N. PEAL EXPANDS RETAIL NETWORK
Byline: James Fallon
LONDON — N. Peal, a retailer known for its cashmere, will open its fourth store in the U.S. as part of a renewed drive in the American market.
The company, based here, will launch a franchised store of some 700 square feet in Seattle at the end of this week. Its other U.S. units are in New York, San Francisco and Beaver Creek, Colo.
Mark Blair, managing director, said N. Peal now is eyeing Chicago for a store that would bow next year. The Chicago store also would be a franchise. N. Peal is on the hunt for franchising opportunities in other U.S. cities.
N. Peal also has two stores in London’s Burlington Arcade, an 800-square-foot store selling women’s knitwear and a slightly smaller unit devoted to men’s knitwear.
It also wholesales to retailers in the U.K., including Harrods, and in Japan and South Korea.
Overall, N. Peal has retail sales of about $17 million a year, Blair said, adding that sales are growing by about $4 million annually because of the new store openings.
About 60 percent of sales are through the company’s retail stores and the remainder is wholesale. There also is a small mail-order and transactional Internet business.
“The recognition of our brand in the U.S. is extremely high and there is plenty of room for expansion there,” Blair said. “We’ve had an amazing return from our Beaver Creek store, which opened in March 1998. Both partners got their initial investment back in six months and sales have continued to grow. It shows there is a demand for N. Peal in these cities.
“But we aren’t driven toward a particular number of stores in America,” he added. “We want to do it right and step by step. The reason we’re going the franchise route is that from a management and resource point of view, we are buying into other people’s expertise and their knowledge of their local markets.”
The new focus on the U.S. follows a period of retrenchment at N. Peal following overaggressive expansion in the early Nineties.
The company opened stores in London’s Piccadilly and Knightsbridge as well as a shop-in-store in Harvey Nichols, giving it five units in London. It also signed a deal with Saks Fifth Avenue to open shops-in-shops in the U.S., but N. Peal’s sales failed to keep up with the expansion, and the company struggled with profitability.
Over the last two years N. Peal has closed two of its stores and pulled out of Harvey Nichols. It has refitted its remaining stores and also has revamped its advertising to reinforce its image as a designer brand.
“We have had a designer for 12 years, Gillian Hunter-October, who is one of the best knitwear designers around,” Blair said. “But we found many consumers still thought of us as simply a traditional cashmere retailer selling mainly other labels rather than our own. So we have focused our advertising more on the key fashion looks of the season and it’s had a huge impact. We’ve seen sales of the more fitted, trendy pieces take off and sales of the less fitted designs fall away.”
For spring 2000, the look is even more advanced with cropped tops, camisoles and cropped cardigans in pastel shades, or hand-knit cardigans with loose cable weaves or beading. In addition to cashmere, there are styles in a 65 percent cashmere/35 percent silk blend.
N. Peal has its own factory in Scotland, although Blair said it is considering sourcing more overseas as it increases the amount of non-cashmere or cashmere blends in its collections.
He’s optimistic about the future for the brand, despite the sea of cashmere knitwear available from designers worldwide. In his view, the growth of the cashmere market has been spurred by the low prices of raw cashmere.
However, prices have climbed steeply in the last few months and there is talk of allocation of supply. Blair believes this will cause many retailers and designers to drop out of cashmere, once again leaving it up to specialists like N. Peal.
“Not too long ago N. Peal was overstocked and had too many stores,” he said. “We crunched it back and are now rolling it out again, but from a base that is highly profitable. The brand has been around since 1935 and we believe there is lots of growth ahead.”