billion grocery powerhouse and house of about, I don't know 30 regional brands, such an impressive executive.
Steve Dennis 00:36
Yeah, I'm really looking forward to her, her talk in Barcelona. I felt like we just kind of touched the tip of the iceberg, with, with our interview, lots of great content in it, but much, much more we could have gotten into so hopefully people will make it to Barcelona and hear all she has to share but, in the meantime, good bite size snack size kind of episode as a bonus this week.
Michael LeBlanc 01:08
Speaking of impressive retail executives, our special guest on this episode is Kevin Tulip, Ireland based Primark, US President coming to us live from Boston.
Steve Dennis 01:17
My first experience with Primark was actually in London when my older daughter Elena was a student over there during her junior year of college. And I wandered into the Primark store, and it was easy to find it in the mall because it had about, about, 80% of the traffic to the entire Westfield Mall was quite extraordinary. And you'll hear me on the.in the interview, make a mistake, because I I think of Primark as being a UK retailer because they have such a big presence there. But as you learn they actually are and as you mentioned, they're Ireland base, but really Remarkable Retailer are now expanding well beyond the Ireland and UK area to Europe, the US and who knows, maybe even Canada Michael, one of these days.
Michael LeBlanc 02:00
Well, there is a large Irish community here to start with, who would welcome them. And of course, we just lost actually coincidently an anchor tenant for a bunch of malls. So, there's space, which is sometimes hard to come by. So, the timing has never been better. All right, maybe we'll start that. We'll start that rumor. All right, well, let's get into the news. That's right. It's the Wobbly Unicorn sound, which signals some earnings results from some Wobbly Unicorns, some high-flying unicorns are formally, former-, am I mixing metaphor there, high flying unicorn? Let's talk about Allbirds.
Steve Dennis 02:40
Well, on the heels of last week's episode, where we were talking about whether there might be a retail disrupter apocalypse, unfortunately, we got more evidence that that might be true. So, first up was Allbirds. Allbirds, has kind of a weird place in my heart, because I got into a Twitter fight with a bunch of people, which, of course, is always a good thing to do nothing like a good social media fight. (Crossover talk).
Michael LeBlanc 02:49
Right, a good spend of your time.
Steve Dennis 02:52
Yeah, exactly. So, one of these days, I'll learn something. But when Allbirds went public in November of 21, they had I want to say about a four and a half billion-dollar valuation. And I just thought that was completely insane. And it turns out every once in a while, I am right, because this thing has gone into the, it's been a bit of a dumpster fire, (inaudible) we’re really mixing metaphors here today. (Crossover talk).
Michael LeBlanc 02:59
Yeah, yeah.
Steve Dennis 03:00
But anyway, they came out with their quarterly and full year reports. And for the fiscal year, sales are actually up 7%. So, that's pretty anemic for an allegedly fast-growing company. But down 13% in the fourth quarter, and in particular, that seemed to do with a big miss, they had, with a line of more high-performance running gear, as opposed to their core product offering, which led to a big hit and gross margin. But the overall thing that was quite scary and has sent their stock down even further, it's down close to 90% since their IPO. They had a net loss of over $100 million compared to 45 million last year. So, things are not going in the right direction.
They've announced that they are going to be doing a big rethink that this year will be a year of kind of a transition. And that, at least the elements that have been, were shared publicly gets back to slowing store openings.
And this actually gets back to last week's episode as well, when we were talking about well, you know, it's not so clear that some of these, that some of these brands that are pushing on physical stores are actually going to see that be significantly accretive to earnings and Allbirds which is about 42 stores, I think, seems to be saying that that is true. They're also maybe looking for a partner internationally. And then the other thing I thought was particularly interesting is they hired a chief transformation officer, and I know that's become sort of a buzzy title. But how is it that a new disruptive brand that is allegedly transforming retail needs to hire a chief transformation officer? I would think that's kind of, (crossover talk).
Michael LeBlanc 05:06
It’s like a Mobius (inaudible) transformation.
