Retail Insider’s Craig Patterson interviews retail exec Daniel Ritchie about his past with several notable retailers. The interesting conversation is a walk down memory lane that many will enjoy. Daniel Ritchie is still at it after an attempted retirement, and is working with brand Dr. Vranjes to get it into Canadian stores.
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Featured during this interview:
- Daniel Ritchie, Retail Resource Partners Inc.
- Dr. Vranjes
- Retail Resource Partners Inc.
- Bretton’s Image: Martin Vendryes Woodworking
Transcription:
Craig Patterson
Welcome to the Retail Insider video interview series. I’m your host, Craig Patterson. And we’re joined here with a special guest. Daniel Ritchie is a retail veteran with all kinds of experience in all kinds of areas. Thank you so much for joining us, Daniel.
Daniel Ritchie
Pleasure. I’m really happy to be here and to talk about my experiences over the last 45 years in the Retail business, so yeah, it’s a long time. But, you know, it started for me back in Montreal, and in 1978 When I joined Holt Renfrew, and I joined them there as the Traffic Manager looking after the movement of products into the country and around the country. And at the time, the business was owned by Carter Hawley Hale, a big US conglomerate, and over the course of the previous 15 to 20 years had put together department store regional department store chains into a bigger group like Emporium Capwell, from San Francisco and Thalhimer’s from Virginia and Wanamaker from Philadelphia. And then of course, the jewels in the crown, Neiman Marcus, Bergdorf Goodman, and eventually Holt Renfrew, which prior to that had been privately owned by the Walker family. So it was, it was a really good introduction. Because at the time, in the in the late 70s, early 80s, with Carter Hawley Hale, we had an opportunity to interact with our colleagues across North America, and go to conferences and learned about different ways of doing things and look at economies of scale. But like everything else, you know, those things sometimes come tumbling down when they don’t keep up with the times. And, you know, we’ve seen over the years, what’s happened in the department store business in Canada, but also in the US, all these regional players have gone now. You know, eventually they all got sucked sucked up into Macy’s, and Bloomingdale’s. But it’s, it was a fun time. It was a heady time in Retail. Until 1986 When Galen Weston came along and said, I think I’d like to try this. So the Weston family through their private investment holding company Whittington investment, bought Holt Renfrew from Carter Hawley Hale in 1986. And then we we started on a new journey with a new team of people change at the top, the President was swapped out. And we went on from there during the time I was there. I couldn’t say that the company made a lot of money, couldn’t say the company lost a lot of money. It was kind of just wipe your face situation. And, you know, they were looking for their niche. We spent a lot of time refocusing our buying team on ensuring that we didn’t have any overlap. Previously, we had a lot of buyers, who had specific remits, but there were overlapping suppliers and so on. So it was a matter of cleaning all that up and getting some focus and we bought, we brought in a retail consulting group to help with that management, Horizons in the UK. So it was it was a lot of fun. It helped us to reinvent the business. At the same time, we were starting to look at profitability by store, expanding in some markets closing down other markets, getting out of suburban stores, and both mostly in Montreal, but in Quebec City. And even in Winnipeg, where we had multiple stores, and then looking for the right format to move forward. We had a couple of shops that were designed by the Watt Group, famous for their involvement with with the Westons and Loblaws in particular, working through with Dave Nicol from President’s Choice at the time. But they became just a little bit too pedestrian and not special enough for our consumers. So they didn’t really survive in the long run. But it was it was a great experience. I was there for 15 years, and then rode off into the sunset as you do to try something different.
Craig Patterson
Daniel, you were there when Holt Renfrew relocated its store on Bloor Street from I think it was 144 Bloor Street which is about a 60,000 square foot tall narrow store to the current flagship location which is located at 50 Bloor Street West. What was that transition like to create that flagship store which is still there today on Bloor Street, it’s a little bigger. It looks a little different.
Daniel Ritchie
It is a lot bigger and it looks a lot different. But at the time, my major focus at the time, my role at the time was to get the products and that we’re going to fill that store less so about how it was run and managed. But the interesting thing was that that store opened in 1979 but it never really took off. We had trouble from almost from day one, creating that buzz and that excitement and that customer focus that we needed. And it was one of the major reasons that the business decided to up stakes in Montreal and move its head office to Toronto. And in doing that, there’s the theory that the store that has the biggest buys and the biggest opportunity is always the one that the merchants have their eye on. So our buying office our head office, when we moved was actually right in the store in in the part of the shop today that is home where and you know, the the accessories and things that are up that little staircase when you go through the store, to the to the east side, that was the buying office back then. And you know, eventually it’s all been turned into retail space, which was the right thing to do. But at the time having the buyers actually physically have to walk through the store multiple times a day, is what really put focus on what customers needed in Toronto, because the markets are very different. And so you know, so that was a big benefit. And I think it was then that Toronto suddenly started to take off and Bloor Street became the number one store in the chain.
