Justin Stead, CEO of Radley, on how a successful global strategy balances boldness with caution, the value of listening to others, and why it’s crucial to believe in your business’s story.
Radley is a British handbags and accessories brand which was acquired by Justin, Don McCarthy and his Private-Equity investment partners, Freshstream, 2016. It has since established a concentrated global strategy. Radley’s revenues were £75m in 2016 and will be £100m in 2019. US retail sales will exceed US$35m in 2019 from a standing start in September 2017.
When I was approached about the Radley CEO role, it intrigued me. The business had gone through a transitional period where it hadn’t been as successful, but I liked where Radley had come from and I saw the opportunity for rejuvenation, from the operations through to the brand.
At heart, CEOs set vision, strategy and team structure, but essentially they are storytellers, and Radley is a great renaissance story. But you need to be very clear about where you want to take that story next. I’ve worked around the world for 30 years and believed that the Radley story could go global. However, when we acquired the business, our focus for the whole of the first year was getting back to basics – fully understanding Radley’s strengths and weaknesses and making sure all parts of the business could align to a global strategy.
The business was, in fact, already operating in multiple international markets, but we felt these were inherited and the set-up, structure and approach was inefficient and lacking focus. So we closed some markets down and started again with a concentrated strategy based on technical analysis of the market and our own hard-earned experience.
“One important aspect of our strategy was to take a low-cost but targeted approach to the US.”
Justin Stead, CEO, Radley
We ended up focusing primarily on three markets; US, China and Australia. As a dual US and Australian citizen, and having worked in the US for 20 years, I knew that, if we got our positioning right, we could be hugely successful. Radley had already tried and failed to win the American market but I felt we could execute things differently.
One important aspect to our global strategy was that we took a low cost but targeted approach to the US. So, if it wasn’t successful, we weren’t going to lose the ranch. In that context, we committed to three channels: Macy’s, the QVC channel and our own online e-commerce channels.
We simply had to play in China because of the size of the market, but we also knew of the Chinese consumer’s interest in Radley because of their holiday purchasing in the UK. And, although Australia is a smaller market, our core audience profile matches very well in this market and we also had strong potential partner in MYER department stores.
Diverse ways to market
Despite the current retail upheaval, it’s a brilliant time for both brands and retail because you can enter different markets in different ways. This is so different from 20 years ago, when I was wandering around the world doing business. Now you can go direct to consumers, you can go direct to retail, you can go direct in your own distribution, and you can still use traditional distributors as well.
For the US, we go direct to our partners, and we manage those partners from London, although we’re about to open an office in Dallas this August. In China, we’re digital-only through three major partners. In Australia, we’re direct to one partner, and now in Thailand we have a distributor model. But we also serve all these with our e-commerce business and it’s immensely gratifying that our international strategy has boosted online sales too.
A breakthrough moment
The first time I was absolutely sure we were on the right track was when I got a call at 4:30 in the morning from our US national sales manager. We’d had our first show on QVC and sold almost $1m of product when we were expecting half that – and had done so in 29 minutes on a 75-minute show. It confirmed that our intuition was right.
The key with going global – and any big strategic move – is to understand your own tolerance for risk. Once you know what you’re comfortable with, it’s then only a case of how hard you can work to make it a reality.
Balancing risk with caution
In my early days, I had a bit of a “ready, fire, aim” approach, with plenty of energy and few distractions. I also had a great mentor: Don McCarthy, the former executive chairman of House of Fraser. Among many things, he told me: “Enthusiasm costs money. Be careful.”
Today, I have a fantastic team and the wisdom to know that I don’t have all the answers. I trust my team so that when someone says, “Justin, let’s be cautious”, I listen.
Global growth is about bringing together many things. You need to see the opportunities, make the right partnerships, balance risk with caution and, ultimately, proceed with conviction, passion and pride in telling your story.
Justin moved to the US from Australia as a teenager on a tennis scholarship and was ranked in the NCAA top 10. He also achieved an ATP top 400 world ranking. He likes to spend his spare time with his wife and three young children, staying fit and healthy, studying Roman history, and working on the launch of his Aurelius Foundation.
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