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Result Performance
A relative newcomer to the outdoor retail industry, Result Performance has a solid line of outdoor and sporting clothing which could be perfect for a shop that's looking for something new to offer its customers. Jon Bruford interviewed David Sanders-Smith, Result Clothing's founder and MD.
Result comes from a solid background in promotional clothing and a sidestep into the retail arena makes perfect sense. When you see their clothing lines, it's a natural move, though you would be forgiven for asking what makes them special in what is becoming a very crowded marketplace.
Some retailers have spoken in recent months about declining quality in sports and outdoor clothing, but that's not a criticism you're ever likely to hear about Result. And making them even more retailer-friendly, they have a stock replenishment system that means you don't need deep pockets to benefit from their lines, and you don't need to order six months ahead. David Sanders-Smith explains, in conversation with SGB - Sports and Outdoor's Jon Bruford
SGB: Could you tell us about the company's background? Result has a long history, after all.
David Sanders-Smith: We started as a trading company way back in 1971, in London, then later moved to Luton and manufactured there as we grew as a promotional clothing company, and eventually, in the late 1970s, moved to a factory in Colchester. At the beginning of the 1990s, we decided to start stocking jackets and started importing a few to supplement what we were making ourselves, then that developed into a stock range called IS Stock Lines. We gained two customers who were already stocking t-shirts for Fruit of the Loom, Hanes, one was called Falk and Ross GMBH in Germany, the other one was called Imbretex in France and that was the beginnings really of Result, a name we came to because it is neutral.
SGB: You've not been in the retail side of things for long; any notable success stories?
DS-S: One of the smaller distributors we have worked with is a company called Hausman in Austria, who have nine textile cash-and-carries, but they've always run their promotions business as separate from the retail textile side. When we introduced soft shell two years ago, they went from a turnover of 80,000 to 800,000 a year with us, after taking the soft shell into their retail ski market.
That was the point that we realised that we had something on board that could be interesting to the retail business in the UK because we carry huge amounts of stock; I know retailers complain that they had to commit to stock so far ahead of time and sometimes the season just doesn't kick in and they end up selling products already at a discount before they even have actually realised a full price for it.
Well, here we are sitting with this stock, we can offer a service, removing the stock gamble, which is the line that we tried to follow: Remove the stock gamble and order as you want. But it's building up the confidence, it needs people to get confident because for so many years they've been used to working the norm of going to exhibitions, looking at the products which are available, placing their orders, paying a deposit and waiting for them to arrive. And sometimes they don't even get everything that they've ordered, and there we are sitting with a good retail range of products, because the promotional textile business had to evolve on the basis that it needed the same quality standards as retailers. In fact, I believe that the Result range has a much higher quality standard than many well-known brands.
SGB: Is that one of the strengths you think Result are bringing into retail, that quality?
DS-S: Our main production's in China but we supplement that with subcontractors. We have quite a problem with subcontractors because our standards are so high in comparison with the brands we're normally working for and some of them, as I say, are well known brands. They never have problems, they never have returns, with Result, in fact we've actually just sent out two container-loads back to one subcontractor, a factory making for well known French brands, simply because they haven't been produced to any formal standard that we would find acceptable. And we will never deal with those subcontractors again, but it's a two-way street, they don't want to deal with us other because our standards are far too high for them to work to.
SGB: So what is it particularly. I mean, it's one thing to say we have high standards, but can you quantify that? How does that manifest itself in the products?
DS-S: Because we've been manufacturers for so many years in the UK, our quality controls [QC] we set are based on how we would manufacture things in the UK, so that's the first principle. Our QC works to the same basis of the controls that we've always had with our own production; also we need to have total continuity of products because we're selling our product range across the whole of Europe. If there's something wrong with a product, it's very expensive to take it back from a far corner of Europe. It also messes up our customer base in that perhaps they want 200 or 300 jackets; we would soon lose distributors if they had a customer complaining because four or five jackets are not up to standard, so it's not a case of accepting that four per cent of your product can be bad because retailers quite often in the past have said, OK, well we work on the basis that we're going to have four per cent rejects. We've never had that standard. We've always worked to 100 per cent perfection because we're not selling one-by-one. A retailer is selling one product. Our customers are selling maybe 100 or 200 products, so it's a big loss if they have one of their customers falling down. If we're selling somebody a carton of small jackets, the carton of medium jackets has to be exactly the same colour. Well that doesn't matter too much for a retailer, he wouldn't be too worried about those principles but where we're coming from, because we need colour continuity, we need quality continuity as well.
