How do you change your product from a dull but worthy leg-warming staple into a must-have fashion item? Rebecca Hoar visits clothing manufacturer John Smedley to find out
Florence Nightingale and Madonna aren't obvious sisters in fashion. They come from opposite ends of the catwalk - Nightingale in her starched cap and aprons and Madonna in her midriff-flaunting outfits are clearly worlds apart. Yet just as sensible Florence was a regular visitor to Derbyshire-based John Smedley - manufacturers of the finest Victorian woollen undergarments - now, 160 years later, Mrs Ritchie and hubby Guy wear their Smedley V-neck pullovers with pride.
The transition from Victorian undergarment of choice to essential A-list wear has not been mere chance. Yet it is only in the past four years that Smedley has come to epitomise a new kind of Brit cool. The main instigator was Lancashire-born Frank Wilson, a mechanical engineer-turned-manager who was appointed MD of Smedley in 1998. Under his steady hand, the company's brand awareness has increased dramatically, although the essential Smedley product has hardly changed over the past 60 years.
Smedley's history proves that it's possible to reinvigorate a brand without making radical departures. Founded in 1784 by John Smedley and Peter Nightingale - Florence's uncle - the business remains substantially in its home town of Matlock, Derbyshire.
Many of the original knitting cones and bobbins are still used, although the old Cotton Patent knitting machines - a major innovation in 1877 - have long been replaced by state-of-the-art equipment. And having soaked up the Matlock labour supply, the firm now has factories in nearby Clay Cross and in Armthorpe, Yorkshire - 600 employees in all. A quick roll call of surnames at the Matlock plant, however, bears close resemblance to the lists of the 1780s - Smedley staff stay with the company for decades, retiring only to give way to their children and grandchildren.
The staple Smedley product has undergone one major transition - from underwear to outerwear. Its famed long johns and knitted vests have evolved into the elegant sweaters sported by the likes of Tom Cruise, Nigella Lawson and Robbie Williams. With the advent of central heating, merino wool underwear proved too warm, and Smedley diversified into the classic rollnecks, crewnecks and V-neck sweaters that it's known for today. 'The com- pany has been about evolution, not revolution,' says Wilson, sitting in an office above Smedley's swanky central London shop. 'What the family didn't want when I came on board was any heroics. After 200 years in the business, they weren't looking for a fast buck.'
In the belief that the Smedley brand wasn't being fully exploited, he concentrated on Smedley's marketing and distribution, arguing that if these could be updated effectively the rest would follow. The policy seems to be paying off. 'When I arrived at Smedley we had a great manufacturing tradition, a phenomenally skilled workforce and a solid financial base,' says Wilson. 'But the way the product was being marketed was not terribly exciting.'
The Smedley story echoes the changes that have taken place at Scottish Courage's Newcastle Brown ale. It had a large core of loyal customers but needed to shake off its flat-cap image. As at Smedley, there was nothing wrong with the product - just the way it was marketed. Redesigned bottles and an ad campaign spoofing the Sophie Dahl Opium ads have attracted a new kind of drinker.
Another clothing firm, Burberry, relaunched its lines at the end of the 1990s. Burberry was founded 20 years before Smedley and had expanded further, yet sales were poor, so a new management team, new designers and new product ranges - promoted by high-glamour ads - were brought in to revive the brand's image.
Smedley hasn't had to take as drastic action. It was fortunate to have a diverse band of loyal customers. These ranged from affluent 20-somethings to pensioners who appreciated the comfort and quality of Smedley's products. It was also the fashion world's favourite, worn by designers such as Joseph Ettedgui and Paul Smith and fashion writers from the glossy magazines. Yet the brand went largely unrecognised by those who prefer their labels loud and visible. Wilson thought it was time to raise the profile.
The existing PR agency was dropped in favour of a London-based fashion PR team. Wilson also hired creative consultancy Martin Jacobs to help devise Smedley's first ever advertising campaign. 'It was never about building hype,' says Wilson, 'but we needed to start talking to a wider audience.'
Using advertising was a contentious decision, not least because an ad campaign would claim a large chunk of the Smedley budget. But Wilson was so pleased with the results that he hired super-hip ad agency St Luke's to take the campaign further.