Steve Dennis 05:09
Yeah, very strange. But anyway, yeah, things aren't so good there, they signal things are going to be tough going forward, they've got a decent balance sheet. So, I don't think there's any, you know, sort of any imminent financial risk here now. Moving on to a couple others quickly, Stitch Fix, which is a brand we've talked about multiple times. They also shared their earnings and this, they continue to really struggle, they had a decrease of sales of 20%, year-over-year, a decrease in active clients of 11%. And their net wide, their net loss, which they've been running a net loss for a while now widened considerably. Another company that has lost nearly 95% of their peak valuation. So, this is a brand that continues to struggle,
Michael LeBlanc 05:55
A quick comment on that. I know you're gonna say the CFOs have kind of left the room. But is that a factor of the change of structure workplace wise, like less women? I mean, primarily their customers are women who are looking to say, Listen, I go to the office five days a week, I need a lot of different outfits. And this is a great service because it gets outfits to my door, and, and I can wear something different to work pretty often. And now is this, is this a symptom of that? Or what do you think about that?
Steve Dennis 06:21
I think it's a contributing factor, but probably not the primary one. I mean, it certainly doesn't help them. But I think Stitch Fix is emblematic of everything we talked about in last week's episode. So, I'll let people go back and listen to that if they haven't. But it's really that the underlying customer dynamics of the portfolio and the size of the opportunity here is smaller than the way they've built this model. So, whether they can get it back on track, I guess we'll see. But yeah, not a good trajectory there.
Steve Dennis 06:41
And then lastly, on the Wobbly Unicorn section of the program, ThredUP, which is a resale platform, their revenue fell, not a lot, but about 2%. And similarly, they had some weakness in their active buyers, and the number of orders, their net loss widened as well, they also see a similar pattern here with some of these guys. And, you know, probably a big reason I go to this disrupter apocalypse kind of narrative. Their stocks are also down, about 90%. What's particularly interesting about ThredUP is that they are in the hot resale category, you know, people have been talking about for two or three years, all this, re-, you know, re-, what he calls it circular economy and all this kind of stuff. So, to the extent that's true, you would, you would assume they're riding this wave and not so much in there. in their results. And it's actually a pretty, pretty small business only, you know, I think they're, you know, maybe doing just under 300 million a year. So, anyway.
Michael LeBlanc 07:53
I think it's a hard but not impossible business to make money at the resale. But let's talk about somebody, a name I haven't heard in a long time: Blue Apron, which I thought actually was gone. Actually already, (crossover talk). They don't operate here. But I thought they're already out of this. But they're still around, I guess.
Steve Dennis 08:09
They are, well, maybe not for much longer. And we are just a warning or a heads up to our listeners, we are going to move to better news in about 45 seconds. But the other thing, just kind of following on with this theme of the disrupter apocalypse, hashtag disruptor apocalypse is that S&P Global Market Intelligence put out a list of these newer DTC brands that have significant or a growing bankruptcy risk. And there were 11 of them. I’m not going to mention all of them, but ThredUP was on that list. Wayfair, which we talked about last week, is on that list. FARFETCH® and Blue Apron. Also on that list, and the one that was highlighted on the shortlist of most risky was The RealReal, which I know we've talked about a few times they've got a new CEO. So again, not a lot of positive news coming out of this sector.
Michael LeBlanc 09:02
That's, that's the graveyard sound there for you, (inaudible) too dark about it. But alright, let's, let's leave that alone for now, let’s, let's move on. Dick's Sporting Goods has fantastic numbers, talk about them?
Steve Dennis 09:12
Yeah, we've got actually two retailers that I highlight in my book that continue to really do well. So, Dick's Sporting Goods' record setting year, continues to really grow sales. It gets a little bit weird because of some of the comparisons but if you look back to where their sales are, versus 2019. So, pre-COVID, they're up 41%. Now, some of that is new stores, but a lot of that is comp, they had a full year profit margin of 11%, which is twice as good as it was back in the pre-COVID days. They gave a little bit of a I wouldn't say dire outlook but muted outlook. Now you know they are sporting goods as a category that really benefited from kind of the COVID bump so it's not too surprising that they don't see things quite as robust going forward.
