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| Middle-aged dog walkers to lead Mountain Warehouse across US | |
| (35 minutes later) | |
| On a blustery morning Germans reach for their trusty Jack Wolfskin jacket while the French typically throw on a Lafuma waterproof. But the default British national anorak brand these days is Mountain Warehouse. | On a blustery morning Germans reach for their trusty Jack Wolfskin jacket while the French typically throw on a Lafuma waterproof. But the default British national anorak brand these days is Mountain Warehouse. |
| The no-frills retailer, which opened its first branch in Swindon nearly 20 years ago, has quietly conquered the UK’s outdoor clothing market, overtaking established chains such as Millets and Blacks with reliable gear particularly beloved of middle-aged dog walkers. | The no-frills retailer, which opened its first branch in Swindon nearly 20 years ago, has quietly conquered the UK’s outdoor clothing market, overtaking established chains such as Millets and Blacks with reliable gear particularly beloved of middle-aged dog walkers. |
| “Our best customer is someone like my mum,” says Mark Neale, Mountain Warehouse’s founder and chief executive. “She is 75 and has never heard of Gore-Tex. She’s not going to go into one of our competitors and start talking about what the snow’s like in Chamonix. It’s value for money clothing that keeps you warm and dry.” | “Our best customer is someone like my mum,” says Mark Neale, Mountain Warehouse’s founder and chief executive. “She is 75 and has never heard of Gore-Tex. She’s not going to go into one of our competitors and start talking about what the snow’s like in Chamonix. It’s value for money clothing that keeps you warm and dry.” |
| Mountain Warehouse has been growing at more than 20% a year, with sales expected to exceed £200m this year, as it expands at home and tackles the foothills of vast new markets such as the USA and Canada. | |
| Neale sees a gap for utilitarian fleeces and rucksacks that don’t break the bank in a market where big marketing budgets are deployed to convince shoppers to shell out for hi-tech performance fabrics with names like “Windwall” and “Aquaguard”. Mountain Warehouse has also prospered amid a slow turnaround of the loss-making Millets and Blacks brands, which were rescued by JD Sports five years ago. | Neale sees a gap for utilitarian fleeces and rucksacks that don’t break the bank in a market where big marketing budgets are deployed to convince shoppers to shell out for hi-tech performance fabrics with names like “Windwall” and “Aquaguard”. Mountain Warehouse has also prospered amid a slow turnaround of the loss-making Millets and Blacks brands, which were rescued by JD Sports five years ago. |
| The 49-year-old Welshman is a serial entrepreneur who after several false starts – including an ill-starred rollerblade chain – found a winning formula in Mountain Warehouse. Today it has 201 stores in the UK and delivered a pre-tax profit of £16.2m on sales of £141.1m last year. Unlike rivals, the only outside label the retailer sells is Kendal Mint Cake, making Mountain Warehouse the UK’s biggest outdoor clothing brand. | The 49-year-old Welshman is a serial entrepreneur who after several false starts – including an ill-starred rollerblade chain – found a winning formula in Mountain Warehouse. Today it has 201 stores in the UK and delivered a pre-tax profit of £16.2m on sales of £141.1m last year. Unlike rivals, the only outside label the retailer sells is Kendal Mint Cake, making Mountain Warehouse the UK’s biggest outdoor clothing brand. |
| Neale is half of a business power couple. His wife Michelle Feeney, who ran self-tanning brand St Tropez, is working on a new beauty business and sits on the advisory board of private equity firm Palatine. The couple’s other investments include the upmarket cafe brand Fig & Favour, the first of which opened in Hagley, Worcestershire, near their country house. | Neale is half of a business power couple. His wife Michelle Feeney, who ran self-tanning brand St Tropez, is working on a new beauty business and sits on the advisory board of private equity firm Palatine. The couple’s other investments include the upmarket cafe brand Fig & Favour, the first of which opened in Hagley, Worcestershire, near their country house. |
| The success of Mountain Warehouse has propelled Neale into newspaper rich lists, with a recent poll causing a stir with his family after it ranked the anorak salesman ahead of Welsh national hero Tom Jones. | The success of Mountain Warehouse has propelled Neale into newspaper rich lists, with a recent poll causing a stir with his family after it ranked the anorak salesman ahead of Welsh national hero Tom Jones. |
| Neale, who grew up in Ebbw Vale, a former steel town in the heart of the Welsh valleys, dismisses “all the wealth rubbish” but paraphrases Lord Kinnock, describing himself as the “first Neale in a thousand generations” to go to university. Both his parents worked in the Ebbw Vale Steelworks but after winning a scholarship to the Haberdashers’ Monmouth School he went on to study physics at Bailliol College, Oxford, where peers included Boris Johnson, the foreign secretary, and Labour MP Yvette Cooper. | Neale, who grew up in Ebbw Vale, a former steel town in the heart of the Welsh valleys, dismisses “all the wealth rubbish” but paraphrases Lord Kinnock, describing himself as the “first Neale in a thousand generations” to go to university. Both his parents worked in the Ebbw Vale Steelworks but after winning a scholarship to the Haberdashers’ Monmouth School he went on to study physics at Bailliol College, Oxford, where peers included Boris Johnson, the foreign secretary, and Labour MP Yvette Cooper. |