Craig Patterson
Interesting what happened with Montreal it had a store that closed a while ago, a flagship store in Sherbrooke Street. Now there’s of course, there’s Holt Renfrew Ogilvy. But Montreal saw a bit of a downturn in its retail from the late 70s, I think into the 80s.
Daniel Ritchie
I would say that it did. I mean, it was a time when we had a number of suburban stores in Montreal as well. So, you know, we looked at profitability around all those models and started to pull it back in and really focus on the main shops and the time would have been Fairview in the West End, Rockland, which we renovated and rebuilt. We had left Rockland and came back when the project where the the mall was actually being renovated, and really focused on a fewer parts of the city and fewer consumer profiles. And we were at the time trading in that beautiful 1300 Sherbrooke street art deco building. That was actually an amalgamation of a couple of buildings. So you would get off on one floor, and you’d have to figure out wherever you needed to get to go to the other floor. But over time, I guess the one thing about that building is that you couldn’t do much with it in terms of expansion. And the the each floors footprint was really tiny. You talked about that Bloor Street store the old one at 144. It was Sherbrooke was similar to that. It was a lot of what was seven or eight floors, all small footprints. And you couldn’t do a whole lot with it. So I think when the old movie thing came along, and I was long gone by then, but I think it made sense for boats to look at how they could actually do the things they wanted to do in a more productive way.
Craig Patterson
No, yeah. And I’m going to say in Western Canada, the Vancouver store at the Pacific Center had already been opened by the time you joined Holt Renfrew. I think that was around 1975 that it opened.
Daniel Ritchie
Yeah, it was already there. And again, that’s a footprint that changed dramatically over the years from then to what it is today. But Vancouver was a city that was starting to catch fire then that were you know, there was an influx of, of Asians, particularly Japanese tourists. So it was a matter of how you how you catered to them and how you got money out of that population when they when they arrived in the city because they weren’t there for that long. But over time it grew. There was always speculation that we wouldn’t have a second store in Vancouver. There was talk around Oakridge, there was talk around Park Royal in West Vancouver. And then ultimately, we ended up with a store in Whistler, which was in the new Chateau Whistler, it never really took off. It was hard to merchandise. The problem was you never knew who was going to be in town profiles were so different, wildly different.
Craig Patterson
And it was tiny. I remember it was about 1991 I think it opened.
Daniel Ritchie
And the other challenge that we always had in Vancouver was around being able to get the brands that we wanted in the shop because there were a couple of stores that had been around forever and they they had these brands that you really needed at the time. They’re locked up so you couldn’t get them. And that that meant that we had to we had to have in some regards brands that were not as popular. You know, I’m sure the platform has changed completely today. But back then it was. It was a challenge. You just couldn’t get the brands that you wanted to have.
Craig Patterson
Yeah. Now let’s talk Western Canada a little bit more. I remember when I was a kid, Holt Renfrew in Edmonton left Jasper Avenue and moved to the Manulife Place. Because you would have been in there around that time. So that was around the 1982,
Daniel Ritchie
It was 82, I think, yeah. Yeah. I was I was there at the time. We were on an expansion kick. We were looking for property in Calgary because we had a terrible shop on Eighth Avenue. And then we had Chinook. And eventually, we opened downtown Calgary as part of that new Eaton Centre development, and close Chinook. And it was a similar thing at Edmonton, we had an old tired store and we went into that brand new Manulife Place made a huge difference to the business and we were quite a force and Edmonton for a long time. Similarly, with Ottawa we opened Ottawa on Sparks Street in 1978. And it was a great little store for the longest time but that whole Ottawa markets changed so dramatically now that you just couldn’t you just they eventually left Sparks Street. I think it was partly an access issue too. You couldn’t get to the store all that easily. So you know, it was on a mall on one side of a pedestrian mall. So that was a challenge. And then Winnipeg same thing. We had two stores in Winnipeg. We eventually got rid of one in Polo Park. Eventually, when Portage place was redeveloped, we went in there and and ditched the Polo Park store. So lots of change over time, Quebec City similar story. The legacy store in downtown Quebec on Baude Street was eventually closed and all the attention was put onto Ste-Foy. So that’s where the consumer has migrated to from downtown. In a lot of Canadian cities. It’s just not that important anymore.
Craig Patterson
And what happened to the Quebec city population, we actually discussed this before where there was an aging of the carriage trade and that the younger generation moved elsewhere.
