While many larger high street fashion brands have found themselves in rough water this year, Seasalt is plain sailing. Retail Week looks at what the fashion retailer is doing right and where it might turn next.
Few could argue that the storm which overtook the UK retail sector last year has only grown fiercer in 2019. The headwinds that have blown the UK retail sector collectively off-course have been particularly damaging to some of the largest fashion retailers.
This year alone, former high street fashion titans and household names such as Arcadia, Monsoon Accessorize, Jack Wills, Select and LK Bennett all ended up in some form of insolvency process – be that company voluntary arrangement or an administration.
Yet, while so many chains founder, smaller Cornish brand Seasalt seems to continue on its course.
Its most recent financial results for the year ending February 2, 2019 marked the tenth year of 20%-plus year-on-year sales growth. Turnover was up 29% to £66m on the prior year.
Seasalt’s EBITDA soared 51% to £7m, while its gross profit margin improved to 57%, from 55% the previous year.
It also reported operating profits of £2.1m, and profit before tax of £2.5m – a fivefold increase on the previous year.
While Seasalt appears to be enjoying continued success, its plans for expansion show no signs of slowing. Could it be steering into some of the same impassible straits that have scuppered other ambitious retailers in the past?
Structurally sound
Seasalt prides itself on its Cornish heritage and inspired design and remains a family-owned and operated business.
The womenswear and lifestyle retailer was founded in 1981 after Don Chadwick bought a shop in Penzance, Cornwall. After Don died in 2001, his three sons David, Neil and Leigh created the clothing brand. All three remain shareholders, while both Leigh and Neil retain board positions. Neil’s wife Sophie still designs most of the prints.
Chief executive Paul Hayes, who became the first non-family member to take the helm of the retailer in 2013, says being family owned has allowed for Seasalt to take a slow and steady approach to growth, which sets it apart from retailers that have to expand at the rate that outside investors demand.
“As a business we have always taken a long-term view of investment in order to support sustainable growth”
Paul Hayes, Seasalt
“As a business, we have always taken a long-term view of investment in order to support sustainable growth. We began investing in our business infrastructure years ago to ensure that as the business expanded, we could offer our customers a high-quality multichannel offering,” he says.
“Whether it be online or in-store, we’ve made sure that these experiences are special and personal.”
The retailer plans to keep its offer personal while it expands range from everything to the practical to the more peculiar.
The retailer has invested in allowing shoppers to order items in-store – such as while on holiday in Penzance – and have that order fulfilled at their local branch, as well as offering home delivery for purchases made online or in-store.
It also brings the sounds of the coast to new store openings, with Cornish singers performing sea shanties to lure customers.
Online had a year of strong growth for Seasalt, with ecommerce sales soaring 35% and the number of active customers growing by 21%.
Despite its ecommerce success, Hayes says Seasalt is also looking at stores as a key part of its careful and considered growth model. It opened 10 stores over the last financial year, with plans for a further eight in the UK and Ireland over the next, with to operate up to 100 stores in the next few years.
“Upholding the values of good shopkeeping is part of Seasalt’s DNA and will always play a key role in our business and our offering,” says Hayes. “We currently have 68 stores across the UK and Ireland” – with plans to open another branch in Edinburgh this month.
Hayes stresses “it has never been about how many stores we have, but about the right stores in the right locations”.
However, retail analyst Richard Hyman has his reservations about the speed at which Seasalt is growing its store estate.
“One slight cautionary observation I’d make is they are opening a lot of stores, relative to the size of the business. I would say, beware landlords offering great deals,” says Hyman. ”All of the leases of the new stores will fall on the bottom line and, in two years’ time or so, you may find yourself in trouble.
“If I was advising them, I’d say there’s no hurry. This is going to be a buyer’s market, in terms of taking real estate. For years I’d say. I don’t think they should be in a hurry to do anything.”
New horizons and distant shores
While international sales weren’t highlighted in the most recent set of financial figures, it has established a lucrative wholesale business. It currently has around 400 stockists, with over 100 suppliers in Germany, and plans to launch a wholesale and digital offer in the US next year.
The brand already sells its clothes online in 200 countries and has recently re-platformed its website to improve functionality for its customers both in the UK and overseas.
However, while its international offer goes from strength to strength, Hayes says the brand remains entirely focused on its Cornish roots.
“Our Cornish heritage offers us a constant source of inspiration and is integral to our brand identity. We know it’s important to our customers, and one of the key reasons they choose us,” says Hayes.
“Everything is still designed from our head office in Falmouth, and therefore Cornwall runs through everything we do – whether it’s the Cornish-inspired prints on our best-selling products, or the work of Cornish-based designer Tom Raffield, who creates our lighting fixtures for our stores.”
Seasalt also recently launched its Easy On collection. Designed in collaboration with customers, the collection is designed for those less-abled people who may find dressing difficult.
By taking a range of popular styles and adding “subtle details and tweaks to make our collection more inclusive”, Hayes says Seasalt has received lots of positive feedback as well as driven sales. This builds on the brand’s strong track record in inclusive ranges, having launched its plus extension range in December 2016 and a petite range in November 2018.
Plus-range sales have since increased by nearly 300% and the majority of its store estate offers the full Seasalt size ranges between 6 and 28.
When asked what Seasalt will look to do to maintain its momentum, Hayes says: “We want to continue to inspire women of all ages and shapes to dress with creativity and confidence. In our eyes, our growth has only just begun.”
While so many around falter, Hayes is confident that the retailer will continue to sail smoothly in fashion’s stormy waters.
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