Steve Dennis 09:39
But I think the other big piece of news is they are working on diversifying their store portfolio. So, they were piloting a Field & Stream store concept, they opened 17 of these hunting focused stores, they decided that that's not working well enough for them. So, they're going to close those, but they are doubling down on their House of Sport brand, which is kind of like a showcase store more and more focused. And so again, kind of part of this portfolio, hybrid portfolio strategy that we've talked about. So, a lot of growth there and really good financial results, which is in pretty stark contrast to, you know, as we're wrapping up the season, what we've seen from most retailers, which is even if they got positive sales growth, the profits largely pulled back.
Michael LeBlanc 10:47
And our good friend, Mr. Kimbell, Dave Kimbell, one of our guests on the show his company Alta is doing well as well.
Steve Dennis 10:53
Yeah, I mean, this, this is even a bigger success story. I think in a lot of respects than Dick's, I mean, amazing comp store sales 15.6%, I don't think we've seen anything like that. anything close to that from any major retailer, they're up, here's another, you know, big number up 38% compared to 2019, which is, again, is comp growth, but, but a bunch of new stores 16% operating margin, don't hear that too often in retail, and they opened 47 new stores, turns out physical retail, still not dead, I we have said that every episode. And here's something, (crossover talk) I know, like, I gotta get, I get like $10, if I say that, I have a sponsor for that.
Steve Dennis 11:12
But the other thing, I was going to point this out, we were talking about Macy's earnings, whenever that was a couple of weeks ago. So, Alta, which for people outside the US, is a beauty focused concept. Their market cap is now $26 billion, which is up 134% In five years. Macy's, which as far as I know, is the number one department store chain in the US for beauty, Macy's sales, not just beauty, or sorry, market cap is 5.5 billion, which is down 30%. So, if you think about how dominant department stores were not just in the US, but pretty much everywhere,
Michael LeBlanc 11:32
Sure, sure.
Steve Dennis 11:34
in the beauty category going back 10 or 15 years. Here's a company that focused on that category that has just exploded with the number of doors that have, their market share and everything. While Macy's businesses, well, I think it's gone down considerably, but certainly has gotten, gotten nowhere. So, to have a category focused company that is five times as valuable as the number one department store that you compete with, I think is, it’s pretty remarkable. I think that's a good use of that word.
Michael LeBlanc 12:48
And let's, let's talk, let's wrap up with a couple of quick things. JCP earnings, JCPenney earnings, swings to a loss. Talk about that for a second. And we should also probably talk about Gap, who put out some, some news and some executive changes and some less than positive results. A few comments, quick comments on it.
Steve Dennis 13:05
Yeah, just quickly, JCPenney, because they're now owned by Brookfield does not report their, their results separately, but there was a filing that they had to do, I think it was had to do with some debt, debt registration or something like that, where they revealed some numbers, not for the holiday quarter. But we did see some quarterly numbers for the last several quarters. And if you look at the third quarter, what we saw is they were making some money, but they swung to a loss. So, you know, the general sense, even though there's some positive statements that have been made about Penney’s’, is if you look at what we know about their traffic, what we see just more broadly in the moderate department store space, and now we've got this little tidbit about some of their earnings is things, things are not turning around, at least not yet there. Gap news, you know, just sort of more trouble in the great middle of apparel. They had quite a weak holiday season. So yeah, they're making some changes in, in leadership. So, I mean, it just continues to see, (crossover talk).
Michael LeBlanc 14:11
I think Athletica, which was seen as one of their brands on the, on the make, they're changing their president there, right?
Steve Dennis 14:19
Yeah, it's kind of a I don't remember enough about all the changes, but it seems like it's been kind of a revolving door in management in not only the Gap brand, but Athletica and Old Navy and so yeah, it's they just keep trying stuff and none of it seems they're really, really be taking hold.
Michael LeBlanc 14:36
A quick hit on Amazon announcing their closing some of their Go stores. I mean, some of that I looked, I looked at locations. I'm familiar with their locations in New York, and it feels like there's just nobody there anymore. Like, you know, 50% of people are not going down to Manhattan, certainly not five days a week or six. So, I think they're, I think just nobody's in there. So, to me it, I don't know, do you think it's a, you know, it's certainly not moving them towards there. 3000 store location but at the same time, (crossover talk) you know, it does feel like, listen nobody's there, downtown isn't the way it was. So, we don't need this store anymore. Do you have a broader assessment that maybe the technology is just not as compelling as, as everyone thought it might be?
