87 Lancaster Road
The Future: Monsoon's dedicated team are committed to the continuing development of the Monsoon product ranges. They plan to grow the company further through continuing expansion in the UK and Ireland, combined with careful expansion overseas, involving joint ventures and co-owned outlets. A key factor in Monsoon's success to date is that it is both people and product focused. The Monsoon team believe that this approach will continue to be a strategic driver in the future and are determined to maintain this distinctive company orientation.
Monsoon plc is a leading women's clothing and accessories retailer in the United Kingdom, operating three retail store concepts. The company's flagship retail store is its chain of some 150 and growing Monsoon clothing stores, nearly all of which operate in the United Kingdom in Ireland. Monsoon has built up a loyal following in its core U.K. market, which represents more than 90 percent of company sales, with its Asia-inspired designs and colors offering customers what Monsoon calls 'delux bo-ho chic.' Monsoon's fastest-growing chain is its Accessorize retail store and in-store boutique formats featuring home designs and other goods inspired by the company's clothing collections. Launched in the mid-1980s, Accessorize has overtaken the Monsoon chain in number of store openings, reaching more than 130 stores; many Monsoon stores also feature Accessorize in-store boutiques. Accessorize generates some 40 percent of the company's annual sales. Monsoon's third store concept is Monsoon Home, launched in 1999. The company plans to open a series of stand-alone stores under this format, as well as including Monsoon Home boutiques in its larger stores. To accommodate its growing variety of goods, the company has been moving a number of its key stores to new and larger locations. In a difficult retail climate, Monsoon also has been attempting to shore up sales growth by refining the Monsoon format, cutting back on the number of items available in order to increase the stores' clarity. The company also has suggested that it intends to double its network of U.K. stores by 2002. At the same time, Monsoon has been targeting an ambitious international expansion in order to secure its future growth, favoring a franchising concept over extending its company-owned stores. The company intends to achieve this foreign expansion through lower-risk franchise agreements, in a number of primarily smaller European markets, including Greece, Iceland, and Malta. In October 2000, the company set up a joint venture with the United States' Charming Shoppes to bring the Monsoon and Accessorize names to that market. The company is seeking similar franchise and partnership agreements in order to enter the larger European retail markets as well. Monsoon continues to be led by founder, chairman, and majority shareholder Peter Simon and managing director John Spooner.
Hippie Retail Magnate in the 1970s
Peter Simon began his retail career as a fishfinger salesman at a stall in the Portobello Road market in London during the waning days of the Woodstock era. A self-described hippy, Simon was also a traveler, and it was during a trip to India that Simon decided to turn toward the retail clothing market. Returning from that trip, Simon brought with him a supply of clothing. The quick turnover of brightly colored designs encouraged Simon to look for more clothing fashions from the eastern and Asian markets. On a trip to the island of Gobo, near Malta, Simon discovered the 'shoat,' a cross between a sheep and a goat. Working with locals, Simon began producing coats made of the shaggy wool and importing them to his London stall.
Sales of the shoat coats inspired Simon to quit the marketplace and open a full-fledged retail shop in Beauchamp Place in the Knightsbridge area of London in 1973. Simon chose the name of Monsoon for his company, recalling his own birth during a monsoon in Sri Lanka. In addition to the shoat coats, the new store featured other clothing items imported from primarily Asian sources. The company also began designing its own fashions, sticking to Asian-inspired designs and natural materials, while developing its own distinctive styles and colors and incorporating techniques ranging from embroidery and batik to beading. The company caught on with London customers, and Monsoon began opening new stores, at first in London and then later throughout the United Kingdom and Ireland.
Changing fashion trends led the company to adapt, moving its growing number of stores into a more up-market bracket and evolving its clothing into more sophisticated designs. The company was later to describe its fashions as 'deluxe bo-ho chic.' Yet the company's ethnic-inspired origins remained the centerpoint of its designs and retail ambiance. At the same time, Monsoon remained committed to using natural fibers, while also being among the first retailers to adopt stricter requirements from its producers for their working conditions.
Monsoon's growth led Simon to expand the company's management, bringing in Andrew May, who became the company's finance director, in 1981, and John Spooner, who joined the company in 1984, becoming managing director. Monsoon was ready to extend its retail offerings with a new retail concept. Launched in 1984, Accessorize offered a new product range, featuring home furnishings, accessories, and jewelry, incorporating Monsoon's ethic-inspired design feel. The first Accessorize opened in Covent Garden Plaza in London. Its quick success among shoppers led Monsoon to open more Accessorize stores, while adding Accessorize boutiques into some of its Monsoon stores.
The second Accessorize opened in 1986, on famed London fashions street Carnaby St. After adding several more Accessorize stores in the London area, the chain was ready to follow the Monsoon retail chain into other markets in the United Kingdom. In 1992, the company opened an Accessorize store in Manchester, its first outside of London. In that same year, the company proved the flexibility of the Accessorize format when it opened a shop at Gatwick airport. By then, the company's Monsoon chain had neared 60 stores.
International Expansion for the 21st Century
Monsoon's mood was buoyant in the early 1990s, despite the extended economic recession of the period. In 1992 the company prepared a new and massive expansion program that was to transform the company into a leading retailer in the United Kingdom. Monsoon stepped up its rate of store openings, boosting both Monsoon and Accessorize formats. The latter received extra attention from Monsoon, with the company opening some 16 Accessorize stores per year starting with the 1992 year. Parallel to the company's expansion was the sale by Simon of two-thirds of the company's shares to an investment trust, Sycamore Trust, based in Malta.
