Boyes defies the recession

Nov 27 2008 By Sue Scott, Evening Gazette

AS TWO of the UK’s best-known high street stores passed into the hands of administrators, one family-owned North East value chain was bucking the trend by preparing to open its 35th store in Middlesbrough.

Andrew Boyes, chairman and joint MD of the 127-year-old Boyes department stores said sticking to his great-grandfather’s retail principles had insulated the company from the crippling effects of the credit crunch and he was optimistic that expansion would continue through 2009.

“We have stuck to what we know over the years in offering a wide range of different products at value for money - I think at the moment, that’s what people are looking for.” But he conceded: “There are a heap of problems out there - it’s not an easy market by any stretch of the imagination.”

Tomorrow, the firm begins trading from more than 8,000sq ft in Middlesbrough’s Dundas Arcade - its second to open in the past few months under a plan to target town centre sites within a 140-mile radius of its Scarborough distribution centre.

“There has been a lot of extra floor space built in recent years for retail - almost too much and the world has become a lot more competitive at the value retail end,” said Mr Boyes. “But we have maintained footfall and in new areas where we started at a level, we have kept going. We should be able to build turnover next year - I would hope to see the odd percentage extra.”

But that would not be driven by the government’s VAT cut this week, the handling of which he described as “crackers”.

“The whole thing is ill-advised as a principle to generate more business - it was not a smart thing to do. Doing it the week before Christmas, which is a busy time for retailers, was absolutely crackers.”

He said the change had created a “logistical nightmare” for value stores with thousands of low ticket prices. Typically, a Boyes store carries 30-40,000 product lines.

The firm would target high value items first as it passed on the 2.5% reduction to customers by Monday. “Suppliers haven’t even started issuing recommended resale prices yet. It’s not something you can do overnight.”

Elsewhere on Teesside, furniture retailer Barker and Stonehouse said it was taking the opportunity to boost pre-Christmas sales by passing on the VAT cut to customers six days ahead of deadline. MD James Barker said the cut would be implemented across the firm’s eight stores immediately, typically saving buyers £42 on a £2,000 purchase.