SGB: Are there any problems with QC when manufacturing in China?
DS-S: I spend most of my time personally in China, nearly five months every year I'm there, very close to our production and anyone subcontracting for us. I don't delegate it to companies that quite often just rubberstamp things on behalf of the factory and stick a backhander or a very nice lunch. I will not allow that to happen with Result.
SGB: It's your brand at stake if you don't protect it.
DS-S: Exactly. We're busy building the brand. We are a family business. You know, we're not a huge company, we're a little company, but we've got every sympathy with people that are working with us that we want our brand to grow and we won't get it to grow if we don't come up with the right product.
SGB: In terms of Result product, what are you actually bringing to retail that's different and I mean that both in terms of how you service the retailer and the product itself. What's special about you guys?
DS-S: We're trying to give any retailer that works with us total support in that we don't create any e-business, we're not interested in making an e-business for our own part. If we have e-customers, fine, or retailers that have their own e-accounts, fine, but there will not be a situation where Result will be selling directly to the public. We will only sell through the trade. We want to have retailers on board who will come along to an exhibition and talk to us and look at our products and understand our products so that they can then sell on a one-to-one basis to their customers, traditional selling. That's what we believe in.
SGB: What about your restocking principles?
DS-S: Well our stocks are based on carrying six to nine months of demand, historical demand. All the time we aim to have the minimum six months of stock holding and we order for a further three months so at any one time if our stocks drop down to six months we would place an order for a further three months, so up to nine months of stock going forward.
SGB: And that's the stock that you're sitting on, which is waiting for the retailer.
DS-S: That's the stock that we're sitting on. But if there's a point where it drops down to six months, we order that stock. We'll order six months of stock because by the time it comes in we will only have three months of stock.
SGB: Where is your stock based?
DS-S: At Earls Colne on the Essex industrial estate, and at Colchester. We have 75,000 square feet of storage with five racks high in Earls Colne and we have a further 55,000 square feet in Colchester which is where we run our split pack business. Our main pack storage, full carton storage is at Earls Colne and our split pack storage - which enables us to send off one piece overnight to anywhere in the United Kingdom for next day delivery - is stored in Colchester. The main distribution for servicing UK retailers is from our split pack warehouse in Colchester.
SGB: What kind of retail merchandise do you support the retailer with?
DS-S: We have displays which will allow, for example, all our soft shell range fits on one display, a ladies range fits on another display. All the same size of display but the rails can be moved round a little bit for variations.
I'd look at the deal that we offer retailers. I think anyone placing an order for £5,000 is offered the loan of a stand because if we're supplying a stand we don't want to see other people's garments hanging on it. So we don't sell the stand, we loan it. If somebody wants to buy the stand they're quite welcome to buy it as well, they can do whatever they want to do with it. We offer some very nice hangers as well with the products at a very low price
We actually are now working on a point of sale package. All of these things will be available as from the middle of 2008. There's a whole new display pack that we will be sending out free of charge to all our distributors. Posters, wall hangers, wall stickers, various forms of advertising for in-shop advertising.
SGB: Do you do any kind of incentives for new stockists?
DS-S: We haven't done that as such. We offer volume discounts. But generally the price of Result products is on an 'I-want' basis anyway because the retailer, when he looks at what we offer our products at, can already see the benefits. Generally when retailers look at our product, they're very, very pleased with the return that they can make on it.
Some people have actually sold out of our stock but because they've got stock of other products, some have said they don't want to place any more orders yet because "we want to sell this other stuff before we come back and buy more of yours"; it's a little bit illogical but one of the benefits is that they know they can just come back and order one piece if they want, they haven't got to order 100 pieces but they've still got so much other stock stagnating.
Retailers are very, very nervous at the moment. The banks are starting to play up a lot with the textile business again and I think we're in for a financial squeeze this year with the way the economy is going. Retailers are going to feel the pinch more than ever because banks are hardly offering any support at all. That will be another opportunity for Result and the retailer, because we will have the stock available on the basis that we can deliver on a just-in-time basis. Quite often I've found when there's been financial restraints it is people carrying stock that can support retailers or go forward and the trade in general.
