Interview with One Small Step, One Giant Leap’s Nick Schwefel
We speak to the man shaking up the kids' shoes market
The bright facades of Accessorize on virtually every UK high street are largely down to Nick Schwefel.
After leaving school at 16 and starting out as a van driver for Monsoon Plc, owners of Accessorize, he was put in charge of the roll-out of the women’s fashion outlets. During his career with the company, he grew the brand’s high street presence from 5 to 145 stores. After being entrusted with multi-million pound budgets, he’s now after more money to roll-out his own venture – high-end children’s shoe chain One Small Step, One Giant Leap.
The transition from corporate life has been relatively smooth so far. He’s relaxed and friendly and emits a hint of nervous energy, suggesting he’s getting restless for further growth. And you can see why.
On the back of his business plan Schwefel persuaded private investors to part with £1.5m. That funding has helped him put in place an infrastructure capable of supporting a sizeable chain from its head office in Acton, as well as his first two stores – one in Bath, the other in Sheen, a leafy enclave of south west London. But before the company’s reserves run low, Schwefel has decided to top up.
He’s after another £1.5m to open a further five stores and at least one high profile concession outlet by 2005, which should enable it to grow further out of cash flow. “We believe we’ve got the formula right, so are ready to start replicating. There’s scope for between 40 and 60 shops in the UK, predominantly in the south, it just depends on when we choose to sell out,” he says.
Schwefel is quite open-minded about how the money will be raised. While there is considerable interest from a number of wealthy contacts, the likelihood is he’ll knock on the doors of a select group of venture capital trusts and formal networks too. This will be the first time he has presented to institutions and networks, and he’s currently brushing up on his pitching skills.
It’s not something that comes naturally to the average entrepreneur and accounts for why so many suffer knock-backs despite good propositions. The City suits expect a polished performance. “I’m good at retail, but not as strong on funding and financials,” he admits, as he points out every every nook and cranny of the store.
First step to that is building a robust financial forecast. Schwefel has enlisted the services of entrepreneurial chartered accountants Rees Pollock, a firm that has Wagamama among its portfolio clients.
While no approaches have yet been made to institutions, he is aware that he’ll need to target those ready to back a steady, reliable sector ahead of businesses promising the earth. “The returns we can offer are by no means small, but many of the institutions want fast, sexy ventures in the bio-science and technology sectors. We understand that and it narrows down our target list nicely in many ways,” he says.
In five years he aims for sales of £30m. Clearly, it’s a very different proposition from the £300m animal that institutions salivate over, but it would be considerably more than respectable.
Projected turnover for this year is likely to be around £1m. The two existing stores have been open a matter of months and footfall is rising as parents, through school yard chat spread the gospel.
One Small Step’s key differentiator is that it’s set up to cater for parents who find shopping for their children’s shoes a chore. Schwefel claims stores can offer a quicker service and adds that customers can actually book appointments too.
The stores are deliberately situated within easy reach of good parking and are all on one floor, music to the ears of those wheeling prams or carrying heavy shopping bags. There are no carpets to make the store look grubby. Instead the clean, light, stylish environment helps attract the more well-todo customer. Personal touches like the retro family and school photos, enlarged to poster size, give the shops character and represent cost-effective décor.
” There’s also an unmarked toilet with baby changing facilities for those who get caught short as well as calming music and magazines to keep parents sane. Opening hours are also more civilised for the busy family, with shops open on Sundays and until 6pm or later during the week. Schwefel is also proud of the stock room and warehouse in Acton. “We have around 5,000 pairs of shoes and when we start to sell out we have back up stock in Acton. We operate an automated next day replenishment system, so customers won’t be told that we don’t have a line in a particular size.”
The £100,000 IT expenditure went on wireless communication technology to avoid extensive cabling. Touch screen monitors, retail control, sales order processing, stock control and financial and information management are scaleable features that enhance the company’s service offering and efficiency, claims Schwefel.
The shoes themselves are impressive too, with an extensive list of brands, ranging from solid English performers Start-Rite, to the chic Dolce Gabbana offerings. There are also highly regarded names from Denmark, Italy and Holland, not usually stocked elsewhere.
Displays are occasion-led, with school wear, sports products, wedding and special occasions all clearly segregated. The store in Sheen has been deliberately situated opposite a Waitrose in a family-oriented area and reflects the other locations being targeted. While it’s still too early to tell how things are going, the ‘back to school’ performance suggested the approach is having the desired effect. Now all he needs is to get on with what he does best – opening stores.
? Raise ?1.5m to further expand the business
? Secure leases in target locations
? Open at least five more stores and one concession store by 2005