In 1976, a young fashion designer stood on the doorstep of his newly opened – empty – shop on Floral Street in London’s Covent Garden and shouted: “Is anybody out there?”
Opening there at that time was a huge gamble – it was not the busy tourist and retail hub that it has become today. But Paul Smith decided it was worth the risk.
And he was right. Today, Paul Smith has 24 company-owned shops internationally and 200 licensed stores and concessions in Japan and sells through more than 1,900 doors in 35 countries. In the year to June 30, the business made sales of£117.2 million and pre-tax profits of£13.4 million.
And the man himself has become an international icon, not just for his creative and quirky shops and designs, but for his humour and enigmatic persona.
Once an aspiring racing cyclist, he had his early ambitions dashed at 17 when an accident left him in hospital for six months. Smith – whose subsequent success has earned him a knighthood – was introduced to the world of art and rock and roll by some of the people he met in hospital. Inspired by those creative characters, Smith ended up throwing himself into fashion and design and went on to build one of Britain’s most unique brands.
He opened his first shop in Nottingham in 1970 with Pauline Denyer, now his wife. Struggling to begin with, he supplemented his income by freelancing as a stylist and colourist. As his retail prowess began to pay off and he moved into international markets, Smith never regarded his trading locations as being just shops – it was also about a feel.
“When we opened on Fifth Avenue in New York, our neighbours were Chinese laundries and restaurants and we used the building as a wholesale showroom and a press office as well as a shop,” he recalls. Now the shop has neighbours including Armani and a raft of posh New York eateries.
Whether Smith has a knack for spotting up-and-coming localities before they develop, or whether he has helped raise the profile of certain streets, is very much a chicken and egg question.
Hidden places
Of the company-owned stores, the entrepreneur says he never goes for obvious locations. “I have a list of cities where we have real estate people looking for interesting buildings or premises for us. We almost always say no,” he says.
Smith describes the drive to find unique retail spaces as an “internal challenge” to himself. He explains: “Lots of others are like sheep and they often lose money because of this. We open more unusual shops, such as the bright-pink LA store and the shop in Milan we found at the corner of an old piazza.”
The distinct culture of Smith’s business is what he believes has helped his success over the years. “We are not a typical corporate clothing company. We loathe corporate attitude and expression. Yes, we expand. Yes, we do very well and yes we are profitable. But we are also very laid-back, which I think is unusual in today’s world,” he says.
At Smith’s head office in London’s West End there is no sniff of a stiff corporate environment. Smith’s office heaves with a disorganised array of books, toys, art and unusual or humorous knick-knacks that he has collected from around the world.
The business also has a flat management structure. “We have a down-to-earth approach so anyone can come and see me,” he says. “I am always walking round the building – it is very relaxed here.”
Asked if there have been any significant staff changes recently, he replies that people tend to stay for a long time. “I can’t bloody get rid of them, can I?” he quips, jokingly pointing to a nearby staff member.
At 62, Smith insists he has no plans to retire or sell up – and his energy would put many people 20 years younger to shame. But he is keen that whoever does succeed him continues to run the business with the same attitude.
“The culture of the company is very much on my shoulders, which is fine while I am healthy and leaping around, but it is also about training people up who have been with me for many years,” he says.
Smith is also very hands-on. “Too much so really, but if you love what you do then it is not like work,” he says. He can often be found working in his shop in Notting Hill, near where he lives and regularly puts in a few hours at his Covent Garden and Tokyo stores.
Keeping that style of management has been hard as the company has grown – it now has almost 1,000 on its wage bill. “Twice a year, we fly everyone to Paris for the fashion shows and I talk to them about what we are doing and the importance of our approach. And being well-mannered and not arrogant,” he says.
Smith loves to make his shops more than simple stores. “Last night at the Covent Garden shop, we had Paul Weller launching his new CD and book,” he says, by way of example. “Last week, we had a 10-year anniversary party at our Notting Hill shop and we just put on a huge fashion show in the St Petersburg shop we recently opened.” This effort to keep the brand interesting and relevant is what Smith believes makes his business stand out from the rest.
The brand has become synonymous with artists, film and rock stars old and new. Smith has dressed everyone from David Bowie and Mick Jagger to newer acts such as Franz Ferdinand and Kaiser Chiefs. And Daniel Day Lewis wore Paul Smith when he collected his Academy Award at this year’s Oscars.
Learning the trade mostly from traditional English tailors and shirt-makers, Smith describes his designs as very British with a sense of humour.
That kind of fun and originality is, he believes, absent from much of the UK high street today and Smith thinks that that trend has been driven by the low-cost fashion culture
“30 years ago, only Marks & Spencer did it. Even though other countries now do it, with the likes of H&M and Zara, it was a culture very much born here,” he observes. “The Brits like to buy new clothes every week or month, even if the quality is not as good. The French or Italians will buy a good-quality suit, for example and freshen it up with a new shirt or tie.
“I am not saying that either is bad but, in Britain particularly, the high streets across the country now all look the same and have become very bland and predictable.”
He is highly critical of UK landlords. “It is so sad – landlords are charging more and more. Shopkeepers with character and independence are shutting,” he says. “It’s not just in fashion, but those great cheese shops or bakers that just can’t afford to be there.” However, he does sing the praises of many British multiple retailers, lauding the models of River Island, Topshop and Jigsaw in particular.
Smith has so far not seen any evidence of the credit crunch affecting his bottom line. Current trading in the UK shops is up 6 per cent and sales for this year are expected to be ahead by more than 10 per cent.
It is Smith’s international business, however, that has proved one of his biggest successes. Smith first opened licensed shops in Japan with C Itoh in 1984, at a time there was an influx of designers to the country. “Some people only went out there two or three times and, at first, business went like a rocket, but then disappeared,” he says. “I have been there over 80 times and really embraced the culture and they like that.”
Now that there are hundreds of outlets that sell Paul Smith across Japan, and Smith is mobbed for photographs and autographs every time he goes there.
Spending just five months a year in the UK, building a strong alliance with international partners and infiltrating new markets is a key priority for Smith. “It is like a relationship; you have to really work on it,” he says.
This year, a Paul Smith shop will open in Antwerp and another will open in San Francisco next year. “If it feels right, I do it,” says Smith. “It is all about the tummy. I do want to keep momentum in the company, but there is no big financial push. The more natural approach that we take is more appealing to people.”
His advice to those starting out in retail is to always take a unique approach. “You need to find a point or a reason to it,” he argues. “Perhaps you will focus on one design element or perhaps your shop is in a cave. Whatever – it needs great character.”
Great character is the strength of everything that Smith does, be it his designs, shops or how he behaves with colleagues and customers. And he does this while remaining realistic and gracious.
“The thing is, I never ever forget who pays the wages and that is the customer. Lots of retailers keep a distance to this reality.”
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