Steve Dennis 15:15
Well, I think the one thing we can say definitively is that the Amazon Go formula is not working, where Amazon needs it to be, because this is, you know, this concept is quite, quite old. Now, at this point, you know, if it's a concept that is working, well, they'd be rolling it out, right.
Michael LeBlanc 15:22
Right.
Steve Dennis 15:23
So, I think this just fits into what we've seen with Amazon Style, and Amazon Fresh that Amazon is going through a big rethink, and maybe a reboot. So, we'll see. But yes, I agree with you, I think that they are trying to clean up things that are a drag on their performance, and that don't really take them forward. Whether this is a sign that they're bailing on the rollout of Amazon Go, I wouldn't conclude that because they experiment so much. And you know, some of this stuff is kind of a rounding error. But, as we have talked about, and as part of my predictions for the year, we're gonna see some big changes at Amazon. This isn't a signal of a big change. I think it's really just sort of a precursor to some bigger moves in physical retail, which might be doubling down on growth, or maybe pulling back completely.
Michael LeBlanc 16:22
Some interesting news from one of our prior guests from Bunnings, Michael Schneider, Australia, in Australia and New Zealand. Bunnings, which is kind of like a Home Depot format. And not kind of it is a Home Depot, a home improvement format. It has made a big move into pets. It is apparently one of the biggest moves from a category perspective, biggest expansion in decades. What do you think of that? I mean it's interesting, I mean we all know how interesting the pet category is. But do you think it's going to work in a big box format?
Steve Dennis 16:48
Yeah, I think, I think it could, I mean, I certainly don't know a ton about the Australian and New Zealand pet market. But I think a lot of the category killers. And this is maybe a topic for another, you know, could be a focused episode. But the category killers that were so successful, really around the world, in the 80s, and 90s. Many of them are really struggling to get their footing. You know, we've talked about Bed Bath & Beyond here, but others. And I think it makes sense to try to rethink your product assortment to strengthen the overall offering. Now, it may be in particular, a response to the slowness in the home market. You know, that's a worldwide phenomenon that home sales are slowing down. So, it might be a bit more opti-, opportunistic. But I suspect we're going to continue to see a lot of changes from the home improvement players, folks like BestBuy and others, some of the long-term trends are not necessarily in their favor.
Michael LeBlanc 17:46
All right, well, let's leave it there. Now. Before we get to our excellent interview with Kevin to President Primark, us a few words from our presenting sponsor.
Michael LeBlanc 18:25
There are two types of retailers that are committed to transforming at the speed of disruption and those that aren't. If you're a retailer that implements significant changes by intuition, you may soon join the Hall of Shame of executives who bet the farm on initiatives that ultimately failed. So, you know, maybe consider brushing up your resume. But if you are a retailer hungry for a better way to gain useful insights on the impact of your store layout, design, and innovation pilots, you need to know MarketDial. MarketDial is an easy-to-use testing platform that emboldens great decisions, leading to reliable, scalable results. With MarketDial you can be confident in the outcome of your in-store pilot initiatives before rolling them out across your fleet. Validate your remarkable ideas with MarketDials’ in-store testing solution. The proof is in the testing, learn more @marketdial.com. That's marketdial.com.
Steve Dennis 18:44
Well, Michael and I are delighted to welcome Kevin Tulip to the podcast. Kevin, how are you doing today?
Kevin Tulip 18:50
I’m great. Thanks for, thanks for having me around, Steve, how are you?
Steve Dennis 18:52
We're doing well. And where are you joining us from?
Kevin Tulip 18:55
Yes, I'm up here in Boston, where we have our Primark, US home office.
Steve Dennis 19:00
Excellent. Excellent. Well, I am sure that we'll get into a lot of details. But usually what we like to do just before we kind of dive into the questions about the business, and your particular perspectives, is just have the guests tell us a little bit about who they are, you know, maybe a bit about your personal and professional journey, and then we'll dive into the questions.