Daniel Ritchie
I think that there’s a fair number of people during that timeframe who left Quebec City completely because of opportunity or lack thereof, the population aged, but those who stuck around, didn’t stay in the downtown core. So they were in Ste-Foy, they were in Sillery. Well, they were in communities that were more the sleepy town communities, suburban communities around the city. So trying to get somebody downtown was a real challenge. And the other thing that I don’t think you can discount is that one of the things that changed the profile during those days with Holts was that it was very much reliant on a fur trade that was disappearing. For obvious reasons, people, you know, were moving away from, from real furs to have faux furs or no furs at all. And I think that was a big change, I mean that the whole run for business really revolved around fur trade back in 1837. And that was there even until you know, not that long ago, where you had not just the sale of fur coats, you also had the winter, the summer storage of fur coats. And that was a massive business for Holts. You know, we had in the Montreal store, we had a massive fur vault that was two stories high and the building adjacent to the main store, and it was temperature controlled and all that sort of thing. And we had similar fur storage businesses right across Canada, which were supplemented by or led by depending on the city the actual sale of fur coats. So you know as as that changed it really changed the business big time. And that’s something that I think probably Quebec City tale I’ll have its own because Quebec City you know, those customers were either gone or dead. Nobody was wearing furs.
Craig Patterson
That is so interesting. And the stores like say Polo Park in Winnipeg. Do you remember how large they were? They were smaller, sort of boutique size.
Daniel Ritchie
They were smaller, they probably were in it around 5-6 thousand square feet. They weren’t huge stores, you know, maybe stretching to 10,000 square feet in some cases but they weren’t big stores. And they were definitely not big stores.
Craig Patterson
And today all the Holt Renfrew stores are quite big. I think the smallest one is about 130,000 square feet, at least in gross square footage. And I think that’s the Yorkdale store in Toronto. still big. Yeah.
Daniel Ritchie
And well, considering that it’s their biggest volume, the productivity per square foot is really, and pretty good in in a place like Yorkdale, isn’t it?
Craig Patterson
Sure is. And after Holt Renfrew, you left in 1993. You went on to become VP of Operations at Bretton’s.
Daniel Ritchie
I was there for a short time, there were a number of people that were at Bretton’s too,or in the Etac group. One of them I had a really great relationship with his name was Alfred Chan. And he owned Etac Sales with his brother. And Etac Sales was an Importer Exporter kind of business is not at the high end and the low end, but he had bought Ports International from the family that owned it and was running that and then he bought brands and couldn’t figure out then, you know, Alfred was the kind of guy who would buy something and then try and figure out what to do with it. So it wasn’t strategic. It was it was just kind of let’s have a bigger piece of the pie. So at the time I went there, he had brought in Don Evans and I don’t know if you knew Don Evans, he was the president of TipTop for years and years and years. Anyway, Alfred brought him in. And you know, it wasn’t too long before the parent company got itself into a massive amount of trouble. And we, you know, the divisions I’ll just start up falling like dominoes, whether it was Ports or Tabi. At the time, it was also part of the group, or others, it just didn’t have a happy ending. He had bought Bretton’s from the C&A group. Because they could never make it work. It ended up being for them, just a store full of their own brands. And you know, over time, that’s not what the customer was looking for. They didn’t want another place where they would just go and buy things they could get down the mall and kind of freestanding store. So the timeframe there was really short. I worked with Alfred and Don on trying to reestablish Bretton’s and then I worked with the receivers on trying to sell it and then eventually with the with the liquidator to get the best amount of money out of the assets that we possibly could. But it was it was too bad really because I think at the time the country could have supported something that was that bridge between department store and and specialty store. I don’t know where that market is even is today. To be honest, I don’t think it exists in the same way that it did then. And what we’ve seen is not just that go away, but the entire mass market of middle mid market of department stores doesn’t exist anymore.
Craig Patterson
Yeah, I remember Bretton’s being a teenager, I bought my Alfred Sung jeans on sale you know but they had a area for fragrances I remember including for men. They didn’t have seem to have a lot of footwear but it was very much a fashion store I think.
Daniel Ritchie
Oh yeah. It was a fashion store we had we had all the brands that we needed in that market but it maybe just wasn’t special enough for the right people to shop at and we definitely couldn’t sell it to anybody. We tried a number of suitors but I think at the end they were more tire kickers just to try and figure out what was going on in business and actually serious purchasers.
Craig Patterson
And the locations were interesting for Bretton’s which started in Ottawa. I’m just going by memory from being younger and doing some research of course as well. Yeah, there was one at the Manulife Centre in Toronto, but there was like Metropolis at Metrotown in Burnaby in the Vancouver area. We had West Edmonton Mall Calgary had Market Mall. I’m trying to remember now.
Daniel Ritchie
Oh Calgary was Chinook, Yeah, but what what what they were looking at at the time was trying to identify by market where the right customer was that Holt Renfrew wasn’t, so in Ottawa Rideau Centre far away enough from Sparks Street and then there was a second store in St. Laurent mall to capture that suburban market. When it came to Toronto, the first store here was actually Promenade and it opened before Bloor street did a couple of years before Bloor street did, Bloor Street was a suicide mission from the beginning. Nobody ever expected that store was going to survive and it didn’t. And it sucked dry a lot of money from the rest of the chain. But yes Chinook again, Holt Renfrew had left Chinook. So there was a theory that there was an opening there, Vancouver at the time, there really was nothing available at the downtown core. It was pretty tight. So the thought was let’s go out to Burnaby to Metrotown and that’s where the store ended up. But all those stores were in place by the time I arrived. You know, like the, the beginning of the end, not the end of the beginning.
