Mr Price's CEO unveils his secret weapon

The “kids” travel the world, lapping up design trends and nuances. From the south of France to Paris, New York, Barcelona, Los Angeles and Amsterdam — as well as to the two consulting companies Mr Price employs in London and New York — they make sure the trends are passed on to the designers.

They see what people are buying, what they shun, what moves them and what moves off the shelves. The team works from the Durban-based headquarters of Mr Price.

“You walk in and it feels more like you're in the music industry,” says McArthur.

“TVs are on, the guys have headsets, listening to music, they're scanning the Internet, watching Fashion TV — whatever they want,” he says like a benevolent dad. “It all starts there. They're very creative and they're not in an eight-to-five job.”

Right now, the group is looking at next winter, while the buyers are buying for the next summer season.

This model has stood the Mr Price group in good stead. “We really behave like manufacturers and retailers,” says McArthur.

“The only thing we don't do is make the garments. To keep our costs low and the costs of manufacturers low, they don't do the design, they produce. They have no travel or design costs.”

Results again show that low-cost clothes continue to take away market share from businesses that sell more expensive items. The group has delivered the goods to shareholders in the worst downturn in a decade.

Mr Price has also read the fashion right. “If you are marginally off in good times, you get away with it. In bad times, the customer just sits and looks at you,” says McArthur.

The group, which started 23 years ago as the Mr Price factory shop in Durban, has over the past five years become a top-value fashion player.

Mr Price is still the star performer in the group, with Miladys — whose average customer is slightly older, more conservative and manages her finances more responsibly — also a strong performer.

The newer brands — such as Mr Price Sports and Mr Price Home — have had a tougher time. But all divisions grew market share. Debt collection has improved, though the group remains primarily a cash business (84% of transactions are cash).

Mr Price has 14 stores in Africa and three in the Middle East (Saudi Arabia), and it is looking at Dubai. The plan is to focus more on particular areas in Africa rather than spread itself too thinly on the ground. McArthur sees potential for 150 to 200 stores throughout Africa.

This week the group reported that sales grew 19.3% for the year ended March, while comparable sales were up 11.4%. Profit rose 15.5%.

Stuart Bird, who has grown Mr Price seven-fold since he came on board, was appointed deputy CEO of the group earlier this year.

McArthur will in time shift into the position of chairman, taking over from Stuart Cohen and Laurie Chiappini, co-founders and joint chairmen of the group.

No doubt McArthur will continue to permeate the group with his view that he runs the business more like a sports team than a business. He is possibly the only executive to wear jeans when he presents results to analysts.

Then again, Mr Price sells about four million pairs of them a year, more than any other retailer in SA.

Source: Business Times

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