Kevin Tulip 19:18
yeah, of course. So, I actually joined Primark 20 years ago, just over 20 years ago now. So, I started working at Primark in Newcastle in the Northeast of England where I grew up. And I started as a holiday temp colleague working on the cash register on the lady's floor, and actually just fell in love with retail, across those first few months of being in there and, and, and really saw that actually, there was a fantastic career to be had here with the supervisors and the managers that I had around me. And at that point, the business was going through some, some, some huge growth. So, I also had the ability to move around a lot. So, it was, it was great to start back then with what was back then at a small Irish business. And of course today is becoming a global business.
Steve Dennis 20:06
I'm sure many of our listeners are familiar with Primark, but particularly as you're new, newer to the US and North America, can you give us a little sense about the brand? What is it all about, value proposition, scale scope, those sorts of things?
Kevin Tulip 20:22
Yeah, of course. So, we actually started in 1969. And we were founded by Arthur Ryan, who set up our first store under the name Pennys in Dublin on Mary Street. That was the first store that we opened. And the premise was always around bringing affordable fashion to the people of Dublin. Something that still we, we base ourselves on today, we've grown over, over the years over the more than 50 years, to now 15 countries, 72,000 employees globally. But we're still very much built on those foundations. So, everyday affordability for everyone in all markets where we trade.
Steve Dennis 21:01
So, now you are leading Primark’s expansion into the US and tell us a little bit about what that, what that looks like, how it's going, some of the lessons learnt?
Kevin Tulip 21:14
Yeah, absolutely. So, I moved over to the US in 2021. Previous to that, I'd been leading the two markets, two of the markets in Northern Europe. That was in the Netherlands and Belgium. And it was great for me to be able to move over to the US at a time where we had made a solid decision and therefore a public announcement on our, on our growth. So, we'd announced six-, to get to 60 stores by 2026. We were trading at that time, on 13 stores, we just opened a collection of stores through COVID. And it was great to join the business at that point where we will make it that day. That announcement and that, that growth plan. So, it’s been great over, over, you know, just over 12 months, they're really building a team here building out the team in Boston, to really get ready for that growth to open some stores. So, great to say that we opened three stores during the holiday season there in New York on Jamaica Avenue, Queens City Point Brooklyn and Roosevelt Field on Long Island. And really getting ready now for we've got seven more store openings coming up between April and September. So, a lot of focus has been getting ourselves ready for that growth. And then also making sure that we're in a great position to continue that growth through to 2026.
Steve Dennis 22:32
Now I know that there are a number of brands that have come from the UK and tried to be successful in the US and it hasn't necessarily gone so well. Do you take any lessons from, from Sainsbury's, Tesco Marks & Spencer experience here?
Kevin Tulip 22:50
Yeah, absolutely. I mean, we are an Irish business. So, we always have a bit of a chuckle on that one. There are a number of, of, of UK businesses that have come over. But as an Irish business, we definitely feel, feel very clear on some of the lessons that have been learnt. And I think, you know, our, our, our growth has been slow. We first opened our first store in 2015 in downtown Boston. We spent a lot of time previous to even me being here, really understanding around our model and our concept and what works and really trialing differences between store size and product range product offer from our, from our global range. And we really still continue to do that through to today. You know, it's taken us from 2015 up until today to get to 16 stores. And of course, now we feel a great sense of confidence on pushing towards that 60 store estate by 2026. But I think a lot of that has been around those lessons.
Kevin Tulip 23:22
You know, we, we right sized a couple of stores, we looked at our product offer and saw where the US consumer was really getting excited about some of that product. And we've leaned into that, you know, the license has been a fantastic product offering for us. So, we've really made sure that you know where, we have the right licenses and the right product range. And you know, customers have responded to it. I was really proud, when we opened that store in City Point downtown Brooklyn on a very, very cool day on December 20. We had just over 1000 people queued up before we opened the doors. That really tells me that you know the brand travels and that people are aware of our brand even before we open the store.
Michael LeBlanc 24:29
It's really interesting listening to your global expansion strategy. I might, I might call it, the kind of a carpenter's measure twice and cut once approach versus the kind of barnstorming into a country open a bunch of stores on the same day and you know, they both create momentum differently for the business. I wanted to peel back, you just articulated some changes in our thoughts around adapting merchandise strategy and merchandising strategy and maybe format but as you go and inevitably go back to the head office and you're, you're sitting around the table with your fellow country leaders? How do you explain or what are the differences in the strategy? Do you talk about their reaction to the different competitive set, or the real estate dynamics in the US? And, and any challenges that you ran into that were kind of unseen, you know, when, when you're talking to your fellow counterparts, and you and the team are putting out the strategy? How do you, how do you explain America, back home? And what it takes that may be a bit different to be successful?