Craig Patterson
Do you remember Creed’s was in the same shopping centre as Bretton’s the at the Manulife Center in Toronto?
Daniel Ritchie
Creed’s was the big competition to Holts on Bloor street and Creed’s, they lived and died also on the fur trade. And, you know, their business started to get really tough when furs really became not very popular anymore. And they they were running a massive fur storage business that over a few years evaporated. So yeah, it was a great business, a great family. They’re still around doing a few things here and there. But I don’t think that Bretton’s was ever a challenge to Creed’s or, you know, just would have been a completely different customer. I could imagine the Creed’s customer who was probably a little more tony even than Holt Renfrew. I couldn’t imagine them going into a Bretton’s store ever.
Craig Patterson
How did Holts and Creeds interact off of each other, or in terms of consumers with Creed’s being almost the the fancier store, at the time there was Chanel and a few of the other brands like Valentino. I think that Creed’s might have had things locked up for a little bit there compared to Holts maybe.
Daniel Ritchie
it was a similar challenge to what Holts had in Vancouver, the brands that they really coveted —they couldn’t get because Creeds had them. And then, you know, at a certain point, Holts tried to build a different proposition to go after things like Ralph Lauren, you know, the top of the range and built a huge Ralph Lauren boutique. So there, there were challenges there. As you say, the Creeds had all the big name brands. So it was difficult. And I think one of the things folks did and did well, was that they had the fashion eye to be able to identify what the up and coming brands were. So you know, getting in on the ground floor with with some of those people made a huge difference.
Craig Patterson
Yeah, and also, we had a recession, 90-91 and Creed’s shut, we lost a lot of stores at the Hazelton Lanes as well, which was probably one of the world’s top luxury malls, at least in terms of the brands that were available there. From the late 70s, I think until the early 90s.
Daniel Ritchie
I mean, it’s the whole downtown phenomenon. It’s not just what it’s not really just one thing, I think you have an over stored situation for the customer profile you’re chasing, but I think that it’s become really difficult to shop downtown. You know, you look at trying to access some of the stores along that to, you know, billion dollar mile or whatever they call it on Bloor Street. And it’s, it’s a challenge is to find parking, it’s a challenge to to find a point of difference somewhere where you want to be that you feel you want to be that you don’t have to trudge from store to store in the heat of the summer or the freezing cold of the snowy winters. So you know that that whole that whole downtown find I find so different than it used to be. And you’ll look at some of the things that are popped up along the Bloor Street. You know, Fabricland is coming.
Craig Patterson
It’s open. I went to the opening.
Daniel Ritchie
Right Fabricland on Bloor Street across from Holt Renfrew. I think that’s hilarious.
Craig Patterson
It was a fun tour. But it’s not the right location for that retailer. I agree completely.
Daniel Ritchie
No I can’t imagine who’s gonna go shop there unless, unless you’ve got young kids who are in fashion school or like to sew and they go to Holts. And they remember what they saw and run across the street and buy the Fabric to make it themselves but it’s a weird place for them to be I’m sure there’s a real estate play going on. But it’s bizarre.
Craig Patterson
Yeah, let’s talk about Dylex next. You were working I think more with TipTop tailors because there was a CCAA situation right?
