Everyone in the world of retailing and brands is worried. Almost daily, news reaches us of some new bankruptcy – in the UK, Toys R Us, BHS, Jaeger, Austin Reed, HMV, Maplin, Joe Bloggs, MultiYork, East, Agent Provocateur and Brantano have all gone under. In the US, over 300 retailers have gone bankrupt recently, including major names like Sports Authority, Claire’s, Quiksilver, Aeropostale, Bebe, Nine West, Gymboree, Payless and BCBG, Wet Seal and The Limited. And as the retail doors close, the branded suppliers are seeing their distribution dry up before their eyes. Amazon.com is chewing up market after market – they have a colossal 43% of the US online market, and that market is growing rapidly every year. Behind them are a host of other hungry ecom attack dogs, nipping away at the frightened retailers heels. And the problem is much broader than just ecommerce, deeper changes are at work in society, with technology, demographics and public policy all combining to change the balance of power between producers and consumers and erode brand premiums. It is truly a Jungle out there!

The purpose of MarkPilkington.net Ltd is to help brands navigate through this jungle. Mark Pilkington has over thirty years’ experience in successful brand building across the branded consumer, retailing and ecommerce sectors. He is also an economic history expert, who has conducted extensive research into the long term trends which are driving the market. The good news is that he has identified some intelligent and actionable solutions. It is absolutely possible for retailers and brand owners to reengineer their brands and business models to succeed and grow in this new world. There are eight key areas that must be addressed:

1. Business process simplification to achieve the necessary speed of change
2. Going with the flow of ecommerce rather than fighting it
3. Cannibalising your own stores business before someone else does
4. Rationalising and reinventing the retail portfolio, so as to change its role in a larger overall business
5. Reinventing the brand to make it relevant to the new generation of consumers
6. Collapsing the supply chain to get to the right pricing level
7. Redefining the relationship with customers to bring them into the company rather than just selling to them
8. Changing the culture of the business to a looser, more experimental model

These policies need to be implemented fast, because there is not much time. Retail is an asset-heavy business, and it doesn’t take much of a loss of ‘top-slice’ sales, before a substantial part of the network becomes unprofitable. Then the company will slide into a nightmarish cycle of store closures, balance sheet destroying write-offs, layoffs and morale collapse, supply chain contraction, and pretty soon onwards down the slippery slope of supplier loss-of-confidence, Creditor Voluntary Arrangements and finally oblivion. To use another analogy, retail is like the Titanic – it still looks good on the outside, but it is holed below the waterline. The ice berg struck at 4 am, and nothing appeared to happen at first. Well it’s now 2pm, and the band is still playing, but the ship is slowly filling with water. By 4.30pm, 90% of the passengers are going to drown. You are the captain of your retail ship, so what are you going to do? Take action while there is still time!

Mark Pilkington was born in the UK, and educated at Oxford and INSEAD.

Courtaulds PLC

After INSEAD, Mark joined Courtaulds PLC, a FTSE 100 corporation, where he became CEO of Gossard, a lingerie brand. Mark developed the Wonderbra - the ultimate push up bra - creating a media storm in Europe and the US. He partnered with many celebrities and got blanket coverage on major networks like CNN, NBC and Fox, such that the Wonderbra became the top selling bra in the world. He also created a high technology sports bra called Shock Absorber, and persuaded Victoria’s Secret to stock it – the first sports bra in their history. For the launch on Amazon.com, he obtained major media coverage by organizing a tennis match between Jeff Bezos and Anna Kournikova (the tennis star, who was the face of Shock Absorber). As a result, Gossard grew exponentially, and Mark won two Queen’s Awards for Exports, and was honoured with the prestigious Council of Fashion Designers of America Award for his launch of The Wonderbra.
$ While at Courtaulds, Mark was also Director General of Georges Rech, a French fashion house, which he turned around by overhauling its operations.

Splendour.com

After leaving Courtaulds, Mark founded Splendour.com, the world’s first direct-to-consumer internet brand. This business model effectively stripped all the costs out of the supply chain by designing all the products in-house and shipping them direct from low cost production facilities to the consumer via a website. Mark obtained investment from Marks and Spencer Ventures, and carried out a major launch in 2000. He worked with an array of celebrity fans, and also launched the innovative Frontless Bra, which was worn by major pop groups. Splendour.com prospered and was acquired by a UK publicly-listed company in 2006.

The Kamal Osman Jamjoom Group

In 2008, Mark became CEO of Kamal Osman Jamjoom Group, a privately-held retail company based in Dubai, where he pioneered the idea of home-grown brands in the Middle East. Mark developed the Nayomi lingerie brand, with luxurious new Princess Palace superstores, supported by major fashion shows and famous Arabic celebrities Once again, this created a media storm which catapulted Nayomi into the number one position in the MENA region. He also created Mihyar - a modern department store aimed at the Arabic man, which became the leader in its segment. Mark launched Nayomi Moda, which has created a fashion sensation in the abaya market. Lastly, he developed a luxury beauty salon business and a new educational toy store concept, both of which were very successful. As a result he was able to build up the group to nearly 1,000 stores across the MENA region.

MarkPilkington.net

Currently Mark is a Director of MarkPilkington.net, a consultancy which advises retailers about how to adapt to changing circumstances in the industry. He has developed a strong network with clients in Europe, the US and the Middle and Far East, and is in great demand as a speaker at retail and ecommerce conferences. He is currently working with U-Mark, a Saudi company with businesses in sports retailing and household electronics. Mark is the author of “Sorry we’re closed - Why your High Street is Closing Down! And how to bring it back to Life!’ In this book, he has distilled all of his academic knowledge and his years of practical experience in branding, retail and ecommerce, and the result is a work which analyses the current crisis in retailing and offers coherent and actionable strategies for survival.