Kevin Tulip 25:26
Yeah absolutely. I think there's a, there's a, there's a few different topics that I sort of talk about when I'm talking to that that peer group, I think, store size is, is, is one of the major ones, I think, on the conti-, continent of Europe, we would be open in-stores, you know, 60,000 square feet, in city centers on traditional high streets in Europe, that's where we've been very successful, and, and, and where most of our competitor centers business, obviously, for the US, although we do have a couple of stores in downtown locations so, Boston, Chicago, and Philadelphia, you know, we do most of our business in malls. And that's where obviously, the store size and layout and even department adjacencies are quite different from what we would normally do in a multi-floor store, in a, in a, in a, you know, city center and a High Street in Europe when it comes to product mix.
So, certainly for us, we're very focused on apparel, you know, we really want to continue to build our brand here. And we're doing that, you know, on, on, on some great, you know, category mixes on ladies, men's but also on children's wear, which has been a really great category for us over the last number of years. And has actually been growing, you know, and I think in Europe, of course, people are a lot more used to our brand. They've known us and, and in a lot of European countries, even like me, you know, you grow up with Primark,
Michael LeBlanc 26:29
Sure.
Kevin Tulip 26:30
A retailer where your mom would have taken you into as a kid, so you're well aware of it. Whereas for us, we're really introducing that brand, to some cases in new markets. So, we definitely focus a lot more on the apparel. In Europe, they've got a probably a bigger mix of, of let's say, lifestyle and homeware and we still have that product, but a much smaller category for us. And then I think licenses are another area. So, we work globally, with a number of licenses like Netflix, and we have a number of big sports licenses like NFL NBA. But for us, we do a lot more in-stores in terms of bringing that product together. And certainly, we'd have it much further forward as a priority. And then maybe some of our European stores.
Michael LeBlanc 27:00
I mean, you're an international business executive, when you, when you came to Boston, was there something that surprised you in terms of a challenge that you didn't think would be there? Now, of course, you came during the COVID era. So, let's set that aside because none of us expected that. So, let's put that one aside. But when you know, when you're sitting in your office and gearing up the business, you're like, wow, I didn't, I didn't expect that to be the challenge that it turned out to be. Is there anything that comes to mind?
Kevin Tulip 27:23
Yeah, I'd say probably the frequency in which our customers come into the store, I think that there is definitely a difference between US and, and, and Europe. And I think in Europe, it's, you know, for most part, a lot more people live in the city centers. So, people would be dropping into stores probably more frequently, but actually spending less while they're in. Whereas I think in the US, and largely, it's where we do business, obviously, in malls, people are making that journey to the mall. So, they might go less frequently, but actually spend longer in the store and spend more while they're in there. I think when you then follow that through, you really need to focus even more around that in-store experience, and really thinking about how do you take those any pain points of being a physical only retailer and remove them, you know, whether it's,
Michael LeBlanc 27:38
Right.
Kevin Tulip 27:39
It’s something simple, like removing item limits on the fitting room, or trying to, you know, remove a cue from a cash desk, you know, how can we continue to do that. And although we're very, very, I'd say focus, obsessed, I'd say on, on price and value. The in-store experience for us is also a massive priority where we spend a lot of time.
Michael LeBlanc 29:07
Interesting, and it sounds like there's more similarities than differences. I just wanted to follow one quick thread on that. What about things like returns? Do you find it, is it higher than you would have expected, is it about, normal? And I guess I'm getting out there. your, your experience of the customers in America versus other places that you've operated? Do you find any material difference or, you know, a minor difference?