Daniel Ritchie
Yeah, I was VP opposite the Top. We were in the process of trying to reinvent the business by cutting down layers of management. I think when I got there, they were underneath in my in my A portfolio, there were 160 or 108 stores. So it was way over stored. We didn’t really have a great handle on stores that should be closed because of, you know, losses. And then when we did, sometimes we were tied into the lease because of the corporation more than the brand. So, you know, we had to be there because it was good for Fairweather and Biway and whoever else was there at the time. So that was a challenge. But in my portfolio, I had three regional managers, and each regional manager had about eight or 10 district managers. And then by the time you narrowed it down, you ended up with a situation where each store manager, each district manager had maybe three to five shops to manage, which really meant that a store manager wasn’t making any decisions, they were just there. So what we tried to do was blow that all away. And we went from this massive structure to just having eight regional managers across the country and nobody below them. So each one of them then had between 15 and 20 stores. And then the store managers really had to go on this massive reeducation program. So that they would have the skill set to actually run a business. So that was, it was a lot of fun. And I know that it was the beginning of a great turnaround. But again, with Tip Top, we struggled because the top of the pyramid fell down. And you know, it was it was a really sad ending because I know of one senior corporate executive who actually took his own life because his savings were completely wiped out. He had nothing he went from being somebody with, you know, great home in Toronto and cottage, cottage country and all sorts of things, to having absolutely nothing to his name. And he couldn’t cope with it. And you know, when those things happen, it really drives home, the reality have lots of different things, but you know, the humanity of it, but also, you know, if there’s a lesson in it, the lesson is, you know, eggs in one basket, not really is not a good idea. So, again, I worked with the liquidator there because of the experience I’d had, the president of Tip Top actually said to me, You know what, you’ve got a handle on all this work. So even though there’s the CFO, I’m gonna get you to run the cash flow, because you know how to do it and you know how to get money out of the liquidator. The court appointed monitors they were at that point. And you know how to to forecast what cash we need, what cash we have what so I was actually doing all of that work was a lot of fun. But at the same time I was being courted by Nuance which was Allders at the time to go and run their merchandising team. But 95 but not not being sure where the Tip Top thing was gonna fall out. Especially after the Bretton’s experience, I thought it made more sense for me to take an opportunity when it was in front of me. And I wasn’t at Allders for more than six months when Nuance came along and bought the business. So that changed things dramatically, because at the time Allders Duty Free was was a joint venture between Allders department stores in the UK, and an engineering firm in Canada who really had no skin in the business except for money. And, and because you needed a partner, foreign companies couldn’t own businesses in Canada back in those days, you had to have a Canadian majority shareholder. So they found someone who was completely disinterested in the actual running of the business. And it was an engineering firm from Mississauga. And they were the majority shareholder. So what was curious was that some of the people in the team worked for the Canadian business, like my team of people worked for the Canadian business, but I actually worked for the UK. And at the time, when that divorce happened, and Nuance was coming in, there was a massive due diligence project and my office was deemed to be the soil of the Brits, and not of the Canadian team. So all the confidential documents and everything were in my office surrounded me and boxes until all that due diligence took place and things shook out. But it was it was a tough situation because it was one of those things where a a fish swallowed a whale. And then the whale said great, you know, because nuance at the time was a very tiny player, they bought this massive duty free business. And they bought it on the basis that there was going to be all kinds of economies of scale of this global business. And they never really materialized. So it, it was a challenge. And I know that it actually brought down the CEO at the time, but it’s ready deaf, long, crazy Swiss guy loved him, absolutely loved him. But you know, the business just didn’t have enough direction. We worked on all of these committees and groups and different project teams where we were looking for ways to save money and, and get more margin from suppliers and all that sort of thing. And it just never happened. The assumptions before they bought the business, we’re not very good.
Craig Patterson
That is so interesting. The first time I ever heard of Allders actually, were the first time I ever saw something was I’m not joking, an episode of Mr. Bean when I was younger, it’s where Mr. Bean is crawling to the cosmetic section kind of choking, whatever. So I knew as a kid, when I saw that there was an Allders duty free store in Vancouver was the same name in the same logo. And I was quite confused. Of course, they became Nuance duty free. The stores were in I think, Vancouver at the airport and downtown. Were they in Toronto at all? Do you remember? I don’t remember back then. No.
Daniel Ritchie
We had Pearson Airport as well. And we had Calgary. Okay. So and we had we had satellite stores and Banff, for example. So yeah, it was, it was across Canada. But we also were running the US business. So we had the Las Vegas airport, we had concessions at the Boston Airport at Logan. But our biggest US business, which was really quite interesting was the cruise ship business. And we had big, vital lines like Holland America and Celebrity. And we, we ran all the shops on board. So all of the people working in the stores on the retail, in the retail shops on the cruise ship worked for us. And that was that was a fun part of doing store visits, because you would get on one port. And they are only allowed to open when they’re at sea. So if you want to see a shopping operation, you can’t do it from a dock, you have to you have to sail, which was such a hardship. So you just walk around, get on in in Fort Lauderdale and jump off in the Bahamas or, you know, jump on the Bahamas and jump off into Puerto Rico or whatever. And so that was a lot of fun, a really tough business because just like an airport, retail, the margins, the rent margins are so ridiculously high, what you’ve got to promise in order to get the contract leaves you like pennies on the dollar to kind of squeeze out. And if you can’t squeeze them out, you’re gonna lose a lot of money.
Craig Patterson
Now with duty free in Vancouver, there was there was a big Duty Free Store in downtown Vancouver that closed in the early 2000s. It was actually I think, at that point being run by Aldeasa the Spanish group which had bought out Nuance and had fired everybody I know because I know they fired the store manager because he’s good friend of mine. But let’s talk about downtown Vancouver for a moment because things have changed with duty free, we don’t have stores in Banff anymore. You know, I don’t know if the laws changed me any insight into that?
