Champneys: Stephen Purdew
How one of the UK’s most exclusive brands is planning to go to the high street
Champneys: retreat of the stars. Four luxurious country locations offering health and beauty treatments and ultimate relaxation in sprawling grounds fit for kings or queens – or at least princesses (Diana was a regular visitor). Yet, soon you'll find your very own Champneys spa on your local high street.
Once the brand of the privileged set, Champneys is reaching out to the masses, and the man behind this unpredicted nosedive down the class system, co-owner Stephen Purdew, is thoroughly embracing it. Indeed, sneering with contempt at the prospect of David Cameron as the next elected Prime Minister, he could be mistaken for having a personal quest for a classless society. “I thought we'd had enough of being run by fucking Etonians who haven't done a day's work in their lives patronising us,” he says. “He won't get my vote.”
Purdew's no Red, though. Nor is he looking to dramatically reposition the Champneys brand. His take is that he's simply opening it to more people and moving with market trends, something that he passionately maintains won't lower quality, dilute brand or drive away the big names.
Purdew's desire to unlock Champneys' doors to those less privileged perhaps owes much to his own family's rise to its helm through acquisition in 2002. His mother, Dorothy, now chairman, started the process in 1970 when, after shedding weight in a manner that impressed others, she started a slimming club that within a couple of years grew to a chain of 80. “She left school at 14, married at 25, had a child at 27 and just fancied a part-time job,” says Purdew. “She was very driven.”
Dorothy, keen to move into health farms, rented a farm in Northamptonshire in 1975, naming it Frimleys. In September 1981, she finally secured her own site at Henlow Grange, in Befordshire. The Purdews had to juggle £90,000 of debt without telling the bank, which was giving them a £180,000 loan, and sell a family home for another £90,000 to pull it off.
Purdew, who began helping out around the time of the purchase before going off “to do my own thing in accountancy” for two years, insists it was a risky acquisition. “Frimleys was a financial disaster,” he recalls. “The economic climate from '79 to '81 was tough, the finance plan didn't make sense, we had no experience of running a hotel and in '81 no one was going to health farms.”
Thatcher's 1980s changed Britain irreversibly and one cultural shift that resonated from the boom and survived the bust was the uptake of healthy living. From fluorescent shell suits to aerobics slots on break fast TV, the UK went fitness crazy – and it couldn't have come sooner for the Purdews. “Trends like Jane Fonda aerobics, healthy eating and jogging came along,” says Purdew. “At the same time, the London Marathon started. People became more health conscious, from simply wanting to lose weight in the '70s. We were part of that revolution.”
Purdew also looked at perfecting a business model that mirrored the shift. “We started the popular health farm concept,” he says. “We cut costs and instead of just being a place for the very rich, we made it more accessible. We lowered some of the pricing, but made it better value.”
Purdew concentrated on installing a high level of customer service and leading fitness and beauty treatments. “Henlow Grange's mark of quality was value,” he says. “We didn't necessarily have the facilities, but we were renowned for our service and people.”
It worked. Henlow Grange established itself as a haven for both celebrities and the public wanting a taste of the high life – particularly in more affordable day visits. It took market share from established players such as Champneys, which relied heavily on its heritage and a loyal, but ageing, clientele.
The Purdews reinvested profits to acquire a second site, Springs in Leicestershire, out of receivership for £3m in 1990 and then bought Forest Mere for £1.4m from the Savoy Group in 1996. In 1998, Hotel de la Paix in Switzerland was also added. At each location, buildings were heavily renovated (£24m was spent across four sites) and the same business plan applied. “We tried to replicate what we'd done,” says Purdew. “The first year at Forest Mere was tough financially, but as soon as we went back to basics it turned itself around.”
The Purdews' empire was burgeoning but Champneys still had something it didn't: a brand that reeked heritage. Started in 1925 by Stanley Leif, a pioneer in natural medicine, Champneys sits in 200 acres of Hertfordshire countryside in a converted mansion once owned by the Rothschild family. After a previous fruitless nibble, in August 2002, Purdew was offered the chance to buy a struggling Champneys from a Middle Eastern consortium that he'd had previous dealings with for £20m.
“It was the flagship of our industry. We had to buy to preserve our industry,” insists Purdew. With deeper reflection and perhaps honesty, he adds: “I wanted the Champneys brand. We never started in 1981 thinking we'd have four places or a brand. It was never a strategic process. I didn't have a brand name above my other three properties. We tried Purdews, but growing a brand takes decades. Champneys had those decades of heritage. It'd been spending 25% of revenue on advertising, marketing and promotion for 20 years!”
