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At 44, Stuart Roberts is a retail survivor. In 20 years of trading he has weathered shifts in street fashion, the crushing dominance of big chains and the indifference of landlords. But right now the founder of Two Seasons, a 12-outlet skiing and board-riding specialist, is more preoccupied with crime than competition.
“Crime is one of the biggest problems facing retailers,” Mr Roberts says, in his clean-lined, well-designed store in Leicester. “The police have downgraded the crime of shoplifting so that it has almost become acceptable. Unless there is physical violence they are reluctant to respond.”
The desirable brands sold by Two Seasons include Quiksilver, Animal and O’Neill, which means stolen garments can be sold by thieves for a lot more than clothes filched from a discount chain.
“A lot of the pilfering is driven by drugs and the need for money that it creates,” says Mr Roberts. “It’s very difficult to negotiate with people if they are desperate.” Two Seasons staff regularly suffer threats of violence. As a result Mr Roberts has just spent £15,000 ($30,000) on tagging equipment and security cameras – money that would otherwise fall through to the bottom line.
The entrepreneur, a thickset man with the easy-going manner of the ski bum he once aspired to be, worries that repeated confrontation with thieves contributes to turnover in his 130 staff. Employees are important to his business. Most are keen surfers, skiers or snowboarders whose expertise drives sales. They work primarily to finance trips to snow-capped mountains or windswept beaches.
Mr Roberts set up in business for the same reason in the early 1980s. “It was a lifestyle choice,” he says, “I was just trying to make enough money to go skiing.”
He had dropped out of a business studies course at Coventry University because he was “bored stiff”. About the same time his father’s business, a wholesaler of sports equipment and clothes, went bust.
Mr Roberts took on a tiny shop that would eventually become the Two Seasons business in Northampton with the aim of selling some of the stock. It was “a shambles”, he says.
But the epic Wimbledon battles of Bjorn Borg v John McEnroe had caught the public’s imagination and tennis gear sold well. The vogue for brands such as Fila and Sergio Tacchini among football “casuals” also helped the fledgling business.
By the mid-1990s, trading was becoming tougher because of the expansion of big sportswear chains such as JJB Sports and JD Sports. Mr Roberts had meanwhile bought out his father’s stake in the company, which by then was operating two stores. This gave him enough control to change tack, dropping general sportswear and focusing on skiing and boardriding.
He moved his main store to a better site. The idea behind its new name – Two Seasons – was that sales of skiing and snowboarding gear would dominate during the autumn and winter, with surfing equipment taking over in spring and summer.
Mr Roberts’s Barclays bank manager was unimpressed. “We had a lot of debt and the bank would not advance any more, so things looked bleak,” Mr Roberts says. A customer rallied round with a £30,000 loan on flexible terms. “I went back to the bank, said ‘Thanks for nothing’ and moved our account,” Mr Roberts recalls.
It has been pleasing to prove the pessimistic bank manager wrong. Two Seasons expanded steadily as extreme sports grew in popularity. During the late 1990s, the vogue for snowboarding propelled growth.
More recently, surfing has become hot. Two Seasons occupies a market position between retailers such as Snow + Rock, focusing on equipment and functional clothes, and others such as Fat Face, which concentrates on street fashion inspired more loosely by extreme sports.
Two Seasons covers both niches, says Mr Roberts. “We have always sold a lot of equipment. It is low margin, but it boosts our credibility. We are successful because we have a broad base of customers. The guy who comes in for a snowboard or skis might buy a pair of jeans or a T-shirt, too.”
Two Seasons expects to make sales of £10m this year, generating earnings before interest, tax, depreciation and amortisation of about £130,000. Those figures show how tight margins are, and how little room independent retailers have for error. Mr Roberts says one skiing or surfing store goes under every week.
Yet he believes Two Seasons could do well in some of the very towns and cities where these businesses have gone belly-up. If enough such opportunities arise, he expects Two Seasons to grow fast, perhaps adding another 11 stores in three years and expanding outside its current Midlands stamping ground. But that would involve raising external finance, probably by selling an equity stake for about £5m.
The company would also need to professionalise its management, in the first instance by taking on a finance director. Finance is currently one of the many functions – including testing snowboards on knee-deep Canadian powder snow – that Mr Roberts fulfils himself.
His brother Alan, 37, is operations manager. His sister Helen, 39, runs the Cambridge store. All three hold shares in the business. Mr Roberts says the bond of trust between the siblings has been a huge help in making the business a success.
Ultimately, they want to sell the business, Mr Roberts says, so they can “go off to enjoy the sports that we love”. Whether they will be able to do so may depend on the rate of global warming.
The value of Two Seasons and the scope the siblings have to spend the proceeds of their business on whizzing down mountains depends partly on the availability of snow. And the white stuff is disappearing at an alarming rate from slopes favoured by winter sports fanatics.
How retailers keep a foothold in an increasingly difficult market
Retail is alluring to would-be entrepreneurs because of the apparent simplicity of the business model. But it is also a graveyard for start-ups because of the intensity of competition and the difficulty of securing premises in locations with high footfall. Stuart Roberts, founder of Two Seasons, a chain of 12 specialist sports shops, has the following advice:
● If you are selling items that have a fashion element to them, it can be a mistake to get too close to your suppliers. Mr Roberts says: “Brands come and go. They have a life cycle. If you stick with a brand too long you could be on your way down with the brand.” Instead, the retailer should “look for new, interesting brands that are coming through”.
● Stores need to be “exciting, different and comfortable”. Customers are prompted to buy by the shop’s appearance and the advice of staff as much as by the brands for sale.
● Specialist retailers should negotiate hard with landlords. “The market has softened and there are opportunities to have rent-free periods and turnover-based rent.”
● A lot of retailers succeed with their first store but fail with their second. The antidote is to “find out what you excel at, break it down into its component parts and replicate them in your new store”.
● Expect to deal with security yourself. Crimes against businesses are a low priority for the police and criminals exploit this. Reserve some budget for counter-measures such as CCTV, magnetic tags and security guards.