As Lombok reportedly explores a sale in the region of £10-15m to raise capital for its ambitious growth plans, Furniture News looks back at an interview with MD Stuart Lewis in July 2011, two years after the retailer went through a pre-pack administration …
The Gasworks, Fulham – a community of over 300 SME businesses, artists and professionals, surrounded by antique centres and some of the most sophisticated shops in London. Here sits the headquarters of Lombok, the niche multiple with the big reputation for Indonesian interiors. Paul Farley tracked down new MD Stuart Lewis to find out how he is handling adversity and preparing for the future.
Lombok started trading from a converted garage in Parsons Green in October 1998. Founded by Alex Cresswell-Turner and Sarah Morison, the original aim of the company was to provide high quality, stylish furniture at affordable prices while also making furniture shopping an enjoyable experience.
Having lived and worked in Asia for seven years, culminating with two years in Indonesia, Alex’s house in Jakarta was home to an impressive collection of furniture – a collection that became the envy of his visiting friends. Realising the difficulty of obtaining similar product in the UK, Alex and Sarah researched over 100 manufacturers in Indonesia to launch their collection of handmade, solid wood furniture at affordable prices.
For the first year Lombok operated from Parsons Green, London, and two warehouse units near Heathrow. Building on the success of Parsons Green, Alex and Sarah decided the formula they had created warranted a physical shop and therefore launched a spacious showroom at 555 King’s Road in July 2000.
In March 2001 Lombok moved into a 20,000 sqft head office and warehouse in the Gasworks in Fulham. When Lombok moved into pre-pack administration in 2009 turnaround specialist Privet Capital bought the business. Stuart Lewis replaced William Landale as MD last August, after working for three months as Lombok’s retail director, and his subsequent tenure has seen the multiple consolidate its position as the UK’s premier choice for handcrafted colonial products.
Eastern-inspired, individual and aspirational, Lombok boasts a unique identity which has proved instrumental to it weathering the last year. With consumer confidence at a low, changes to the company’s structure have been necessary – including the management, buying and finance people, the removal of as many fixed-cost scenarios as possible, and the implemention of training.
Stuart is confident in these developments. “The business is more focused now – I’ve worked on creating a variable cost base rather than a fixed one,” he says. “Depending on the economic outlook, it’s important – particularly with premium furniture – to be able to react quickly to changes. Consequently, stockholding has been reduced to the bestsellers, we’ve outsourced the logistics, and we’ve taken a number of management positions out.”
Lombok’s enduring strengths have provided the foundations for these changes. Customer care, creative marketing and product development combine with an aptitude for product and store presentation, helping make what is actually a fairly moderately-sized operation a household name.
“We can’t be as aggressive as some of our competitors – indeed, we wouldn’t want to be”
Stuart has worked hard to introduce professional processes throughout the company and improve internal communication. Finances now play a bigger role than ever, and some changes have, he admits, been difficult to implement. However, he says that for most, “it’s been a breath of fresh air”.
Sales are up on last year, and now the bigger structural changes have been made there is more time to focus on the company’s long-term strategy. Key to this, of course, is the product offering, and Stuart is keen to maintain quality while keeping abreast of changing tastes.
“In all, it’s been an extremely varied and challenging year,” says Stuart. “While my background is reasonably broad, it’s focused on retail – but it’s the first time I’ve been involved with the buying team in such detail.”
While accessories are an important part of Lombok’s offering, furniture comprises three-quarters of its sales. The retailer sources the majority of its furniture from Indonesia through long-term partnerships that promise quality assurance. Stuart comments that the factories have an almost family-owned feel. “We are obviously very conscious of treating people correctly, and we’ve got some fantastic craftsmen,” he says.
Lombok’s autumn ranges will launch in the next three months, but the new buying team is looking further ahead to spring, and to subtly different product directions. “We want to make our customers feel that Lombok is more than just a dark teak, Eastern-inspired company,” says Stuart – which hints at the likelihood of more light-coloured furniture alongside the expansion of current popular ranges.
Lombok is also moving from just two product launches a year to around seven, giving customers a reason to shop more regularly.
“The last few months have been very, very promotionally driven,” says Stuart. “The high street has seen some of the most aggressive discounting that I’ve ever witnessed. There’s definitely a lack of consumer confidence at the moment, thanks to fears of interest rate rises.
“At the moment, customers are heavily involved with promotional activity. We are implementing discounting at a similar level each year, but the cuts are slightly deeper now. We can’t be as aggressive as some of our competitors – indeed, we wouldn’t want to be. Customers are not pressured by time right now – people can wait, and they will wait, for the products to be at the right price. I think we are going to take a reasonably cautious approach in the next few months!”
Despite Lombok’s restrictions, Stuart believes that much of the brand’s appeal is actually due to its smaller scale. “Most of our advertising is focused on web and email campaigns,” he says. “We don’t have the scale to go national every week! We think of our brand as a niche one, and we have to see this as a strength. The plan is to get more of a balance between brand and promotional product advertising going forward.”