Daniel Ritchie
I think the customer behaviour has changed. And I think that you know, back in the day, we used to get the the most lucrative customer group which were the Japanese tourists, and they Japanese tourists don’t wander. They don’t do things on their own. They’re not what we call independent packs. They are tour group packs. So they stay as a group. They go everywhere as a group, whether it’s the hotel, the restaurants, the shopping, the entertainment, they do it all together a bus loaded at a time. So what I think what’s happened over time, is a number of things. First of all, the prices will really good in Canada for a Japanese consumer, because there was a level of distribution in Japan that had layer on layer on layer on layer that made things really expensive. And the Japanese renovated their economy back in the late 90s, early 2000s to take a lot of those layers and so suddenly, goods were not as wildly advantageous to them from a price point of view. Second thing that happened was that the younger Japanese consumer was becoming more independent and they didn’t want I have to shop in these big groups and go on the bus and everything else. So, you know, when they started venturing out on the road, the world change, then whereas back in the day you had people that came to Vancouver, they spent a couple of days in Vancouver. Then they would be bused to or flown to Calgary. They would do Lake Louise and Banff back to Calgary and then back to Japan and or vice versa of Calgary and then Vancouver didn’t matter. But that golden triangle suddenly started to become more about Seattle, San Francisco, Los Angeles, Japanese tourists started going into places where they never really went before. And I think the biggest benefactor of that was Las Vegas. And you saw this massive influx of Japanese tourists into Las Vegas. So as the customer changed, I think the need for having a store massively expensive store in downtown Vancouver became less obvious. So, you know, over time, it just just didn’t didn’t really have a place anymore.
Craig Patterson
And I have some bizarre insider information too, there was a lawsuit, I try to remember everything that was involved. But the gist of it was a tour bus parking spot in front of the Duty Free Store was taken out. And this had a profound impact on sales because there were tour groups, they ended up started coming from China after the Japanese. I think the sales at that store went from over $70 million dollars a year to something like $3.2 million.
Daniel Ritchie
That was when I was there, that still was a $50 million store. Yeah, it was it was by far the biggest thing that Allders had in their group as an individual unit. Some of the the Australian stores were good, too. They had they had Sydney and Brisbane. And they were great. But they have multiple stores in those locations. So individually, they didn’t have one that was as big as you know, the and the other place we had, which was really hilarious was we had Washington DC, the International airport terminal, but we also had a downtown store in Washington. And it was a completely different focus because it wasn’t Japanese it was Koreans and all they wanted were Burberry raincoats. So we used to have to make sure that we had this massive selection of Burberry raincoats when the Koreans showed up, because that’s what they wanted. But it just shows you how much is driven by consumer behaviour. And in some ways there are things you can do to mitigate the changes and go with them. In other ways, you just can’t. So the business morphs around you and you can’t do anything about it.
Craig Patterson
Interesting, interesting, though, I remember, in Vancouver, it may have been around the time that I think it was around the time you were there. DFS duty free. I think it’s actually part of LVMH now but had opened a store in the Carlyle, which is now a luxury shopping center towards Alberni and Thurlow streets, but I don’t think it got a license. Do you remember anything about that?
Daniel Ritchie
No, they hadn’t opened when I was there. But their idea was to open and have it as a duty paid shop, and just trade off their name. Because you know, at the time, DFS was huge and huge in the Far East. So they owned Singapore and Hong Kong and Macau. And actually a lot of Australia to the difference at the time, was that in, in some markets like Australia, you can have multiple duty free players trading against each other. In Canada, it’s an exclusive contract. So whoever wins the bid, has the exclusive rights to run the business. So it was a little bit different. But they had such a massive play in the Far East. It was just crazy. And they they also had San Francisco, they had Los Angeles. They had a big off airport store in Koreatown in LA. And they had a big store in San Francisco as well. Over time, I think those businesses have all shrunk down, but still an important part of what they do. And yes, you’re right. They are owned by LVMH, LVMH bought the business as a way to boost their beauty brands. Really same reason that Sephora was interesting.
Craig Patterson
Yeah, that is so interesting. I mean, I found the duty free interesting. I’ve been watching that for years. It seems like such a waste that DFS site the store was about 25,000 square feet on Alberni Street. It was a failure. I don’t know how long it was open for, like, I don’t know, two to three years or something. It was shocking.
Daniel Ritchie
Yeah, well, at the time, I mean, people are still price conscious. But if you could control the tour guides, you didn’t need a thing, it came down to that. But that was the thing about duty free is, first of all, the rents were extortion, then you had to pay everybody off all along the food chain, you had to pay the tour guides, bus driver, we had to pay everybody along the way. So you really had to help them with something left at the end.
Craig Patterson
Just fascinating. After duty free you got into well, I think you went into a bit of a “retirement”, but you’re never going to retire? You got some franchises for the Body Shop, right?
