Spend-less Shoes’ onward march
With six stores set to open within the first half of this year, Spend-less Shoes is proving that its formula for being the largest family footwear retail chain in Australia is still working after 28 years in business.
With 171 stores across all states and territories, the chain’s new stores include two in NSW (metropolitan Sydney), two in Victoria and one each in Queensland and Tasmania.
“We’ve got six to open, so that’s exciting [with] one scheduled to open on June 29,” owner and MD, John Charlton, told Inside Retail Weekly.
Offering good value footwear for the whole family is the consistent and in-demand message driving the business, according to Charlton.
“We’re a cost-conscious business – it’s one of the reasons why we’re still in business after 28 years,” he affirmed. “Keeping costs low and passing on the savings to our customer is such an integral part of what we do to attract business.
“Good value to the customer hasn’t changed. It’s always popular. You’re only as good as your product. We take great pride in delivering our seasonal ranges that are the latest fashion looks and trends for people of all ages.”
Federal budget cuts while Tony Abbot was Prime Minister were a something of a hiccup for Spend-less Shoes in mid-2014.
“We had a tough time when Abbott’s budget came out,” Charlton recalled. “Our average punter is on an income of probably under $70K a year; that budget scared them a lot. From that day onwards for the rest of 2014 it affected sales.”
However the family footwear formula weathered that period well and has stood the business in good stead – no pun intended. Indeed, Spend-less is one of the few shoe store chains commonly found in shopping centres that cater for the whole family.
“The landlords all fall in love with the beautiful fashion boutique,” he opined. “But at the end of the day, the average family in Australia, shopping in a shopping centre, has mum and kids and we have a men’s range, a women’s range, a sporting range and a kids’ range. And then we have what we call ‘other’ – ugg boots, thongs, slippers – everyday wear, which we sell a lot of.”
Spendless is witnessing a change in direction within women’s footwear, which has hampered that part of the footwear business.
“Women’s fashion shoes are struggling a bit,” Charlton lamented. “If you go to the front of any school and watch the mums get out of the car, they’re all in lycra [and] they’ve moved to a more casual and sporty type of footwear.”
Spend-less aims to ensure that its floor layouts and navigation enable customers to shop efficiently, including allowing self-selection and arranging the stock by shoe size.
“Everyone is time-poor today; the way we lay out our stores, it’s a time efficient way to buy shoes,” Charlton said. “They like the idea of coming in, being able to go to their size, pick it, try it on and go to the counter. We’re a self-select retailer, but of course we train our staff to know the product, to try every pair on, to know how it fits, so they can pass that knowledge onto the customer. We’re having a big focus on human interaction in our stores. We’re not always the prettiest but our customers love us and we speak to them a lot.”
The online space is another area in which Spend-less is focused. Its online store is a growing part of the broader business. Online sales are currently 78 per cent up on the same time last year [February 2015], and increasing all the time, according to Charlton.
“We’ve built an online store presence which is an important part of our overall offer to the customer as well as integrating us with a social media presence – and that is something that is really growing. And we’re driving that awareness and using it to keep our brand relevant…. the social media presence also allows you to get closer to your customers.”
The evolving market in Australia, couple with the rising impact of the internet, has resulted in Spend-less Shoes becoming more fashion forward.
“With the internet, styles are changing more frequently than before, so our buyers have to travel the fashion capitals of the world more often than they ever had to pick up on popular trends that we incorporate into our seasonal range.”
When asked about longer-term plans and the possibility of taking the Spend-less brand into overseas markets, Charlton intimated that that could be feasible in the not too distant future.
“There’s probably going to be quite a few opportunities for future growth in Australia,” he said, “but there’s some very successful Australian retailers heading off to New Zealand and South Africa, and I’m monitoring those retailers with interest.”
Promotion levy pain
Shopping centres are the typical location for Spend-less Shoes stores.
One of Charlton’s big gripes as a shopping centre tenant is the promotion levy paid to landlords.
“It’s a big cost, which I don’t think we get a great return on,” he laments. “We look on it as a rental cost; [for example] we were running our post Christmas sale and emailed out to our 171 centres that we had a promotion on and we would like to put up some posters – only eight centres came back and said we could do it. It’s becoming increasingly difficult … because many of the displays are run by external companies and then they want to charge on top of the promotion levy we already pay. So where are our marketing funds being spent?
“If we had that money ourselves to spend – and it can be up to five per cent of your base rent – we’d do a lot better job in promoting our business. And there’s no accountability of the landlord to say where they spend it. I don’t think it’s a good spend of our money, and I don’t think there’d be many national chains that wouldn’t agree with me.”
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