The Person: Nick Wheeler
The Company: Charles Tyrwhitt
The Job Title: Founder and Owner
Some people start making money seriously early don’t they?Certainly do. The young Wheeler was a mere student in arms when he set up shirt maker and clothing retailer Charles Tyrwhitt in 1986. In fact he had no choice but to found a mail order business as sales conducted by telephone would have interrupted his lectures. And from these beginnings it now has sales of nearly £80m.
Wowzer. And he’s still in charge of it all? Yup. He’s on record as saying he would never sell the business on the grounds that you end up with a piddly 5% and then get sacked. Plus he likes the fact his middle names are on people’s collars.
I don’t follow. Charles Tyrwhitt are the middle names of Mr Nick Wheeler Esq. And I am going to help you out here by telling you that you pronounce it ‘tirrit’. That’s on the website so lots of people must have trouble with it.
Obviously I knew that already. The website also has a useful section on Five Ways to Fold a Pocket Handkerchief. And if you don’t know your Twill weave from you Imperial Oxford then it will tell you that too.
Good. But he’s not really going to get sacked is he?Course not, but he says his MD is better than himself. And even when he gets home the retail rivalry doesn’t stop. His wife Chrissie Rucker runs The White Company with £120 million of sales just in the UK. He says that she will launch overseas when the time is right – unlike Charles Tyrwhitt.
Meaning? Meaning that they did it too early in his opinion. They launched mail order in Germany and US and it was not good. And while we are focusing on the negative they nearly went bust in 1994 and again in 2007.
Well there’s honesty for you. There’s more. TM Lewin, Wheeler feels, focused on the UK and now has 112 stores as a result whereas he ‘fiddled about’ abroad. Although he concedes his company is doing very well now. They have just made it onto the Sunday Times Profit Track 100 League Table with a profit jump from £2.6 million in 2008 to £9.5 million in 2011.
Yes, this public school self-deprecating thing, does he do it all the time? Quite a bit. But he does admit to being ‘good with data’. And he was pretty shrewd to open his first shop on the home of men’s haberdashery Jermyn Street in London. That gave Charles Tyrwhitt credibility and Wheeler was also right on the money with the internet – setting up in 1998 because the internet was ‘perfect for our business’. In fact in a Utopian world they would drop catalogues like a shot.
Why’s that? Because they send out 800k every three weeks and that’s a lot of money. So every month he runs tests on who they can drop from the catalogue mailing list. Bizarrely Wheelers says the company is having to dampen demand and concentrate on more profitable sales but back in the early days he was too optimistic and they never hit a target.
Here we go again. OK, I’ll just tell you about the two busts and then I promise we can go back to happy land. In 1994 everyone thought they were invincible. Charles Tyrwhitt bought a children’s wear retail business. And they lost more on that in three months than in as many years of gentlemen’s shirt retailing. Then in 2007 they began with women’s wear and ended with £9 million of stock that did not sell. A covenant was breached with RBS and the rest was nearly history.
Jermyn Street: the heart of shirt-land.
So the moral is? The moral is that he learnt his lesson. And now his focus is on being the best shirtmaker. A long time ago all the shirts were manufactured in Clacton by the top shirtmaker in the country but now the gloves are off and it’s 4 shirts for £100 on Jermyn Street so they are made in places such as Peru, Egypt, Romania, and Vietnam. But he’s not in the business of screwing over suppliers, in fact he wants everyone to love his company and personally chats for 30 minutes to new starters so that they see it as their own too. His email is on the website and customers are free to contact him. He’s that kinda guy.
Phew that’s a big inbox. Talking of customers who and where are they? 75% of the business is online or mail order with the consequent small capital expenditure. As he says ‘the wonderful thing about mail order is you get sales before you’ve even paid for the catalogue.’ 55% of sales are outside the UK and he has been quoted as saying that his US customers are younger than his European ones, which bodes well for that market.
So if TM Lewin did so well with their store numbers what’s his thinking on his own? Charles Tyrwhitt has a 36-month payback on stores and Wheeler wants them to be there for 70 years. Currently they open four per year and there are 16 in the UK and internationally three stores in the US and one in Paris. He won’t put a number on the total number of stores because ‘who knows how many stores we need’ but it could probably be up to 30 in the UK and possibly the same in the US.
Is he happy with the footfall through the doors? There are 365,000 new customers per year, mainly through the stores and one thing Mr Wheeler is happy with is that they know where they are coming from and which channels they are buying through. It’s that data thing again.
And what does the data say about that bane of the home delivery industry – the level of returns? Well now, this is interesting. Only 2% of men’s shirts are returned – a tiny amount considering this is the biggest selling sector of the company. But 22% of women’s clothing is sent back even though it is a tiny part of the deal.
That’s got to be keeping him awake at night? You’ll have to ask Mrs Wheeler. But certainly he says he ‘is in favour of cutting choice’ – the company currently has 400 SKUs and it looks like women’s wear might be the place to start wielding the knife.