Integrating the acquisition
Purdew was clear how he wanted to integrate Champneys. The existing business would take the Champneys name, and the Purdew business model was to be engineered into Champneys.
Purdew was far from impressed with the Champneys business. Loss making, it lacked strong management and wastage was rife. “There was too much cost, no owner patronage, too much of a head office cost, too much brand product not generating return, too much interest in health clubs,” he says.
Purdew also recalls the Tring building hadn't been invested in and was in need of some TLC – a £14m regeneration programme ensued. “They had a Rolls Royce, a great brand, but we had a Mercedes, a very good operation,” he says. The changes included introducing a sliding scale to pricing. It wasn't a popular move. “There was a very old population that didn't like change,” explains Purdew. “But we had to create a new market of vibrant people who wanted to come here.”
There was similar resistance from within. “There were some very unpleasant redundancies,” he says. “They'd been here a long time and ruled the roost, but couldn't change.” None of the Champneys senior management survived the integration. Purdew is unrepentant. He's a plain talker who cites Gordon Ramsay as an example of strong leadership and it's clear he's prepared to make controversial calls.
“It's the same with any takeover of that nature,” he says. “If William the Conqueror comes into London, he kicks out all the barons and puts his own in. It's the same here.”
However, like Ramsay, behind Purdew's hardnosed façade is a people person who cares that what he's doing is fair. He constantly name-checks his management team with as much respect and pride as he does the celebrities coming through his doors. “I'd got a very good operations director, and I didn't need another,” he says. “Our accounts and marketing team were superb, we had the best therapists, best spa director, fitness directors – they'd been with me six years.”
Purdew is also keen to point out that the acquisition led to an expansion of head office, and new positions for many existing Champneys' staff were created.
He doesn't believe in change for change's sake, either. Champneys International College of Health and Beauty, Europe's leading college for the profession, continues to operate as it has done for 30 years. “We haven't tinkered with that. If it works, leave it,” says Purdew. “The director has been there 12 years and she knows what she's doing, so we let her get on with it.”
He adds that the company learnt from Champneys' focus on nutrition and cuisine, too, and has incorporated this across the other sites. But he can't resist reaffirming: “We certainly didn't learn anything in treatment or aspects of running a hotel.”
Champneys under Purdew
Purdew now has Champneys where he wants it. The building is reinvigorated, modernised and running to his slickly-oiled proven business model. But he's not content: “It's still a very exclusive brand, but not as available as we'd like it to be.”
That's where his plan to give the masses a taste of Champneys comes in. He believes he has a model to serve the Kate Moss' and Joe Public under the same roof, and wants to take it further.
“It's like getting on an aeroplane and choosing to sit in first class, business or economy,” Purdew explains. “If you come here for a first class experience you get your own therapist, your robes are a bit fluffier, your room's a bit bigger, your sheets are different linen – but you still get a level of customer service you expect.”
An overnight stay can cost up to £800, but starts as little as £125. Day visits start at £100.
Expanding the brand
For Purdew, the next step is taking Champneys' to the high street. Two years ago, he launched a range of Champneys branded health and beauty products, available in stockists such as Boots and Argos. In September, a range of premium Champneys ready-made meals, exclusive to Sainsbury's was launched. This month the first of a targeted 100 high-street spas and skincare centres will open its doors.
These are exciting times for Champneys, but cynics are sure to question where the Champneys brand is going – can you legitimately appeal to the country's elite and be in Argos and the local supermarket at the same time without diluting the brand? According to Purdew not only can you be, you should be.
“Would you say to me Chanel and Cartier are still strong powerful premium brands? They still sell hundreds of thousands of relatively cheap sunglasses in Boots. Has that diminished the power of their brands? No it hasn't,” he asserts. “So us selling products for £15 doesn't undermine a £300 stay here at Champneys.”
Purdew acknowledges he has worried about the impact of diversifying – but remains certain that prime retail outlets is where Champneys' future lies. “Supermarkets sell Dom Perignon,” he says. “They also sell dustpan liners, so don't get me wrong. Some 80% of electrical goods are sold in Boots or Argos, so if want to enter that market you have no choice.”
In Sainsbury's, Purdew thinks he's found a partner perfectly suited to Champneys. “Both Sainsbury's and Champneys are the traditional iconic brands of their sectors,” he explains. “Both had allowed other brands to take over, so are in a similar situation. But I think under the leadership of Justin King, Sainsbury's is getting better and better. Their own label is very good and we're complementing that with an exclusive, premium offering.”
