On Pandora, shop refurbishment and the secret to 125 years of success.
TH Baker celebrates its 125th anniversary this year with business already up 20% on 2012, and last year’s turnover five times that of 2007. Kathryn Bishop meets co-director Phil Higgs to talk Pandora, new brands and the future of the family business.
It is a sunny spring day in Horsham, West Sussex, and the high street is busy with shoppers, two of which I tail into T H Baker’s store on the town’s West Street.
I am there to meet the retailer’s co-director Phil Higgs, who greets me with excited chatter about the retailer’s 125th anniversary, which it is celebrating in 2013.
This special anniversary represents a milestone for T H Baker, a business founded by Higgs’ great-great-grandfather Thomas Henry Baker. The original Mr Baker was a watchmaker and jeweller who set up shop in 1888 in Brierley Hill in the West Midlands, where T H Baker’s headquarters remain to this day. "It is an important selling point to say we’ve been going since 1888," states Higgs.
To help familiarise customers with the company’s history T H Baker is giving away £125,000-worth of jewellery and watches over the year – about £8,000 a month, with a larger giveaway in December. It is using this to tempt shoppers in to its stores each month to answer a single question in order to be entered into the draw.
Those stores in question include 11 T H Baker jewellery stores selling fine and branded product, and 10 Pandora franchise stores, which have opened at a rate of knots in recent years.
T H Baker is already reaping the benefits of this dual-sided business, becoming one of the UK industry’s most well-known bricks-and-mortar retailers and Pandora franchisees.
So how has business fared in the first quarter of 2013? "So far this year we’re between 15% and 20% up on last year, and last year was very strong," states Higgs. "All of [our jewellery sales] are relatively stable; diamond sales are up this year and our gold sales are up this year slightly. They’ve taken a hit in recent years but they’re on the up." He adds that the business’s recent turnover is five times that of 2007 and 2008.
Higgs says this growth is down to a combination of three things: the enduring strength of its Pandora sales, major refurbishment across its stores and the internet; the latter of which has helped to keep the business in rude health throughout the recession.
"We’ve got 10 people at least working on the website now and it is in development the whole time," Higgs explains. Part of this development is to drive traffic and interest to the T H Baker site, but also its online jewellery site The Jewel Hut, the once sister site of The Watch Hut, which T H Baker sold to watch retailer DM London for an undisclosed sum in 2011.
"I think we found the watch market online was getting more competitive," says Higgs. "DM London came along and made us an offer for The Watch Hut and we decided it was a good time to sell."
The sale brought a solid return that Higgs jokes he would liked to have spent on a company Bugatti Veyron but was instead reinvested back into T H Baker to help drive forward the company’s development.
"Since we have invested the money back into the business and have seen growth in other areas and turnover still rose in 2011 even though we’d sold The Watch Hut [and lost that revenue stream]," he explains.
These other areas include branded jewellery, which has become a large part of T H Baker’s offer and has allowed for the introduction of shop-in-shop units. At the Horsham store, for example, Hot Diamonds has a whole wall to itself, while Chamilia towers show off the brand’s stacking rings.
"You need more space nowadays to give the brands what they need," explains Higgs. "And we’ve seen sales go up massively since introducing furniture [to our stores]."
The brands that T H Baker sells vary from store to store but all sell Pandora, eight of the stores have Thomas Sabo and eight have Links of London. Higgs also comments on the growing success of zirconia jewellery brands Diamonfire and Crislu, both of which have been selling well in T H Baker stores, helping to fill the price bracket left open by the increased gold price.
"I think that’s why we’ve been successful," Higgs muses. "We’ve been prepared to move with the times and change. There are some people who are set in their ways, they won’t sell silver as fine jewellery for example, but I think those days have gone."
So does Higgs believe branded jewellery is the future, or are customers still faithful to classic styles? "We’ll always try new brands, often putting them in a store and see how they go before choosing to roll them out if they go well. But the next big thing like Pandora? I don’t think it’s going to happen."
There is little doubting Higgs’ confidence in Pandora and its market strength, and the brand has proved itself for the retailer. "Pandora is still going very well; everything is growing this year in terms of Pandora," Higgs explains. "The [franchise] stores are up and T H Baker’s Pandora sales are up as well. The collections have sharpened now, the price points are right and it’s selling. The rings are doing particularly well, they’ve been flying out."
Its Pandora stores sit in locations including Birmingham’s Bullring, Northampton, Telford and Worcester, while the T H Baker store in Merry Hill remains a strong location for Pandora sales. With such rapid expansion to date, strong branded sales and a big anniversary to celebrate this year, is now is the time to keep building T H Baker when business is strong?
"Yes, there are plans to open more stores, but perhaps not this year as we are relocating the T H Baker store in Brighton to a much larger unit," explains Higgs. He notes that a similar relocation in Shrewsbury has provided more room for branded shop-in-shop spaces and as a consequence an increase in sales.
The Brighton move will also mean more room for T H Baker’s fine jewellery collections – ruby rings are a popular choice this year – as well as basic unbranded jewellery in gold and silver, the latter of which Higgs says has increased in recent years as consumers begin to recognise the value of silver as a precious metal. "Shoppers see more of the value in silver jewellery than they used to and now people are prepared to spend £200 or £300 on a silver item," he says. "People’s attitudes have changed."
At present Phil Higgs and his brother Andrew are directors at T H Baker, each overseeing their own parts of the business – for example Andrew has more experience in the online realm as well as the legalities of new shop acquisitions – while their father Alan Higgs spends three days a week at the company’s headquarters in Brierley Hill.
So with 125 years under its belt and a portfolio teeming with shops, is there a next generation of Higgs ready to take on the jewellery business? "I have nephew and niece who are four and two, so they’re a bit young at the moment," Higgs laughs, who himself was a fresh-faced 21-year-old when he joined the company full time working in the stores. His older brother Andrew joined a year later after a stint at an accountancy firm, so a future group of Higgs at the helm might just be possible.
"I like the history side of it and that it is still a family business," Higgs says. "It’s about keeping on and moving everything with the times and that’s important when young people are our customers and [eventually] they will become the customers who buy diamonds and wedding rings."
He ponders this statement for a moment before smiling and surmising: "It’s been OK so far for T H Baker. I think we can get out of the recession and do even better."
Phil Higgs on…
Branded jewellery: "Personally I think it’s here to stay, without a doubt."
Opening new stores: "Either in the South or around the Midlands near our headquarters. We could look at Bristol or Bath, not somewhere too out of the way."
Silver as luxury: "Our offer in silver has increased in non-branded goods. People see more value in silver than they used to; attitudes have changed."
The Merry Hill store: "It’s our busiest store by a long way and does incredibly well. The queue at Christmas reached three doors down. I just wish I had a photo of it."
This feature was taken from the May issue of Professional Jeweller. To read the magazine in full online, click here.