Kevin Tulip 29:27
There's actually probably more similarities than differences, if I'm honest with you, which I think has also led to the success of Primark in the US so far. I think some of the I guess some of the learnings for me being here was, you know, most of the European markets and certainly where I've been based are fairly small. So, although you have some cultural differences between the big cities, you know, the fairly small countries, I think for me when I took over Primark US, of course, you know, I'm based here in Boston, but we also have a store down in Sawgrass Mills in Florida. And we have a downtown store in Chicago, Illinois. So, really, really starting to understand the geography and the climates differences. And it's probably been something that I've been also just getting used to and getting to grips with. I think there's a lot of benefits in it for us. But it's something that's quite different from most of the European countries where we trade.
Michael LeBlanc 30:22
Now let's talk about eCommerce. So, famously, controversially, maybe, I don't know, but you know, you're not a leader in eCommerce, you've been a bit, how shall I say, slow to embrace? What's your thought around eCommerce? And how is that thinking evolving as you move forward?
Kevin Tulip 30:38
Yeah, look, I've always been really proud to, to, to be with a business that has made a very conscious choice, and that we've grown ourselves behind bricks-and-mortar. And, and, and I've always felt very proud of that. I certainly have been challenged on it throughout the years. But I really think that our strategy is built around customers coming into our store, and everything that we do, all of the conversations, meetings, all of the forums that we have in the business, are always geared up towards that in-store experience and that product,
Kevin Tulip 30:55
I think what we have gone through over the last decade is, is, is really understanding, around the impact of social media. So, really building up a very large social media following, and really being clear around which platforms we want to use for that. We do a lot of our marketing on social media. And we have, you know, 10s of millions of followers on social media that's been built up over a long time.
I think the other, the other bit of work that's been happening, and quite recently, has been around updating the website. So, I think, you know, we're very clear around that digital experience in terms of a customer being able to stock check, being able to see our new product online and having great quality photographs and, and, and, and being able to check what's in their local store, before they make the trip in, we've been able to launch that in the UK. And actually, we're looking forward to being able to launch that updated website in the US quite soon.
And some of the statistics have been great. I mean, all o-, o-, over 80% more hits on the website, since the updated versions had gone out. And the customer feedback has been great, you know, around understanding what is in stock in which size before I actually get into the store.
Michael LeBlanc 31:24
Right.
Kevin Tulip 32:25
I think our focus has been very much around how do we continue to build on the in-store experience using digital? And of course, you know, I'm sure you're aware, but we have, we have and are trialing a click and collect model in the UK, a fairly, fairly small trial. But that's ongoing at the moment for 25 stores in the UK. And look, we're really excited to see what the results look like. But, you know, for the US, I'd always be very clear that that needs to be incremental to our in-store sales. And they would need to be proved in terms of that model.
Steve Dennis 33:04
Curious from a from a process standpoint, how you guys, if you're willing to share, kind of think about the decision-making process, because you know, on the one hand, there's all this talk about customer centricity, and you know, needing, being customer obsessed, you know, it's a pretty common thing for retailers to talk about. And I would be surprised if your customers weren't telling you they didn't want eCommerce, but at the same time, we also know there have been not, not just you guys, but others. Well, first of all, lots of, lots of retailers have experienced the problems with actually making money in eCommerce. So, it's not as if it's just, you know, a panacea for, for all issues. But we've also known, some retailers like TJ Maxx that a lot of the off-price retailers have been slow to embrace eCommerce. And I think that's largely because of the profitability. So, is that how much of this was economics? How much of this is about responding to the customer? Or is it just that you guys are so committed to the brick-and-mortar experience?
Kevin Tulip 34:05
Yeah, look, I, you know, we, we have calls to get feedback from customers asking for, you know, on an online stall and being able to get home deliveries. So, we do get those, those comments and those requests, but what we hear far more is about customers loving our value and wanting more of it. And I think there's, there's certainly an understanding out there that for our model to work online just doesn't fit into that model. And I think that's where, you know, the trial of click and collect allows us to build on, on feedback from customers around sort of ease of shopping and access, I guess. And we can see the results of that without really breaking the model, I guess. And that's why we're quite excited to see that but you know, our choice has always been bricks-and-mortar and we've always been really clear around anything that we do needs to build on top of that in-store experience.
Michael LeBlanc 34:59
Last question for me, and I'll pass the mic back to Steve. Lessons learned so, for the fellow retailers listening, maybe they're outside of America, maybe they're there within the US. What are the key success factors? What lessons have you learned that you'd share and say, Listen, if you're going to be successful, do these three things. And you, you know, it, it will work out for you, is there? Is there anything you'd want your fellow retailers to know or understand?