The plan to have 100 spas on prime retail high street locations is Purdew's most ambitious, and risky, extension of the Champneys brand. It could be going better, too – he's lost his retail director for the project weeks before the first one is due to open. “He's gone to pastures greener or so he thinks,” he snaps. “Obviously not as ambitious I thought he was.”
The same accusation can't be levelled at Purdew. “We need to be offering regular treatments for the 350,000 guests that visit us each year. I expect to have a dozen next year, 50 by year three and I think we can do more than 100,” he says.
Funded internally but in partnership with Champneys beauty product manufacturers Acheson & Acheson, the spas will initially target market towns and affluent areas such as Chichester, St. Albans and Wimbledon Village. Purdew again has his eye on not just existing Champneys customers but a new client base. “I think we can attract a Body Shop customer, attract a Clarins customer, a Boots customer,” he says.
While undaunted by the challenge ahead, Purdew realises the High Street represents new challenges. He's finding premises difficult to locate and acknowledges that others have failed where Champneys is now daring to tread. “We have to be careful. Boots and Body Shop failed in the same concept and we're competing in an arena with very powerful people,” he cautions. “However, we have the heritage, the treatment knowledge, an outstanding product, so it's a case of making sure the principles of quality service are there.”
The proof is in the product
Purdew's confidence is justified by impressive product sales. Champneys' health and beauty products now account for £20m of turnover, while he reports strong first month food sales from Sainsbury's.
A sun cream range is planned for next year to further bolster the offering, as is a more complex skincare range, while a vitamin and supplement offering is in development. “It's the fastest growing health and beauty range in Europe,” says Purdew.
Purdew insists on keeping resort finances separate from products, but reports turnover from the four sites is in excess of £30m. Turnover at Champneys Tring is only up slightly from the point of acquisition and only broke into profit in the last year. However, Purdew insists this isn't disappointing given the amount of investment put into the site and outside competition the industry has faced. “We had a huge market share up to 2003 when a number of factors came into play. Hotels started to copy the spa experience and cheap flights encouraged people to go abroad,” he says. Champneys has ridden the storm however, and customers temporarily lost are now returning. “People now realise the value of a proper spa experience not just a bolt-on,” he says.”
With success in Switzerland and a revenue share agreement to offer Champneys spas in a hotel in Goa, Purdew eyes further overseas expansion, with Russia and the US the likely targets.
Cult of celebrity
As keen as Purdew is to get Joe Public buying into the Champneys brand, he's all too aware that no matter what level of affordability he offers, a large chunk of the allure is its association with celebrity – and that he can't afford to lose that. He's not shy to admit he's a friend of the stars. As we speak Purdew opens the day's post and finds a signed photo from Cherie Blair as way of thanks for a recent visit.
Purdew talks fondly of some of Champneys' other well known visitors; how he didn't recognise ballerina and cover star of this month's Champneys' magazine Darcey Bussell sitting in reception, or if I'd noticed Brian Conley on the way into his office? The Beckhams, Mel Gibson and Eddie Jordan are among other Champneys' A-listers.
Purdew's also rightly proud of the fact he lets former England captain Tony Adams' Sporting Chance charity use two cottages in his grounds and his more publicised hosting of Frank Bruno and George Best during troubled times. “It has always been part of the brand,” he admits. “Anyone who's anybody has been here at some point. We provide a sanctuary away from work and it's our USP that these people can feel comfy in this environment.”
He admits it's a fine line, however, between looking after big names and selling celebrity endorsement. “People do like to meet their heroes and they do that at Champneys – where else will they see their idols in bath robes?” he says.
In the instance of Best, despite 20 years of friendship, there came a time when he had to put other customers and the Champneys brand first and ask him to leave. “It was incredibly sad and difficult, but you have to make sure you look after everyone the same,” he says. “The minute we don't, we're done for.”
The Good Life
With Champneys revitalised and reaching out to new markets its stock could, if all goes well, rise significantly. It has to be questioned, is Purdew aiming for a bigger goal of an eventual exit?
He's not. He won't float, either. Why? Located in rural heaven and mingling with the rich and famous, he's simply enjoying it too much. “We've got a lovely life,” he says, “and it's a family business. I've got friends who have sold out for millions and millions, but what do you do tomorrow?” Check in to Champneys, presumably.
Name: Stephen Purdew
Company: Champneys Health Resorts
Position: Director and co-owner
Proposition: Health resorts and associated brand products
Turnover: Approximately £50m