Psyche, a leading independent retailer of childrenswear, menswear and womenswear in Middlesbrough, celebrates its 35th anniversary this year and has just undergone a huge £500,000 extension of its backroom facilities, which had previously not mirrored the growth of the business. Tom Bottomley gets the details from managing director and industry legend, Steve Cochrane.
Tom Bottomley: What spurred the new £500,000 extension to the Psyche business and how has it added to what you already had?
Steve Cochrane: We’d just outgrown the building. It was 35,000 square foot, but it was all retail space really, there was not enough storage space, the offices were tiny and cramped, and the staff room was quite often full and just not big enough. We have 84 members of staff now, about 50 of which are on the shop floors, and we’re advertising for another two people for the online business, where there are currently 14 working. As we’ve grown, we hadn’t increased the accommodation space, but we’ve now added an additional 5,000 square foot to the building. I wanted to invest in a nice staff room with a pool table to improve staff morale. We’ve also got great office space now and everything is brand new. My office is now ridiculously big. In terms of funding the extension, we did it partly out of cash flow, partly out of a Psyche pension fund and we took on a small loan, though nothing that will stretch us too much.
TB: What areas are performing and how is the business split?
SC: The childrenswear side of the business has seen a big increase and the women’s has seen a slight increase, too. Tailoring has contracted, men’s fashion is a bit flat and the website is going like crazy – 37 per cent up on last year. The split of the business is 11.4 per cent childrenswear, 54.3 per cent men’s, 22.6 per cent women’s and the rest is non-specific gender. We also do a bit of homeware, which we sell quite well online.
TB: Where are the majority of your online customers located?
SC: The majority are in London, a whopping 61.2 per cent of our online customers in fact. We do a bit through Amazon and we pay for Google AdWords and do a lot of targeted mailers – building a customer database all the time. Second is Glasgow, third is Birmingham, fourth is Manchester, fifth is Middlesbrough and sixth is Newcastle. And then about 10 per cent is coming from overseas.
TB: Is the growth being driven by the online business?
SC: Yes, very much so. What’s exciting is we launched an app about two years ago, but it never really did anything because you could only buy using Paypal. Now we can take credit cards on the app, it’s made a huge difference. The app now accounts for 9 per cent of our online sales and that’s a massive increase on last year, where it was only about 1 per cent. We only relaunched that mid-November last year. An app is a lot cheaper than a website, and a website is a lot cheaper than a shop, so that could be the future.
TB: But surely the bricks and mortar shop still has a big role to play?
SC: It does, of course. I’ve been doing this for 35 years now, it’s Psyche’s 35th anniversary this year, and I absolutely still love it. It isn’t work to me. I love buying, I love product and dealing with customers, and I love being on the shop floor, although I don’t get time to do it as much as I’d like. I still love retailing full stop, I’m very passionate about it. I also think shops will come back stronger in a few years’ time, but in a slightly different format. Things will stabilise and settle down and once they do, the novelty of going to shops will come back. Shops will have to improve and evolve and they will need screens and to be interactive. Click and collect is growing at a massive rate, so you’ve got to come in to the shop to collect your purchase.
TB: How much of your business is now done online?
SC: The split is 68 per cent store and 32 per cent online at the moment. However, online sales increased by 36.7 per cent and 32 per cent the previous year, so at some point over the next year or two I think online sales will match the store’s. The amount of web sales we now do from mobile phones is enormous, comprising some 63.7 per cent of our online sales. If you include sales from tablets that rises to 78 per cent.
TB: Would you consider yourself to be a ground-breaking retailer?
SC: Most definitely. We try loads of new things all the time, though quite often they don’t work out. We actually launched online in 1997. Unfortunately, at the time, I had the Psyche own label and then I took on this building in 2002 and that took my focus and attention away from online. I wish I’d continued to put all my efforts in to online, because we’d be a massive player now. We probably got in to it too early if anything. We’ve only really been refocusing on it for the past three years.
“I’ve been doing this for 35 years now, it’s Psyche’s 35th anniversary this year, and I absolutely still love it. It isn’t work to me. I love buying, I love product and dealing with customers, and I love being on the shop floor.”
TB: This year marks Psyche’s 35th anniversary: did you ever envisage having such longevity, especially seeing out so many recessions in that time?
SC: Well, I started off as the singer in a punk band called Sliced Tomatoes and my first shop was called Sliced Tomatoes, too. The band wasn’t very good and we didn’t get anywhere, but I designed the clothes we wore and people liked the clothes better than the music. That’s when I had the urge to do something with clothes. When I opened the shop in 1982, it was a bit of a laugh really. It was meant to help to get me fixed up with girls rather than be a proper business, because I was still young and daft – I was only 23. This is, of course, a big business now, with a boardroom and non-executive directors – the whole nine yards. It’s been an exciting, rollercoaster growth. We’ve had a lot of challenges along the way and 2008 was the biggest challenge. That hit us quite hard. I didn’t really feel the other recessions to be honest, but that one I did. It set us back a bit and probably turned my attention away from e-commerce when I should have been getting more in to it.
TB: What plans do you have to celebrate the 35th anniversary?
SC: The actual anniversary is on 1 August, but we’re going to have a big party in October – it’s a better time for everyone. We’re going to throw a lot of money at it. We’ll have a catwalk show, live bands and we’ll do food and drink – they’ll be a lot of stuff going on.