Rampant retailing

Published: 01 February, 2007

The unique product that Ann Summers brings to the shopping arena has helped to ensure the retailer continues to benefit from profit increases despite difficult trading conditions.

Christmas trading was particularly strong with a 2 per cent like-for-like increase reported during December, which increased to 12 per cent in the 10 days leading up to the big day itself. Sales online were up 36 per cent compared to the same month in 2005.

But when you look at the product that Ann Summers is offering, it's not surprising it's doing so well.

"We're not just a lingerie store and we're not a sex shop," says managing director Jacqueline Gold. "We have something that's a very unique brand. We're fun, and that's really important, particularly for women. Some 76 per cent of our customers are women and we've done something special by creating an environment women feel happy shopping in."

The company's new retail concept is based on the idea of creating a boudoir feel, with crystal chandaliers, pink carpets, pink girly decor and changing rooms with peepholes so that customers can allow their partners a peek at what they're trying on. Currently, 26 of the 134 shops are new concept stores.

"Last year was a very challenging time for all retailers and we had a very ambitious expansion campaign which we slowed down to take stock and make sure our house was in order," says Gold. "We're seeing some very good signs already in the new year."

The latest store opening was in Bournemouth, but Gold says the company is always on the lookout for new locations.

"We have people on the case all the time because there are always key locations we're interested in," she says. "It's just a matter of waiting for the best locations to come up. You can't always plan it so you open so many a month.

"We believe prime locations are key, which is why we have stores in shopping centres as well as on the high street. But there's also a good case for going to secondary locations because we're often a destination store. Off prime has significantly cheaper rents and though we might not be as high profile, our customers still seek us out."

Surpisingly, some shopping centres are still unsure about entering into contracts with Ann Summers. The company reports an ongoing saga with Bluewater, despite customer surveys suggesting that there is definite demand.

At the moment the retailer is focusing its attention on opening bigger stores in the larger cities. It's also looking to concentrate more on the exotic climes of Spain where the company would like to expand.

"At the moment our hotspot is definitely Spain," explains Gold. "We have a flagship in Valencia, which is doing extremely well, and with some of the UK challenges out of the way we're very excited about Spain."

And with more people shopping online, the company is currently doing a lot of work to make its website more customer friendly. Online sales are currently up 50 per cent, according to Gold, so she certainly recognises the benefits of investing in the future development of internet sales.

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=== Statistics ===

ann summers

Turnover (year end 2005): £123m

Group pre-tax profit (year end 2005): £2.8m

Like-for-like sales (year end 2005): 11% retail; 11.3% parties; 30.2% internet

Number of stores: 134

Average store size: 1,500 sq ft

Total selling space: 200,000 sq ft

Joint acquisition agents: Knight Frank and Mentor

Ratio of shopping centre vs high street locations: 45/55

Managing director: Jacqueline Gold