Into the mid-1990s, Monsoon continued to build up its retail empire. The Monsoon chain continued to lead the company's revenues, as the number of stores reached 84 in the United Kingdom. Monsoon also made its first international moves, opening company-owned stores in the United States, Iceland, Gibraltar, Australia, and a number of European markets. By 1996, the company had 13 foreign stores, a number that was nearly to double in less than a year. Accessorize's growth paralleled the Monsoon chain, reaching 52 stores by mid-1996. The company also had seen steady gains in sales growth, reaching £62.1 million for 1996, and had more than a decade of unbroken growth in its profits.
Monsoon then announced that it would seek a listing on the London stock market by the end of the 1996 summer. The purpose of the listing, which was to take the form of a placement among institutional investors, was to enable the company's majority shareholder, Sycamore Trust, to cash in on some of its shares. Simon himself was not selling any of his remaining one-third of the company's shares. Yet the listing quickly derailed. Claiming that it was unable to determine the identity of the beneficiaries of the initial public offering (IPO)&mdash Sycamore Trust refused to give out information about itself--the IPO's broker, BZW, pulled out of the proposed listing, amid Simon's assertion that he had no connection with Sycamore Trust. Nevertheless, Simon admitted to the Daily Telegraph, 'Myself and my family were not beneficiaries. But there were certain circumstances under which me and my family could have benefited from it.'
Monsoon continued expanding both of its retail networks as it prepared a new attempt at a stock listing. By the end of 1997, the company had boosted the Monsoon chain to 127 stores, including 24 foreign stores, while the Accessorize chain jumped to 76 stand-alone stores and another 103 Accessorize boutiques located within most of the Monsoon stores. With sales continuing to increase, jumping from £79.56 million in 1996 to £107.9 million in 1997, and with net profits growing to £15 million, Monsoon was ready to try again for a public offering.
The company finally came to the London stock exchange in 1998, after the Sycamore Trust's stake in the company was acquired by trusts set up in Guernsey by Simon and his family. Now holding 96 percent of Monsoon, Simon raised eyebrows anew when he admitted that the listing was being made despite the fact that Monsoon was not seeking to raise new capital for expansion--its growth, traditionally, had been financed organically. Many analysts complained that, as the Daily Telegraph suggested, Simon had 'failed to come up with a convincing reason for selling his shares.' Others proposed that Simon, worried about possible downturns in the retail climate, hoped to cash out on some of his shares while the retail market was still at its peak. Undaunted by these criticisms, the company's flotation went ahead, fetching a premium price of 198.6 pence for each of the 44.6 million shares on offer--worth about 25 percent of the company, and, at a massive multiple of 18, valuing the company at nearly £350 million. Simon's gain from the offering, which took the form of a placement among institutional investors in February 1998, was valued at £88 million.
Less than one year later, Monsoon's shares had dropped some 75 percent of their value. While the company's share fortunes were battered by a growing pessimism about the United Kingdom's retail climate (many feared the advent of a new recession as economic crises rocked the Asian, Russian, and South American economies) Monsoon itself added to its troubles at the end of its 1999 year when it announced its first profits slip in 13 years. Despite growing sales, to £132 million, the company's profits had dropped to £20 million, from £27 million one year earlier.
To improve its sales, Monsoon set out revitalizing its stores, streamlining the Monsoon stores' product offering to add more clarity for its customers. The company also began a series of moves to transform its clothing designs, moving toward higher quality tailoring and closer-fitting garments, while also extending its range of sizes to attract a wider customer base. After rolling out its first Monsoon Home the company also began targeting international expansion of both the Monsoon and Accessorize brand names as a company priority. Seeking to avoid the costly capital investment necessary to establish its own stores internationally, however, Monsoon announced its intention to seek partners for its existing foreign stores and to concentrate future international growth through franchise and partnership agreements. A first Accessorize store, which opened in Athens, Greece, showed the company's international promise, outperforming all of the company's U.K. stores.
Monsoon attempted to bring its successful retail formula to the World Wide Web in 2000, opening an e-commerce-capable web site. The company hoped to build up yearly sales to that of one of its bricks-and-mortar stores. Yet the site's sales quickly proved a disappointment, as the company recognized that its customers preferred the physical experience of in-store shopping. By the beginning of 2001, the company announced that it was pulling the plug on its e-commerce operation, using its web pages instead as a promotional site.
Nevertheless, Monsoon closed its 2000 year with renewed growth in its net profits and continued revenue gains. By the beginning of 2001, the company was promising to continue to build up its strong Monsoon and Accessorize brands, doubling its number of stores in the United Kingdom and Ireland over the next two or three years. At the same time, Monsoon hoped to establish its two brands as leading retail names throughout the world. A major part of this goal got under way in October 2000 when the company formed a joint venture with the United States' Charming Shoppes to open 20 Monsoon branded stores in the U.S. market.
Principal Subsidiaries: Monsoon Holdings Ltd; Monsoon Accessorize Ltd.; Monsoon of London Pty Ltd (Australia); Monsoon Coordination Services Ltd (Hong Kong); Monsoon Twilight Inc. (U.S.); Monsoon SARL (France); Monsoon Accessorize ApS (Denmark); Brands Exploitation Ltd (Malta).
Principal Competitors: Arcadia Group plc; ASDA Group Limited; Debenhams plc; The Great Universal Stores plc; Harrods Holdings; House of Fraser plc; James Beattie plc; John Lewis Partnership plc; Marks and Spencer plc; Matalan plc; N Brown Group plc; New Look Plc; NEXT plc; Otto Versand Gmbh & Co.; Selfridges plc; Storehouse plc.
Comment about this article, ask questions, or add new information about this topic: