A former high street competitor of Pia – which last week closed 14 stores and indicated it is moving online – has said he is not surprised by the decision given the “slim” margins on offer today and growing cost pressure on overheads.
Ian Middleton, director of Argenteus, shifted to an online model four years ago after high rents and rates set against weakening sales led to an unsustainable situation. He says the “homogenisation” of the industry also left little space to differentiate and sees parallels between Pia’s situation and the challenges his own business faced.
“Pia’s closure of their high street stores doesn’t surprise me in the least,” shares Middleton with Professional Jeweller. “A cursory look at their company accounts shows a very slim profit margin which I think was driven by them needing to sell on the high street at the same very keen prices as in their catalogues. Not really something that’s sustainable and one of the reasons many retailers find it difficult to compete online as well as running physical stores.”
“As one of our competitors on the high street I could never really understand how they could keep trading in physical retail on that basis, especially considering the number of stores they had and the locations they were in. With rents, rates and other physical overheads always increasing, you need to squeeze every ounce of profit out of each sale and declining footfalls and downward pricing pressures began to make that impossible for us,” adds Middleton.
When Argenteus closed its store doors in 2014, the business organised a controlled shut down and sales of its boutiques, which ensured suppliers, staff and landlords all got paid in the end.
According to Middleton, this organised withdrawal from the high street enabled Argenteus to continue trading online under the same company structure, maintaining long held relationships with suppliers and customers.
“It’ll be interesting to see if they [Pia] continue to survive online, although I note they don’t seem to have been particularly forthright with their customers about the demise of their stores,” says Middleton. “I’ve not found anything on their website or social media channels fully explaining the situation. In our case we felt it was important to be as up front with our customers and suppliers as possible. As a campaigner for independent retail I was also very keen not to ‘airbrush out’ the realities of the high street proposition for retailers in what is an increasingly challenging climate.”