How I made Barratts shine again
Michael Ziff rescued his family business from administration last year.
New-look: Barratts chief executive Michael Ziff is overseeing a major rebranding of the family-run shoe chain
When retail veteran Michael Ziff's Stylo - the shoe group which owned Barratts and Priceless Shoes - went into administration last year, he admits it was one of the most horrific experiences of his life. But some 12 months on and Mr Ziff, who brought the family-run footwear chains out of administration, is confident the business will bounce back to become the UK's leading family footwear retailer.
Mr Ziff, 56, has since rebranded and refocused the group - now called Barratts Priceless Ltd - and closed 220 shops. There are now 100 Barratts and 85 Priceless shops, and more than 300 concessions. "We now have a much better business, which is profitable, cash generative and much smaller - tighter, leaner and easier to operate," says Mr Ziff, who describes himself as shoe salesman and chief executive of the group.
This week (March 25), the group's new-look flagship store, in London's Oxford Street, re-opened.
But the trauma of the restructuring is not far from his thoughts. Speaking to the JC from his Oxford Street office, he recalls: "At the end of the day, we have a business - and it may be stronger in terms of profitability than what we had before - but we have been through a very traumatic experience.
Bouncing back: Michael Ziff
"This is something I would never ever want anybody to go through again." Mr Ziff, who was forced to cut 2,500 jobs from a workforce of 6,000, adds: "I still get letters from people asking if they I have a job for them." The experience took its toll on the father-of-three, who says he lost a lot of weight and did not take a holiday for two years.
Mr Ziff paid tribute to his close friend and colleague Sir Philip Green, the owner of Arcadia, for his support. "A large part our business is with Arcadia and they were very supportive of us during the administration. We have a continued relationship with them."
He speaks regularly to Ian Grabiner, Arcadia's chief executive, and Sir Philip.
Founded in 1935, the Yorkshire-based Stylo, which bought Barratts in 1964 and Priceless in 1994, was forced into administration in January last year due to "a large number of circumstances. I would put it down to poor management, bad buying of stock and not knowing who our customer was." The group had several under-performing stores in "dreadful locations", notably smaller-town sites that did not reach the levels of turnover that justified them being there. This, combined with underinvestment in the business, a high-interest loan - at 11.5 per cent - and competition from e-commerce, left the group in trouble.
Stylo originally planned to put Barratts and Priceless into a company voluntary arrangement (CVA), an insolvency procedure which allows a financially troubled company to reach a binding agreement with its creditors about payment of all, or part of, its debts over an agreed period of time. However, the plan was rejected by landlords unwilling to agree to lower rental payments
Mr Ziff's concern now? Employing a strategy to ensure the group becomes the leading family footwear retailer and exceeds customer's expectations. .
He quotes the "fantastic advice" given to him by Philip Green and others. "They said: 'the first cut is the hardest cut. Cut lean and mean to start with.' When I now look at the companies that went into administration for a second time, they didn't drop many shops. I got through the problem of ego and being big, and thought, actually I would rather be small and beautiful. Our annual turnover only dropped from around £260 million to £200 million. We cut our cloth to what we could afford."
The focus is on rebranding, new shop designs, stocking more internal brands, plus a strong internal training drive. The site in Sheffield's Meadowhall shopping centre was the first "new-look" store. It is 30 per cent up on like for like sales since the refit.
Commenting on the retail landscape in general, Mr Ziff, who divides his working week between Yorkshire and London, says he was surprised by the way in which some chains coped in the recession. "What surprises me - and god forbid it should happen to us - is those retailers that have gone for the second time."
Barratts Priceless operates the business with cash for part of the year and, during peak periods, borrows from Lloyds bank. He says: "I think it's going to be a long, hard slog. This is worse than anything I have seen before."
Born in Leeds, Mr Ziff is now based in St John's Wood, north London. Outside of work he is an avid Leeds United fan and plays cricket for Vale, a Jewish team. He co-chaired last year's Team Great Britain cricket Maccabiah. He is also chair of the British-Israel Chamber of Commerce. A member of Marble Arch Synagogue, he likes to go to shul on Saturday mornings before visiting his stores in Oxford Street.
"The manager there knows I see him between 11.50 and 12.30 - he says it depends on the standard of the Kiddush."