In a room full of fashion industry executives, it’s hard to make a hit with a $70 outfit.
But that’s exactly what Andy Bond did, standing aside from the podium to point out that his shoes, socks, underwear, shirt, tie, jacket and pants totaled that relatively small amount. What better way than that to illustrate the fashion democracy created by George?
"Everything for everybody. Customers can have it all," Bond, managing director of Asda’s George fashion brand in the U.K., proclaimed during his keynote address, which left industry executives both laughing in wonderment and concerned. For Asda has a powerful parent — Wal-Mart Stores bought the British supermarket chain in 1998 and is rolling George out in the U.S. It raises the prospect that the George label, which already has sales of $1.6 billion a year, could become the world’s biggest apparel brand in the future.
Responding to a string of questions about Wal-Mart’s strategy for George, Bond said the price architecture of the brand in the U.S. and England is "roughly the same. But you can’t say it will be exactly the same because of the currency fluctuations." The idea, he said, is to have a consistent offering for the global masses, meaning "the same values, so the products will be roughly the same price."
"In the U.S., George will represent an element of the overall target market. What target that is, is evolving right now," Bond explained.
While George is just getting its feet at Wal-Mart, George in the U.K. has a sure niche. It represents "affordable fashion and a phenomenal combination of design, quality and price, and that clearly can be layered on to the offering in Wal-Mart stores," Bond said. While George is the only apparel label sold at Asda, George will have to "coexist at Wal-Mart with other apparel offerings." George offers "another incremental opportunity for Wal-Mart."
According to Bond, the George team in England will be working in tandem with the Wal-Mart product development team in the U.S., led by Claire Watts. "It will be a joint effort, and over time, the U.K. business will essentially be a global center of excellence that passes on design knowledge and product onto the [Wal-Mart] design teams around the world," Bond said."Becoming part of Wal-Mart has opened up a huge opportunity for us. We now sell our George basic jeans for under $9, exclusive of taxes, under half of what we sold it for before we were acquired. And this is all about the opportunities of global sourcing. We are now buying fabric at up to 60 percent cheaper than we used to, and components at 15 percent less. All this, together with greater efficiencies in our supply chain, means that in the last 12 months alone, our average selling price has dropped by over 20 percent. That’s across all of our ranges."
In addition to growing at Wal-Mart, George will grow in volume in the U.K. since Asda, Britain’s third-largest food retailer, has plans to open 30 to 40 stores over the next three years. The stores range from 25,000 to 100,000 square feet in size and average 45,000 square feet, with 60 percent of the space devoted to food. George represents 15 percent of the square footage. Through "clever fixturing and merchandising," George has been able to display more products in the same space, Bond said. High costs of real estate in the U.K. make it difficult to actually increase the square footage, but George needs it, because of recent incursions into such categories as large sizes, petites, tweens, teens, and maternitywear.
As Bond sees it, George is changing how fashion works. He leads a team of more than 300 people that manage the whole business, from the supply chain to all the retail and marketing activities. He said George is the number-one kids’ wear retailer in England.
"Perhaps the most significant thing about the brand is that it has consistently challenged and broken the rules about fashion, and redefined the U.K. marketplace," Bond said. "Initially, this was by challenging the idea that good value and well-designed clothes can only be bought in High Street specialty stores. Our philosophy is founded on the belief that the customer is at the heart of our business, that companies should be idea-led and consumer-led. Our businesses need to create great ideas, but also need to have an intimate knowledge of the customer. Retailers tend to be good at understanding and thinking about customers, and product companies tend to be good about ideas."One principle George is guided by is the "push-pull" theory, meaning that pushing products that customers want is just as important as pulling products through the pipeline faster. "Much of the new language in our industry is about shortening lead times so we can put products in our stores more quickly. It’s a powerful approach, but for me, it’s only half of the opportunity. We’ve got to up the concept of pulling as well as pushing our merchandise that we believe customers will want. We’ve got to pull on their views and make sure we reflect these in our ranges, so what do we do? It’s simple. We’ve got to listen all of the time…. We’d be crazy not to listen to [customers]."
Another guiding principle: avoiding the ivory tower syndrome. "All the colleagues that work with me at George all work on the shop floor. I can’t think of a better way of getting closer to our customers and our colleagues."
By keeping an open ear, the company was encouraged to expand the offerings. "We used to sell swimwear for only four months, and then we got enormous feedback from the colleagues in our stores and the customers" who wanted swimwear all year round. "Now we sell more swimwear in the winter than in the summer, and any of you who have been to Britain will know that’s a phenomenal feat with the weather that we have."
He also said that George is working hard to get Asda’s grocery shoppers to buy George apparel as well. "There are 11 million customers that walk through an Asda door every week to buy food," Bond observed. "Most of those shoppers come in to buy food twice a week, so I have a captive audience and my job is simply to convert them to buying clothes. We still have a way to go, although we have tripled the number of loyal Asda shoppers that are buying George every week. It’s still only 30 percent of those customers who are buying George. So you can imagine what a huge challenge I’ve got. But what a huge opportunity as well."
George also is constantly striving to raise its fashion quotient. It launched its first fashion collection in the U.K. in April, moving from concept to shop floor in less than seven weeks, Bond said. "It’s been a phenomenal success, so much so that we are tripling the space in stores."Our challenge is to have an offer that excites customers all year round and gives them what they want when they need it, whether that’s swimwear in January or lightweight dresses and skirts in a balmy October," Bond said. "Large women told us they wanted our fashion ranges, not dowdy alternatives that are supposed to make them feel better, even though the clothes looked awful. All our women ranges go up to U.S. size 16, and many up to U.S. size 20 and there is no price premium. The result of all this: our largest sizes now take well over 10 percent of our ladies wear sales.
"Customers know they can have everything — value, style, quality, convenience and great service," he added. "And if you don’t give it to them, someone else will…. The winners in our industry will be ones that play by new rules."
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