He also felt that the Smedley logo was out of date. An intricately fashioned jay-bird within an 'S' (for 'JS'), the logo was deemed too fussy for modern eyes. The jay was ditched in favour of a simple typographic device, bearing only the words 'John Smedley'. The next big step was for Smedley to open its first shop - after 218 years of trading through outlets such as Harrods, Harvey Nichols and Selfridges. The flagship store in London's Brook Street was designed to raise Smedley's profile and to let it showcase its full range. It proved to be profitable - an unlooked-for bonus.
'We used some fairly progressive architects called Softroom,' says Wilson, commissioning them to design a modern shop that wouldn't alienate existing customers. 'They frightened the life out of me when I first met them. They brought in some very progressive designs of other things they'd worked on, and I recall thinking: 'This is all very nice, but I wonder if they can do shelves.'' A second Smedley shop opened in King's Road, Chelsea last year.
The changes coincided with a step change in British textile manufacturing. Previously, a number of established British brands had existed as 'converter' companies - producing material or garments to be sold into other stores.
Wilson's predecessor, Tony Langford, had resisted the pressure to do the same, preferring to build up Smedley's own brand. Then British retailers started cutting costs by moving their suppliers offshore. Unlike its peers, Smedley survived because it had retained its independence.
Wilson wound up a sideline Smedley business selling yarn to other manufacturers. 'It was difficult and very painful to get rid of that business,' he says, 'but no sooner had I extracted myself from it than all the mayhem broke out with offshore suppliers. We were one step ahead and we just avoided it.'
But how had he persuaded the Smedley family shareholders to close down the yarn-selling business? 'They were very supportive. They took the long-term view,' says Wilson, who has been fortunate to have had such freedom in running the company. The family shareholders, headed by chairman Lowry Maclean, have largely let him take the lead.
There has been much soul-searching over some innovations. For example, 70% of Smedley's market is overseas, representing a large proportion of its annual turnover. When he arrived, Wilson wanted the main focus to be the UK market. 'I didn't want to fall into that trap of being bought in Japan while becoming irrelevant in our home market. But it was controversial because we are such a big exporter.'
Wilson has tried to encourage a fresh outlook among Smedley employees by arranging for them to visit other manufacturers. He has also brought in new faces, such as head of design Jilly Cowen, formerly head of knitwear design at DKNY in New York.
Yet he has made most of these changes without touching the essential Smedley product. The garments are still manufactured entirely in the UK, something Wilson feels passionate about. And the products retain their subtle understatement, even though the fit and colours are updated periodically. 'Smedley is never quite in, but it's certainly never out,' says Wilson. 'We didn't want to turn it into terrace wear - worn by everyone on the football terraces.'
As well as the advertising and PR, Wilson is updating Smedley's distribution patterns. He has expanded the salesforce and is working on distributing throughout large regional centres outside south-east England. Improved international distribution is next.
How has all this innovation affected the bottom line? Growth in the UK, where Wilson has been focusing his efforts, was up 25% in the financial year 2000-01. Annual turnover is a healthy pounds 40.3 million, with sales now split evenly between womenswear and mens- wear; the bias in the UK used to be strongly in favour of menswear.
'We respect tradition, but we're not hidebound by it,' says Wilson. 'My job is about preserving the very best of the culture and introducing the best modern practice as well.' That doesn't mean there's no room for a few relics. Those long johns, for example. 'We still sell those to some niche markets - like the royal family,' he adds. 'And I have to admit I wear them myself. I put them on when I'm microlighting - it can get very cold at 10,000 feet.'
MAKING THE RIGHT CHANGES
- Be extremely clear about your objectives. If you're after profitability, you may need to change more than just the company's image.
- Brook no opposition - particularly from existing shareholders or old chains of command. You must bring the naysayers with you or be prepared to face them down.
- Identify your new target audience - think about what they want and how to reach them.
- Don't alienate your existing customers. You need their business.
- Put your money where your mouth is - new ad campaigns and PR don't come cheap.
- Keep your staff informed of changes in outlook and philosophy. Their support is crucial.
- Don't rush headlong into change for its own sake. Minor innovations sometimes make all the difference.