Daniel Ritchie
I’ve proven over time, I’m not good at retirement. So you know, and I think most people who really seriously retire are dead in six months. But yeah, I bought at a Body Shop store, one of the guys that worked for me as a regional at Tip Top. I had said to him once upon a time, you know, just keep your ear to the ground, if anything pops up, because he had gone to the Body Shop as the director of sales. So one day out of the blue, he called me, he said a store was for sale, you should probably talk to the current owner. So I did that and very quickly made a deal. I think that was in January of 1999. And by May, I had taken the store over. And I loved it because it was a chance to do my own thing, it was a chance to control my own destiny, it was a chance to get back with the customer. Again, there was nothing more invigorating than spending time on the floor, talking to the folks that came in. And it was in the heady days of the Body Shop. Business was booming, sales per square foot in Canada were the highest in the world, you made a lot of money. I mean, it was always outrageous to me that a store that did $1.4 million a year did 60% of that in four weeks at Christmas. But you know, you’ll learn a lot about how to run a business, because if you didn’t come out of Christmas strong, you wouldn’t make it to the next Christmas, you kind of had to bide your time and make sure you had enough cash to feed everybody that needed to be fed in the store. But at the time, and Anita was still there, she was still actively involved in the business. And it was when she pulled back and handed it over to other people to run and then eventually sold it to L’Oreal, that it got really, really difficult. They started to do things that they’ve never recovered from, like taking out a refill program at stores, you know, when you’ve got when you’ve got a clear point of difference and competitive advantage on the green economy. And you suddenly decide that you’re going to move away from that, it’s a really interesting, I guess, is the right move to make. And you know, it was things like that, that were the beginning of the end, I used to have a bin in stores where people would bring in their empty containers for recycle. And the business got rid of all of those things that made it unique and different. And went to more of a corporate global position. Even with product at the time, we used to have a buyer, a vessel buyer, who would go to the various trade shows, and find the right containers for us to build our gifts in every Christmas. And then we had a choice. Either we could buy our pre-made gifts in these vessels from the head office in Canada, or we can have the vessels sent to us. And we can have our own little cottage industry building them ourselves. I always bought them because they didn’t want the mess. But they took all that away. And they went from having these great containers that you could use after the fact for all sorts of different things, to having these standard boxes that all look the same and had no real character or point of difference. And, you know, the other thing that we were doing at the time, we were sourcing all of our accessories, centrally in Canada, and they took all that out and started doing it as a global proposition. We were actually bringing product into Canada and filling all the bottles here. It was all filled here in a facility at Domino’s and they took all that away and did everything centrally for North America in New Jersey and North Carolina. And it just changed the whole complexion of the brand and they went through some really tough times and I don’t think they’ve recovered. I don’t think they’ll ever recover. They just, they’ve just working on replacing the CEO, again, for Body Shop. So in the meantime, L’Oreal is brought up again, which I thought was really interesting because they screwed up the Body Shop, here we go again.
Craig Patterson
So interesting, let’s talk a bit about the Middle East, because you continue to work sort of in the beauty space, but in a different realm. Let’s talk a little bit about the Middle East, because you were saying earlier that you found some interesting learnings about how things were done differently and how to be open minded.
Daniel Ritchie
You have to go there with an open mind. And the problem with the West is that we only know what we’re told by the press and the media. And at the time, you know, the region, it’s had a bad name for a long time for various reasons. But what I discovered when I went there was I could either spend my time pointing out things that I thought they were doing wrong, or I could change my paradigm and say, it’s not really wrong. If they don’t know another way, it’s just different. So I had to look at it from a different point of view, because if you are unable to do that, you’ll never survive in that region. It’s really quite an eye opening of cultural experience. But I absolutely loved it. And I went in running the beauty halls for the company I was working with, which is the largest franchise retailer in the world running locally. And their success has really been very simple. They find brands that have an affinity to the consumers in the region. And then they bring those brands to the region make a franchise deal and just replicate. So they’re not merchants, they’re not store designers. They are property that sell for them. I mean, being able to sit down with a new development and say to the guy, we really liked them while you’re building, we’ll take 30% of the space, and then we’ll decide how to divvy that up amongst our brands. I mean, it’s not quite that simple, but it is that simple. And this This company has its arms in all different industries. So we had a massive food business with Cheesecake Factory, PF Changs, 1200 Starbucks locations in about 15 different countries. So it when I arrived there, the company had I think 15,000 employees when I left it was close to 50,000 employees. When I got there, the company had about 35 brands that it represented in the region. When I left it was about 75 brands. And I had a couple of roles. One is to run the beauty halls and at the time, we had the franchise rights for Penhaligon’s. And in fact, it’s the only place in the world that I’m aware of is still running bricks and mortar because they made a deal with the new owners to just keep going. Whereas in the UK, it’s an online business only. And then we had Harvey Nicholas, for example. And then we had a standalone perfumery chain that was competing with Sephora at the time. But part of my role, which became really exciting was to find brands that