Over the past 50 years in the shoe trade, I have had my fair share of failure.
The biggest lesson I learned, at the start of my career, is not to devote time and energy to a business or project that has little chance of success. This might sound obvious, however sometimes you are so involved in the detail of the day to day running of the business that you don’t stand back and question the future viability of what you are doing.
I was a women’s shoe manufacturer in London in the 1980s. If I had looked at the big picture I would have seen that the future of manufacturing in the U.K. for low technology, high labor content businesses like footwear manufacturing, was unsustainable. Most of the production was moving to Asia where costs were much lower and the quality was excellent. It took a visit to Taiwan to see the same shoes being made at half the price that it was costing us in our London factory to persuade me to leave manufacturing and become an importer. My lesson is to respond quickly and try and anticipate change.
Pressure on middlemen
Another example is from the 2000s. I was a successful importer from Asia, a business I set up in 1986 called Browning Enterprises. It had a turnover of £60m. As communications improved and markets opened, more Chinese manufacturers and trading companies came directly to the major U.K. retailers, putting pressure on the margins of the middlemen, like me. Our costs were too high. We couldn’t compete. The import company struggled on till 2009.
It was the decline in the importing business and the desire to start my own brand that led to me to launch Dune in 1992.
Temper your optimism
Another failure was opening unprofitable stores. This is an expensive mistake as the £400k investment is written off when the store is closed. The failure is usually due to overestimating the level of sales. The costs of a new store are easily calculated. The big variable, that is largely a matter of judgement, is the sales number. Of course you do your due diligence by looking at footfall figures, studying demographics, and talking to adjacent stores to try and judge their performance.
Finally, you come to a sales number. The lesson is to be cautious about the level of sales. Look carefully at the possible downsides. As an entrepreneur your natural tendency is to be optimistic. You must temper this optimism. Resist the temptation to open the shop because you want to grow. It has got to make commercial sense.
As an entrepreneur it is easy to get distracted and sidetracked into ventures that are not related to your area of expertise. This loss of focus can be damaging, as not only is there a high probability that the new venture is unprofitable and you will lose money, but it also takes your attention away from your main activity.
Not special
My career has been in fashion footwear. That’s what I know. However, during the pandemic, I launched a sustainable trainer brand. I felt that was where the growth was in footwear, so that’s where I needed to be. It was a failure. Why? Two reasons.
Firstly, it wasn’t special enough. It was a good, well-made sustainable product but in a crowded market it didn’t have an important point of difference that would make it stand out.
Secondly, we didn’t go out and aggressively sell the product. I thought I would generate the online sales through the website. This was a mistake. We needed to sell wholesale as well, not only to generate sales but to get the brand out there in the market.
There are two important lessons for entrepreneurs here. One: Don’t underestimate the marketing cost of selling a new brand online. Two: You may have a great product, but it is essential that you get out there and sell. It is no coincidence that over the years the sales team has been the highest earners in the business.
Avoid distraction
We launched a range of children’s shoes. This was related to our main activity, but as we found to our cost, the market is very different from adult’s shoes. As we didn’t have the space in our stores to offer the range we focussed on online and wholesale. Selling a new brand of children’s shoes online was more difficult than we anticipated. Mothers like to buy their kids’ shoes in a physical store. In addition, the market was polarized between the established heritage brands, Clarks and Startrite, and the large stores like Next, Marks & Spencer, and Zara, who were offering similar shoes at lower prices. The lesson is clear. Resist the temptation to get distracted unless you are very confident that the new venture is financially compelling.
The right team
Finally, having the right team in place is essential. As an entrepreneur there is a danger that you are reluctant to give up control. It is essential to recognize the limitations of your abilities and hire a team that can do things better than you.
The importance of building the right team came into sharp focus in 2009 when we acquired a company called Shoe Studio and trebled our size. A year after the acquisition we started to struggle. Our profits fell. We didn’t have the management expertise to run a larger business. My skills and time were being stretched to the limit. We employed a first-class FD and a team of senior experienced retailers which transformed the business.
It is a well-known expression that you learn more from your failures than your successes. That is certainly my experience. And if the project is failing, then fail fast.