Some 41 per cent of the UK businesses that became insolvent in 2014 managed to come back to life, but running out of cash is still every entrepreneur’s nightmare. Yet it hasn’t stopped Saltrock being crowned Retail Hero in the awards’ 17th year.
“Our really rapid growth is what I think sets us apart from the competition. We’ve expanded from 20 to 42 stores since 2014,” co-founder Angus Thomson told Real Business.
The surf-inspired clothing retailer – which today sells men’s, women’s and children’s casual clothing – was established by brothers Angus and Ross as a wholesale business in the 1980s and remained one throughout the 1990s, only moving into retail in 2002 when the firm’s owners leased well located property to reach high street consumers.
Looking back, Thomson realised this was bad timing. When the UK slid into recession in 2007, the owners of Saltrock found themselves “stuck with some pretty onerous rents”. After struggling through an economic downturn for three years, Saltrock went into administration in 2010.
“For me, personally, as well as for the business, it was a real low point,” Thomson explained. “I was 23 when we started Saltrock – I had been growing it for most of my life – and it was incredibly difficult to see the business fail.”
Saltrock was rescued by Natatomisam, a family investment vehicle lead by James Brent – though the Thomson brothers remain shareholders and still run the company. For the co-founder the best thing about his company’s change in fortunes was that Brent’s investment allowed Saltrock to keep avoid any staff redundancies.
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“For me that was a massive high. I know our staff; I’m in the stores, I see them every day. When you spend time with people you really don’t want to let them go,” Thomson said.
Since 2013, the company has gone from strength to strength, largely by following through with the strategy of retail expansion that the brothers had decided on before the recession. As well as opening new stores, Saltrock saw sales increase by almost 50 per cent in 2014, and pre-tax profits grew to £825,065.
But how has the company achieved such phenomenal success? “We’ve followed a bricks-to-clicks strategy, opening stores in coastal towns and using them to get email data and increase online sales,” Thomson explained.
“It’s given us low cost entry into a competitive market, and we see our stores as great windows to our brand. They’re in great coastal locations that people go to on holiday. Then they visit the website when they’re back home.”
He emphasised that the stores are profitable, but that the focus for growth was online, especially as Saltrock seeks to expand internationally. “We might have one or two stores abroad, but international expansion will be predominantly through the site.”
Asked if he was ever tempted to pursue less aggressive expansion after suffering from setbacks, Thomson answered with an emphatic no. “We picked up where we left off and continued as we had been doing, and it was brilliant when we succeeded because it showed us that our strategy had been the right one.”
Thomson believes the company has a lot of growing still to do. Laying out Saltrock’s plans for the future, he explained: “We’ll be growing to between 80 and 100 stores, and creating much stronger internet presence, especially internationally.”
In September the retailer announced plans to make click-and-collect available in all 42 Saltrock stores, and will also begin selling through Amazon and eBay.
As well as changing the way they reach customers, Thomson thinks the brothers have evolved the Saltrock brand a lot since founding it in a bed and breakfast in Cornwall in 1988. “We saw a gap in the market. Even at that young age we were very much aware that the surf lifestyle was embryonic. And if anything it’s even more popular now. But saltrock is about more than surfing these days. Our shops are in coastal areas, but beach culture is bigger than that. There’s bodyboarding, surfing, kayaking – it’s the great outdoors. We love surfing, but we’ve got young families, and Saltrock is for walking the kids on the beach too.”
Thomson’s passion for what his company represents is clear, and he thinks that enthusiasm is the most important thing that retail entrepreneurs who want to follow in his footsteps need. “My advice to anybody, stepping out in any business, is that you have to completely understand what you want to deliver. It has to run through your DNA, and you have to go for it – really go for it. Even with all the knocks – and there will be knocks – you have to keep going.”
Saltrock is “all-consuming” for Thomson. And with the even more ambitious growth the company has planned for the future, he can’t see it being otherwise any time soon.
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