Diversity can save you from a niche dead end

Straight-talking, common sense from the front line of management

Q There was recently a piece in The Telegraph about retail “chameleons”
that work out innovative ways to use their shops outside of usual hours,
like hiring them out as event spaces or hosting pop-ups. Would you ever do
that with larger Timpson’s stores?

A I read the article with interest and can only applaud anyone who can
find a way to pay their landlord only one rent but support more than one
business.

Some years ago I saw a remarkable shop that was a sandwich bar by day but
became an Indian takeaway at night. I was fascinated to watch their fascia
flick over at five o’clock from a British deli to the full Indian,
advertising prawn bhuna and chicken rogan josh.

That was one of the great ideas that I never managed to copy. It is difficult
for a cobbler to turn into a night-time coffee bar or for Snappy Snaps and
Max Spielmann to process photos by day and give Zumba classes at night.

In the 1980s when I learnt a lot about shops, the fashion was for niche
retailing: the stock market fell in love with companies like Body Shop, Sock
Shop and Tie Rack that specialised in fiercely focused product categories.

Experts talked about “category killers” that attacked the market with the
level of authority only a true specialist can achieve. Body Shop and Tie
Rack prospered but Sock Shop struggled once it discovered that fashion socks
and patterned tights only sell well for a short segment of the fashion cycle.

But Sock Shop lasted a lot longer than the ultimate niche retail business
which I spotted in Peterborough. The shop was called “Just Eggs” and
literally just sold eggs: big eggs, small ones, white, brown, free range but
no battery, hens, ducks and quails eggs with several cookery books that
concentrated on how to cook an egg. They opened at a bad time, three weeks
before Edwina Curry was caught up in the controversy about salmonella.

When the demand for shoe repairs started its steady decline (cheap imports and
fewer leather shoes have cut out 90pc of the shoe repair market since 1965)
our solution was to start cutting keys. That led us to realise the only way
a cobbler could survive was to do something else.

Over the years we have added engraving, watch repairs, dry cleaning, photo
processing and,

very recently, mobile phone repairs (mainly replacing cracked screens).

By going multi-service we have found a way of using the same premises to carry
out a number of different businesses in the same shop. The trick is to pick
people who can learn all those skills and also provide our customers with a
pleasant personal service. I prefer to let them concentrate on the day job
and, at night, keep the premises firmly closed.

Q Where do you stand on the interest rise debate. Is now the right time for
a rise?

A I was recently very generously awarded an honorary doctorate in law
by Nottingham University exactly 50 years after they gave me a 2.2 in
industrial economics.

During three years at Nottingham from 1961 to 1964 I learnt some psychology,
got to grips with Pavlov’s dog and understood a bit about Freud’s
interpretation of dreams. I also studied a bit of law gaining a basic
knowledge of contract law and unravelled some of the devilishly difficult
judgements delivered by Lord Denning.

The main part of my course, as its name implies, was the study of economics.
Anything to do with day-to-day business was easy: I quickly grasped the idea
of supply and demand and had no difficulty understanding economies of scale.
But anything to do with macro-economics was a mystery to me. I never
followed Keynes’s thinking and totally failed to understand the relationship
between interest rates, inflation, the balance of payments and the gross
national product.

So perhaps it’s a good thing I’m not on the Bank of England’s Monetary Policy
Committee.

Mind you, I do wonder whether all the expert economists really know what it is
all about either. If they are that good at economic modelling why didn’t
they forecast the mess we were in before 2008? Still, a lack of knowledge
doesn’t stop most financial pundits putting forward their pet theories and
it isn’t going to stop me.

I know that the current historically low interest rates don’t help those who
look to live off investment income but the past two years have certainly
provided a package that has stimulated the economy. We might not be beating
the rest of the world at football but it is great to be better than Germany
when it comes to economic growth. To create success a country needs economic
confidence and we seem to have found it.

Perhaps the biggest threat comes from those opposition politicians who try to
invent a crisis that doesn’t exist. Talk of a “living wage” or “cost of
living crisis” runs the risk of encouraging unrealistic wage demands, higher
inflation and breaking the current circle of confidence. Anyone who ran a
business in the 1970s will remember what havoc double-digit inflation can
cause.

I am not qualified to make a decision on interest rates, I never understood
quantitative easing and these days I would be lucky to get a 2.2 in
industrial economics but I know enough to realise that we have a good team
at the top.

I will go along with whatever Mark Carney and George Osborne decide to do.