Kevin Tulip 35:26
Yeah, you know, I think, really, really understand the core of your business and be obsessed by it, you know, I think for us, we're very clear around, around products and around that value price. And I think we've set up our business to deliver that. I think, you know, it's very easy I guess, to get distracted, and try to be everything to everyone. You know, and, and particularly in today's world, I think, you know, it's, it’s, it’s easy to get into that. But actually, I think, to build a team and to remind yourself constantly about what has made you successful, and to continue to build on top of that, has, has, has really led to our success. So, that would be my advice to really understand your product and be obsessed about continuing to drive that.
Steve Dennis 36:12
One thing just I was going to mention earlier was that as I was prepping for this interview, I went through an investor presentation that your parent company did, which featured a lot of really amazing interiors for some of your, your stores around the world, which kind of leads me you know, not, not only to talk about what's next for you, and Primark, here in the States, but also, more broadly. Is there anything you can share about the growth plans and some of what you've got in store for other markets as well?
Kevin Tulip 36:42
Yeah, absolutely. I think, look, we've, we've we're now in 15 countries around the world. So obviously, you know, I talk a lot about the US expansion, but there's still a huge amount of expansion happening across our European markets, as well as the 60 stores by 2026. You know, globally, we're moving towards 530 stores by 2026, which is exciting. We've got some great growth markets like France and Italy, where, you know, we're really proud of the results, and also the stores that were opening there. So, we continue on that as well. And for us here in the US, you know, 60 stores by 2026 is, is, is where we made sort of our stand and, and our ambitions clear. And look, I'm excited to see the continued success. I'm excited to see, you know, we had a great holiday, I'm looking forward to the new store openings in 2023. And we'll continue to learn the lessons, we'll continue to be obsessive about that, and look to, to, to really refine the business model for the US market. And look, hopefully, we'll continue that and be able to announce further growth in the future.
Steve Dennis 37:48
Well, I know Michael is looking forward to stores coming to Canada.
Michael LeBlanc 37:51
Yeah.
Steve Dennis 37:52
So, I don't have any breaking news here? (Crossover talk).
Kevin Tulip 37:54
We have a store opening in Buffalo coming up. So, we do know that around 40% of our customer base in our new store Walden Galleria is going to be coming across the border. So, excited.
Michael LeBlanc 38:04
Listen, I think there's lots of opportunity. I think the Canadians would love to, would love to see you here and it's exciting, you know, a business that continues to expand. It's been a fascinating interview. So, on behalf of Steve and myself, thanks so much for joining us on the Remarkable Retail podcast. It was a great insight into a global business that is making it successful in and around the world and in the United States. And it was a great peek into your thinking and strategy. So, thanks again, Kevin, for joining us.
Kevin Tulip 38:33
Thank you for the invite. It's been, been great. Thank you.
Michael LeBlanc 38:37
If you like what you heard, please follow us on Apple, Spotify or your favorite podcast platform to get you up with all our great interviews, including "Organized for Growth". Our interview is with Satish Malhotra, CEO of The Container Store. New episodes of Season 6 presented for another season by our friends at MarketDial will show up each and every Tuesday. And be sure and tell all your friends and colleagues in the retail industry all about us.
Steve Dennis 38:58
And I'm Steve Dennis, author of the bestselling book, ‘Remarkable Retail: How to Win & Keep Customers in the Age of Disruption’. You can learn more about me through my consulting and keynote speaking at stevenpdennis.com.
Michael LeBlanc 39:13
And I'm Michael LeBlanc, Consumer Retail Growth Consultant, keynote speaker and producer and host of a series of retail trade podcasts including this one. You can learn even more about me on LinkedIn and you can catch up with Steve and I in person at Shoptalk in Vegas March 26 And a month later in Barcelona at the World Retail Congress April 25.
Until then, safe travels everyone.
SUMMARY KEYWORDS
store, Primark, business, retailers, retail, big, brand, customers, continue, growth, earnings, markets, talk, sales, opened, thought, product, people, Boston, net loss