Menswear firm moves towards profit in turnround strategy

The Bradford-based business, which was sold by administrators KPMG to one of China’s largest clothing retailers in January 2009, is now two thirds of the way through a turnaround strategy under a new management team, which will see it open a number of new stores and hopefully turn a loss of more than £5m into profit by 2013.

Until the banking crisis in 2008, Greenwoods had been a growing business but its cash position became increasingly difficult due to a reduction in credit terms from suppliers and the weakening pound, which made imports more expensive.

The decline in consumer spending led to a significant sales fall.

When it entered administration, Greenwoods was generating a turnover of £25.9m.

The Bosideng group, which had paid £50m to buy a 50 per cent stake in the business from the family-owned Hanson Partnership in October 2008, came to the rescue and set about turning the business around.

In 2009, Greenwoods operated 92 stores throughout the UK, selling suits, shirts, ties and accessories and offering a wedding wear hire service.

Under new owner, Pacific Trend Investments, which is part of Harvest Fancy Hong Kong, a subsidiary of Bosideng, the company now has 85 stores, including 14 in Yorkshire, and plans to add up to 10 new stores in the next 12 months. It employs about 500 staff.

Its turnover has grown to £30m in 2011/12. Like-for-like sales for the year to the end of March are expected to be up about five or six per cent and it expects to have reduced its loss.

Turnover is predicted to grow by 10 per cent in the next year through new store openings and up to two per cent through like-for-like growth.

Chief operating officer Neil Roberts said: “It’s common knowledge that the high street’s not having a tremendous time at the moment but we’ve done significantly better than the previous year.”

Mr Roberts joined Greenwoods in November 2009 and is one of a number of new senior managers and directors.

“We started to look at the business very closely,” he said. “We put a new team together and the new owners asked us to come up with a three-year plan. I’m pleased to say we’re on course for that three-year plan.”

As well as returning the company to profit, the plan involves expanding the business through e-commerce and opening new stores further south.

The firm’s hire wear business, called 1860, is doing particularly well, hiring out more than 120,000 outfits a year. “Not that many people know that we’re number two to Moss Bros,” said Mr Roberts. “We’re seeing that part of the business grow at a very fast pace.”

In addition it is opening up bigger stores in new towns and cities. Greenwood hopes these new stores will generate the £3m needed to refurbish the group’s entire network.

One of its newest stores is in Rotherham. “We do well in gritty heartland towns,” he said. “If you read the Press, you wouldn’t touch Rotherham with a barge pole but we know that demographic is right for our customers and since we opened in December it has outshone our expectations.”

Greenwoods, which traditionally caters for men over the age of 45, is attempting the tricky balance of trying to attract younger customers without alienating its core market. It plans to reorganise its stores and add new ranges to its collection to appeal to younger customers.

It is also considering selling other brands in its stores and could eventually open department store concessions. “We don’t want to lose our cash cow, which is our core customer, by overnight becoming a Topshop,” said Mr Roberts. “But by the same token, today’s middle-aged man is becoming more fashionable so he needs to have that in the collection.”

Online sales have increased fourfold to £250,000 since November, driven by its Mansize range, which caters for larger men.

Greenwoods has also invested over £400,000 in new Electronic Point of Sale technology across its stores. It has also started selling shoes, selling £750,000 worth in the last year.

Looking to the future, Mr Roberts said the economy and rising manufacturing costs in the Far East were the company’s main challenges. But he said the company was better placed to deal with problems it might face by being a more democratic company under the new ownership. “The major difference is that we’re now a business that shares everything, we have got experts in their own field and we empower people to get on and do their job,” he said.

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