The retail magnate who swapped running the high street for renovating properties in rural Italy
6 min read
09 October 2015
The former CEO of Adams Childrenswear spoke to Real Business about making the switch from retail to property, and his hope to create a legacy with his family business.
It’s fair to say Michael Hobbs is something of a retail heavyweight, with over twenty years of experience across high street names from Burtons to Laura Ashley to Sears – working his way up after stints in his father’s shops on evenings and weekends.
He negotiated the £87m management buyout of Adams in 1999 when the Sears empire was dismantled, then went on to take Adams from 280 high street stores to a global franchise, designing and producing 50m units a year. He has described retailing as being “in my blood”, so why the change to his newest project, Appassionata, renovating properties in Italy?
Hobbs moved on in 2005, looking for a new challenge and chaired a number of businesses. The process of leading an MBO, doubling Adams in size, while managing all the stakeholders’ requirements “had taken its toll” he admitted. As well as looking for a change in direction, Hobbs was also looking around for somewhere else to settle overseas with his family. They became enamoured with the Le Marche area in Italy, with its unspoilt views and “instantly knew that we had found a part of the world we wanted to call home”.
Hobbs and his wife Dawn bought a number of properties between 2004 and 2007 “with the intention of renovating them and selling them outright”, but soon realised that many local holiday home owners were upset with their current arrangement – “we discovered a common theme”.
“So many of them were unhappy with owning a property they only used for five or six weeks each year. The costs, the upkeep, maintenance, security, gardening and continual interruptions to precious holidays were taking a toll, and many were trying to sell,” he explained.
Appassionata began to take shape, with Hobbs and his wife researching, investigating and visiting fractional ownership developments around the world during the course of a year to perfect their model. One of the biggest differences is of course the move from running a huge retail name to a family business. “It’s so different,” Hobbs agreed. “We are a small team, working closely together, turning our hand to whatever needs to be done. I am doing things today I haven’t done for 20 years!”
As a family “we all muck in”, and Hobbs feels the change is refreshing. “I don’t miss corporate life, large structures, inefficient decision-making and the constant focus on measurable growth.”
The goals with Appassionata are quite different – “we want the business to perform well, but we also want to create a legacy, something we are proud of”. Running what is essentially a lifestyle business has been a breath of fresh air for Hobbs, who feels the freedom, choices and rewards are “much greater now than when I was running a business employing 4,000 people with sales of £250m”.
Despite his established business credentials, Hobbs admitted “taking the plunge” was still rather daunting, and the biggest challenge faced when setting up was really “the unknown”.
“We were embarking on something that was relatively new to Italy and our approach was unique. We already owned the properties and had decided to personally fund the developments, as we didn’t want the complexity or risks of outside shareholders or bank financing,” he explained.
Hobbs said there were “lots of mistakes along the way” but the planning and hard work paid off, so any hiccups were balanced out by the successes.
He thinks what distinguishes Appassionata as a business is that “we not only create the homes we also look after them”. Hobbs said it allows the family to share their love of Italy “with a discerning and select group of people”.
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They aim to take “professional business skills” and marry them with “style, creativity and passion”, which Hobbs said offers something unique, “a boutique and luxurious family-owned fractional ownership business”.
In his many years of working in business, Hobbs has learnt a lot along the way. He thinks it’s important not to take yourself too seriously “and make sure you are properly financed”. Things always “seem to take longer than expected and you need to make sure you have enough money to last”.
Hobbs wanted a change and though his new business is a totally different prospect to his previous achievements, he still has goals for its future. He hopes it will become a long-lasting family firm that will “benefit many generations to come”, and with the wry comment that “the harder I work, the luckier I seem to be”, it doesn’t look like Hobbs will be slowing down anytime soon.