To this end, Stuart is creating a solid marketing calendar, and has driven a full review of internal POS to make sure Lombok is communicating with customers properly – which includes its in-store image.
“At Lombok, our head of visual manager Laura North is working on achieving consistency across the stores,” he says. “The look and feel has to remain the same – it’s about putting the business in a place where it’s ready to handle new outlets quickly and easily, but we’re still keen that they retain some individuality. Aspirational selling is something that Lombok was always great at – the customer is genuinely the number one focus.”
A further Lombok USP is its green credentials – there is undoubtedly strength in exclusivity, and Stuart is keen to play to this strength. “I think that we are still wanting to put ‘eco’ at the forefront,” he says. “I think customers are still absolutely focused on it, but price and quality are equal concerns. Above all, we are focused on presenting our green story honestly. We have some competitors making a much bigger play of it!”
As well as enjoying success through pop-up stores – such as the temporary outlet in St Albans that sprang up last Christmas – Lombok has now opened a concession in House of Fraser Oxford Street. Opportunism is a necessity of retail today, and Lombok is rolling with the punches well.
“If the opportunity arises in our target areas we’ll make the most of it,” says Stuart. “Our concession business with HoF gives us the opportunity to reach further out. We would love to be in ‘destination’ furniture streets across the UK – we’ll continue to review the store portfolio.”
Right now, Stuart admits that a great deal of his business is migrating to the web. “Online is our biggest store,” he says. “It’s an area that we’ll certainly be investing in, and there are lots of opportunities to improve it. We’ve just signed off a three-year strategy, and multi-channel is a key part of this.”
Stuart’s broad retail background encompasses furniture, food and clothing, and has left him in an excellent position to help transform Lombok’s fortunes.
“I still value my time at M&S for the tremendous learning opportunities it presented, and the chance to make a real difference”
“I’ve always had a buzz for retail. It’s about working with a group of people as a team. I love the operational side of shops, working with customers – and continually striving to present the perfect offer. No day’s the same, but, while it’s demanding, it’s also a lot of fun to see people grow and develop.”
Stuart’s retail career began at 15, packing bags in Sainsbury’s while studying. “That experience completely taught me about talking to customers,” he says, “and the need to marry up the mismatch between what customers want and what they think they want.”
At Lombok, Stuart likes to keep his ear to the ground. He spends a good deal of time in the stores, and engages customers directly through social media and his direct email address on the company’s website.
After Sainsbury’s, Stuart was fortunate enough to land a place on an M&S management training course. He worked with M&S for nine years at different locations across the country including Marble Arch and Oxford Street. “Still, to date, those years were the most amazing retail experience I’ve had in terms of the trading environment,” he says.
While Stuart Rose was making his mark at the helm of M&S, Stuart Lewis was opening several new stores including the retailer’s flagship Store of the Future in Basingstoke, which heralded the bright, clean, modern look the stores enjoy today.
“I’ve always had the opportunity to work at the front end of changes in every business,” he says. “M&S went through quite a change from a visual presentation perspective. I still value my time at M&S for the tremendous learning opportunities it presented, and the chance to make a real difference.”
Despite being happy at M&S, Stuart greatly valued the opportunity to learn, and left to join Tesco in his late 20s. When Stuart joined M&S it was 10 times the size of Tesco – by the time he left this comparison had been reversed.
“Tesco was a fantastic experience,” he says. “It’s a fundamentally simple operation, and they absolutely have the ability to connect with their customers, despite their huge size.”
From here, Stuart went on to explore the world of private equity – heading the stores of the ill-fated Ilva UK. Ilva’s fate is well known, and, according to Stuart, principally a matter of bad timing. “We launched 400,000 sqft of retail space nine months before one of the biggest UK retail downturns,” he says.
“It was an amazing concept and launch, and wasn’t necessarily a wrong move – but it was almost too far ahead of its time, on too great a scale. People fell in love with Ilva’s stores and products, but they needed some time to get used to it. It’s telling that it’s still very successful in Denmark and Sweden.”
After Ilva, Stuart returned to Tesco to work for its international operation, which then covered 14 countries. He says: “Up until then, my whole thinking on retail was about the UK market – but it quickly became global.”
Lombok’s colonial-style products receive significant interest from abroad, and, thanks in part to internet selling, it’s an area ripe for exploration. “Part of our strategy is that we’d love to consider international opportunities at the appropriate time,” says Stuart.
For now, he is content to concentrate on improving the supply chain and focusing on service levels to ensure Lombok stays on track. Each day, the company is becoming quicker to react more effectively to changes in the market, and has harnessed the upheaval of the last two years to emerge stronger and more confident in its offer and approach. From what I’ve heard, Lombok is in safe hands.
This article was published in the July 2011 edition of Furniture News magazine.