The High Street, as we know it, is going under.

It is not a sudden crisis, like a stock market crash, because that is not the way retailing works. But day after day the news just keeps on getting worse and worse. Nearly 8,000 stores closed their doors in 2017 in the US alone. To give some perspective to these numbers, the previous worst year – 2008 – only saw 6,000 closures, and this was at the height of the Great Recession. In the UK, almost 2,000 stores closed in the same period. These store closures have not been limited to weak brands, as in the past: some of the brands which have been affected include some of the most powerful brands in world, like Polo Ralph Lauren, Victoria’s Secret and Marks and Spencer. Overall, about 90% of US retailers have experienced sales declines! All round the world, the retail industry is in trouble. The problem is not limited to the UK and the US. Retailers are struggling and going bankrupt across Europe, Russia, the Middle East and the Far East. Retailing in the UK employs 5 million people directly and another 5 million depend on it as suppliers and other counterparties. In the US it employs 15 million people directly and another 10 million jobs depend on it. This is almost 25% of the working population! As the retail decline picks up momentum, it is going to cause a major rise in unemployment to the extent that it is going to threaten the whole economy. Government policy seems designed to hasten the decline - whether it be the impact of Brexit, the restrictions on immigration, the National Living Wage, the high business rates, the apprenticeship levy or the fact that many internet companies are permitted to avoid the taxes that retailers pay.

So what can we do to stop the retail collapse?

Unfortunately there seems to be a lack of understanding of the problem - the causes of the retail apocalypse are multiple and complex. People blame it on ecommerce, and it is true that this is part of the story. Yet there are many other causes, including the information revolution, generational changes, unscrupulous venture capitalists and self-inflicted wounds from the retailers themselves. Fortunately solutions do exist. There are things that governments, brands and retailers can do to avoid the worst of the crisis. This is what this book is about. It takes a long hard look at the crisis and its causes, and then it attempts to lay out some real solutions. In writing it, Mark Pilkington has drawn not only on his academic background in economic history and research into future business models, but in his 30 years’ practical experience in consumer brands, retailing and ecommerce. The result is a set of highly implementable recommendations, which, if followed will provide a route map for survival. He recommends implementation of an eight point action plan, including things like business process simplification to achieve the necessary speed of change, going with the flow of ecommerce rather than fighting it, cannibalising your own stores business before someone else does and reinventing the retail portfolio, so as to change its role in a larger overall business.

A must read

These are simple, actionable points, which if implemented should enable a business to survive the coming Tsunami, making “Sorry we’re Closed” a must read for anyone who cares about the future of retailing.

Over the last few months he has spoken at the following events:

• Retail Leaders Circle MENA, Dubai, 6-7 March 2017 - 500 delegates
• World Retail Congress, Dubai, 4-8 April 2017 - 1,500 delegates
• Seamless Middle East, Dubai, 1-2 May 2017 - 10,000 delegates
• ArabNet Digital Summit, Dubai 16-17 May - 1,500 delegates
• Cityscape Global, Dubai, 11-13 September 2017 - 1,500 delegates
• RECon MENA - Dubai, 29-31 October 2017 - 2,000 delegates
• Retail Masterclass - Dubai, 7 November 2017 - 400 delegates
• Middle East Retail Forum, 27-28 November 2017 - 1,000 delegates
• Seamless Middle East, Dubai, 15-16 April 2018, 10,000 delegates

One Year Brand Creation (Y1BC)

Companies are often nervous about the cost and time scale for new brand creation, and often end up acquiring existing brands instead. However Mark has a highly efficient methodology for developing a new brand.

• Gap analysis, brand positioning and brand personality
• Target customer
• Marketing strategy
• Marketing mix – the 4 PS – product, price, promotion and place (or distribution)
• Timetable (critical path)
• Budget and financials

Mark has managed to compress this process into less than a year, due to the fact that he has honed every step through years of practice.

Direct to Consumer (DTC)

Mark was one of the pioneers of the DTC movement, long before Warby Parker, Bonabos and Everlane were thought of. DTC brings brand product design in house (as above), and cuts out virtually every other cost, shipping product direct from low cost factory gate to consumers via only a website. It is the shortest, lowest cost supply chain in the world, and it will be the model of the future (note that Amazon are doing this with their private label, and it is a big part of Ali Baba’s success. Mark can put together a DTC brand in the same one year timeframe as a new retail brand.

Team Evaluation and Action (TEA)

Mark has developed a simple (though time-consuming) practice of meeting, learning about and getting ideas from, everybody in the office, plus a large group of senior sales people. This has proven so motivating and also insightful in his own companies, that he now offers it as a consulting product. The truth is that a lot of senior managers do not know all of their people very well, and therefore rely on the judgment of others.

Inventory and Supply Chain Action Response (ISCAR)

Most inventory planning systems are very poor quality. They are built by IT people, and imposed on planners by senior managers who want a quick fix, because they have no desire to wade through the planners’ endless spreadsheets. As a result the stocks of most businesses go from feast to famine and back to feast again. With individual product buys not really tied into any rational system, opportunities arise for buyer/supplier fraud, so the whole process is not very happy. Mark Pilkington is one of a few managers who have really engaged with the planning process, and he has built a proprietary system, which is highly transparent to senior management. It only has three spreadsheets, so avoids unnecessary complexity. The system flows seamlessly from group to brand to category to SKU and finally to store, tying everything into the group budget, to avoid overspends.