we would bring and open freestanding stores for like Charlotte Tilbury, like NYX, which was very popular, and a host of others. And one of the brands that I found on my journey was Dr. Vranjes and we brought it to the region and started opening stores for it. Of course, if you know that consumer in the Middle East, fragrance is what it’s all about. I mean, people here would laugh when I tell them that 65% of my sales were fragrance in the beauty aisle, whereas here, they’d be lucky to be 20% of sales. You know, it’s here, it’s more about skincare, and then makeup. In the Middle East. It was it was about 65% was fragrance. And then you had a makeup business of 20 or 30%. And then you have five to 10% which was skincare. And people would say to me, Well, you know, the conditions there, why would they not be more engaged in skincare regimes? Simple because they’re never outside. They go from the house to the car, to the mall and back again. So in the Middle East when in Kuwait, it’s 55 degrees in the summer. You’re not at walking, just not done. So you have that aspect of it. And then the other aspect which is becoming less of an issue, but certainly in 2010 was in its prime people, the women they’re covered up, especially in places like Saudi Arabia. So, you know, between not being outside and being covered up, they didn’t really feel the same kind of need to take on a skincare regime. That’s changing now, because, you know, they’re catching up with where everybody else is, particularly because they spend more time on their mobile phones on Twitter. The highest usage of Twitter per capita in the world is Saudi Arabia. Most people don’t know that. But there’s nothing else to do. So that’s what they do. Their entertainment is all about connecting online. So yeah, great, great opportunity. I brought a lot of brands to the region. And after I came back to Canada, they contacted me to say, hey, we don’t have anybody in Canada, would you be interested in taking the brand on so I didn’t have to think too hard. I jumped on it pretty quickly got up and running pretty quickly. We’re about 18 months in distribution in Canada now. And we have three online channels, and one of which is our own website, we have Amazon and The Bay. But we also have 16 retail partners across Canada, in major cities in Vancouver, Montreal, and Toronto. So we’re in the process of looking for more of those. And you can never have too many retail partners if they know what to do with your brand. So we’re actively looking for more retail distribution at the same time actively growing our own website business because obviously that’s where the margin is.
Craig Patterson
And tell me a bit about the products because I even have a couple of them. There’s everything from from the home you’ve got kind of diffusers are telling you a bit about you’ll be able to describe it better than I will be able to.
Daniel Ritchie
We’re broken down into three major categories. We have our diffuser line, which starts with 100 ml refill, sorry, 100 ml room spray. And then we’ve got an assortment of diffusers that start at 250 ml and go up to 5000 ml. So that’s really meant for big spaces. And then the second category that we dance around it is candles. And again, our candles start from a very small 80 gram candle all the way up to a six kilogram candle, which is massive again. And then our third category that we’re doing in Canada is car paraffin, which is a diffuser for your car. We have 14 different scents that we carry in Canada, we’ve got the most popular ones. And the scents are broken down into two categories. There’s what we call collection. And then traditional, we have three collection fragrances that tend to be about 20% more money than the traditional. And then we have 11 in the traditional range. And the brand is constantly developing and growing. And we have some very interesting points of difference. I think the biggest one for me is that we have a refill program. So with some of our competition, you buy a diffuser. And when it’s empty, you have to throw it out and buy a new one. With ours, you can buy a refill and just keep topping it up. And every time you buy a refill, we give you a new set of wick sticks. So your thing always looks fresh, your diffuser looks fresh, it performs better, it looks better. And then we also have aside from the refill program, we have a gift set program. And we traditionally do gift sets in two ways. We have a holiday assortment, and we have an everyday so we’ve got something for everybody really, at really good prices. And you know, our opening price point for a diffuser is $110. It’s not a lot of money if you consider the value you get out of it. And the refill is half half the price for that container so it’s not not that it’s half the price. It’s double the amount of liquid. So for for almost the same price that you’re paying for the diffuser. So that works that works out well for us and we we see big things ahead.
Craig Patterson
Excellent and yes, like you said you’re looking for more retailers in Canada in terms of distribution so we’ll have some links in the show notes. What’s the best way for people to get in contact with you including retailers interested in carrying the line?
Daniel Ritchie
Best way would be through the website. And the the magical thing is that this is the 40th anniversary of the brand. So it’s been around for a while not in Canada, but in the US for sure. Big in the Far East, big in the Middle East. And pretty big in in Europe, primarily Italy, France, Spain, and in the UK. Where are you expected to be? So, I’m really excited about what we’ve created so far. And I think the next little while we’re gonna just explode. It’s a category, Craig that I find is really on trend. It got goosed a lot by COVID because people found new ways of doing lots of different things. But people stay home more frequently now. They entertain at home more frequently now. So our products are great to give that atmosphere to your home. They’re also great as hostess gifts, you know to bring somebody a diffuser or a gift set or a candle. It’s just really easy to do.
Craig Patterson
Thank you so much again, Daniel Ritchie, for joining us today.
Daniel Ritchie
Thank you for your time.
Craig Patterson
And thank you so much, everyone. Whether or not you’re watching this on our YouTube channel or listening to this and one of our podcast channels. I’m Craig Patterson. I’m the founder and the publisher and CEO of Retail Insider Media. Thank you so much again for joining us here today. Take care and bye for now.
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