Mamas & Papas: David and Luisa Scacchetti
The husband and wife team describe how they transformed the baby and nursery sector
The high street is not a friendly place this year. Giants with stores in every town centre are being felled. Mothercare, for example, struggles on, but is closing a quarter of its stores, and falling profits (£8.8m this year down from £32.5m a year ago) are making shareholders uneasy.
Small and medium-sized retailers, therefore, have opportunities to fill gaps left by the likes of Habitat, Thorntons and Mothercare, as they shut stores at a steady rate. And some businesses, no longer small, but with the nimbleness and the adaptability that, arguably, remaining privately owned can provide, are able to ride out the storm with much less loss of life.
Mamas & Papas is an unusual combination. A £131m company, but one that's 100% privately owned; a brand with significant international presence, but that's still managed by its founders; a significant franchise operation, but one in which the culture of a family business is carefully preserved.
Husband-and-wife team David and Luisa Scacchetti have been at the helm since 1981, when Huddersfield-based Luisa struggled to find stylish baby and nursery goods when pregnant with her first daughter Amanda, eventually having to return to her native Italy to source them.
From this gap in the market, the Scacchettis have got the business to its present state by spotting opportunities and being willing and fearless enough to adapt the business to take advantage of them. For this reason, in the last 30 years Mamas & Papas has been importer, wholesaler, retailer, franchisor, manufacturer and exporter and today, David admits, it's “a complex business”.
From wholesale to retail
It wasn't always thus. When Luisa started shipping in goods from Italy, Mamas & Papas was a single boutique in Huddersfield. The success it saw meant that relatively quickly the business morphed into a wholesaler, selling its imported products, and soon products designed in-house too, to big names in retail. For this small business to be making waves was surprising, but what it was doing was quietly revolutionary, and would eventually change the maternity and nursery sector on a fundamental level.
“What was around at the time was all quite functional,” explains David. “But when you're having a baby, there's a strong emotional element; you're excited, it's a great moment in your life. From a trade point of view, we introduced fashion and we introduced emotion, which was lacking at that time.”
“We changed the nursery industry,” says Luisa, adding as an example: “The pushchair became a fashion accessory; almost like a car – it presents who you are.”
With things ticking on very nicely as wholesalers, the decision to make Mamas & Papas a retail brand as well was extremely risky, effectively meaning they were going into competition with their own customers. But David explains: “By the mid 90s our range had grown so varied and wide, we realised our independents and major customers couldn't actually handle it all. That's why we opened our first store in Northampton in November 1998.”
Moving into retail was an exciting step, but the pair took their time, determined to tread carefully to minimise the risk of losing their big customers. David describes the challenges of this period as “massive”, adding: “You've got a customer base that sees you as a supplier, and all of a sudden you're a competitor. We tried to do it as carefully as possible, which probably slowed down our retail growth in the early year or two. We didn't want to lose business from our customers.”
Luisa continues: “It actually became a positive because we would never discount in our stores. People would actually use our stores as a showroom, then go to [our customers], who couldn't stock the whole range, and who would say ‘have a 10% discount if you buy it here'. So they actually did better with us there than with us not being there.”
“We'd been so successful in the late 80s and early 90s,” says David, “and here we were opening stores and becoming even more successful. The more stores we opened, the stronger the brand got.” Today, the company continues to supply over 200 independent retailer and national retailers, such as Argos, Next, John Lewis Partnership and Saks 5th Avenue.
This change in focus changed, inevitably, the culture of the company. From being a wholesaler who could, in effect, hide behind its customers, now the Mamas & Papas brand was on the front line. David describes seeing a similar change in recent years, with brands' online presence increasing the sense of accountability to customers.
“Customers are so unforgiving if you get it wrong,” he says. “But if you embrace that it makes you better as a business, and allows you to develop. That was a big learning curve for us. It changes attitudes, including our own. We like it – it's healthy.”
Becoming a global brand
Once the UK retail arm was established, another profound change in terms of logistics, priorities, and culture came with the decision to venture overseas.
With Mothercare saying recently that it is expanding abroad to counteract the negative effect of its British stores' performance, the significant international presence Mamas & Papas has built up puts it in an enviable position, with between 10 and 13% of business coming from abroad, according to David, and a five year plan in place to increase that to 25%.
Today there are over 50 Mamas & Papas stores within the UK, more throughout the rest of Europe, franchise retail outlets in the Middle East and a smaller presence in east and south east Asia, with negotiations in other territories are on-going.
One of the secrets to their success globally so far has been the partnerships with franchisees and distributors. “We don't give away our brand lightly,” says Luisa. The ethos of doing things right, rather than as fast as possible, permeates, with David saying: “It'll take us a good year before we set up a franchise partner or distribution partner. They have to provide us with a plan, tell us how they're going to develop the brand, where they want to take us…”
And Luisa points out that with franchisees investing so much money in a new store, they make sure they know their market and have done their homework. The flagship Mamas & Papas store on London's Regent Street both attracts potential franchisees and acts as an effective template for them to replicate in their own territories.
Product development on an international scale remains a challenge, and an expensive one at that. “Becoming an international brand, we have to offer products with an international appeal,” says David. How has that changed the product development process? The reply from David and Luisa is simultaneous: “It costs us more money!”
“Can you imagine all the trading standards?” asks Luisa. “It took over a year to get into Canada – it was 15 months before we sold the first product. When you've got the number of products we've got, it's a lot of work.”
Growing the business at their own pace and having control of the direction has been very important to the Scacchettis. For this reason, each stage of the business' growth has been financed organically – equity funding rejected. David suggests that the impact of keeping the growth steady, as a result, has helped the business react quickly and remain nimble.
“We've always looked at building blocks of the business, it's always been one block, then another, then another. Opening the stores was a big step, but we opened one, then a year later we opened another one, then after two or three years we opened another three or four… That's how we learnt, because you do make mistakes along the road.”
The adaptability Mamas & Papas has cultivated and maintained has arguably given it a distinct advantage on the ravaged high street. David admits that things have been tough, and margins have been affected by the rise in cost of commodities and raw materials. The product ranges have adjusted though, to reflect a slightly less indulgent consumer.
“Rather than just having a £3,000 nursery – which still sells – now we have a £500 version which sells more,” says Luisa. “All we've done is accommodated. So if someone wants the best, they've got it, and if someone wants to pay a little bit less, they've got that as well under the Mamas & Papas brand.”
Staying privately owned has also allowed Mamas & Papas to remain a family business, with seven members of the family in key senior management positions. The couple's daughters, Amanda and Olivia, were taken along to exhibitions as children, part of the business from day one, and today are integral. This effectively rules out an eventual sale. “It's in their blood,” says Luisa, “They'd be gutted if they thought we'd want to sell.
“If we didn't have the girls, we'd probably think differently. But they're enjoying it. And it's still a buzz.”
There's no sense of the brakes being applied, and after 30 years Mamas & Papas is as open to new opportunities for growth as ever. Key to this is their aim of staying at the forefront of product development – an area on which there's a huge focus, with 100 of the 500 employees at head office working exclusively on new products, and revenues being poured back into R&D.
With its fundamental ability to spot opportunities and adapt to make the most of them, there's no reason to doubt the Scacchettis' aim of making Mamas & Papas a truly global brand, especially with the original founders' enthusiasm remaining undimmed.
“Sometimes I think, why are we getting older?,” says Luisa. “We need another 30 years!”