| After graduating he endured a short stint as a management consultant in the City but “chucked it in” when he was 25 to open a shop. He recently gave a talk at his old school encouraging students to do the same. “So many of the young people I was at university with were drawn into world of professional services or politics,” he says. “But why not do something more productive with your talents in the way that young people in Germany do?” | After graduating he endured a short stint as a management consultant in the City but “chucked it in” when he was 25 to open a shop. He recently gave a talk at his old school encouraging students to do the same. “So many of the young people I was at university with were drawn into world of professional services or politics,” he says. “But why not do something more productive with your talents in the way that young people in Germany do?” |
| Although he was for remain, Neale, who operates more stores in the Lake District than London, saw Brexit coming. In Ebbw Vale, 62% of the population – the highest proportion in Wales – voted leave. “My mum and dad were voting for Brexit,” he says. “Everyone in the Midlands and Wales [that I spoke to] was very Brexit focused.” | Although he was for remain, Neale, who operates more stores in the Lake District than London, saw Brexit coming. In Ebbw Vale, 62% of the population – the highest proportion in Wales – voted leave. “My mum and dad were voting for Brexit,” he says. “Everyone in the Midlands and Wales [that I spoke to] was very Brexit focused.” |
| The retailer’s expansion has not been derailed by the Brexit vote, with the buoyant sales picture encouraging it to press on with 20 UK store openings this year. Last autumn Neale feared its clothing prices would have to rise following the devaluation of sterling against the dollar but says the depreciation of China’s renminbi against the greenback – as well as better deals struck with suppliers keen to get their hands on its high volume orders – means they are no longer necessary. | The retailer’s expansion has not been derailed by the Brexit vote, with the buoyant sales picture encouraging it to press on with 20 UK store openings this year. Last autumn Neale feared its clothing prices would have to rise following the devaluation of sterling against the dollar but says the depreciation of China’s renminbi against the greenback – as well as better deals struck with suppliers keen to get their hands on its high volume orders – means they are no longer necessary. |
| After working with several private equity backers – Italian, Greek, Icelandic and finally the UK taxpayer in the shape of Lloyds Banking Group’s venture capital arm – Neale bought the business back in 2013 in a £85m deal backed by RBS. He now owns 85% of the equity with the remainder held by 20 senior managers. | After working with several private equity backers – Italian, Greek, Icelandic and finally the UK taxpayer in the shape of Lloyds Banking Group’s venture capital arm – Neale bought the business back in 2013 in a £85m deal backed by RBS. He now owns 85% of the equity with the remainder held by 20 senior managers. |
| Mountain Warehouse is also pressing on with store openings in North America, where it has established a bulkhead of 30 stores. “In the US the competition is lots of people selling branded jackets at expensive prices, there isn’t really anyone doing family friendly, value for money,” he says. | Mountain Warehouse is also pressing on with store openings in North America, where it has established a bulkhead of 30 stores. “In the US the competition is lots of people selling branded jackets at expensive prices, there isn’t really anyone doing family friendly, value for money,” he says. |
| Rather than set up shop with a fanfare on New York’s Fifth Avenue, the retailer quietly debuted in a suburban Detroit mall in 2014. “We opened in the Midwest on the basis a clever location fifth avenue would cost a fortune and wouldn’t necessarily be replicable. But if I could ... make a success of it [Detroit] then I could have 500 shops in America,” says Neale. | Rather than set up shop with a fanfare on New York’s Fifth Avenue, the retailer quietly debuted in a suburban Detroit mall in 2014. “We opened in the Midwest on the basis a clever location fifth avenue would cost a fortune and wouldn’t necessarily be replicable. But if I could ... make a success of it [Detroit] then I could have 500 shops in America,” says Neale. |
| Neil Saunders, analyst at US-based GlobalData Retail, says the US could be a lucrative market because Americans spend more on outdoor clothing than Britons. | Neil Saunders, analyst at US-based GlobalData Retail, says the US could be a lucrative market because Americans spend more on outdoor clothing than Britons. |
| But he cautions: “The landscape is crowded with both specialist and general players [such as Walmart and Target] who have cashed in on America’s love of the outdoors. That said, most of these retailers operate from large warehouse type formats so by choosing a less saturated location, Mountain Warehouse could have found a gap in the market.” | But he cautions: “The landscape is crowded with both specialist and general players [such as Walmart and Target] who have cashed in on America’s love of the outdoors. That said, most of these retailers operate from large warehouse type formats so by choosing a less saturated location, Mountain Warehouse could have found a gap in the market.” |
| Neale’s ambition is to become a global rather than national household name. “We think there’s an opportunity to be an international value brand,” he says. “North Face is the only truly global brand and it’s in the high price part of market.” Another six Mountain Warehouse shops in North America are in prospect as well as expansion in Poland. He also has other continents in mindand is currently scouting locations in Australia and New Zealand. | Neale’s ambition is to become a global rather than national household name. “We think there’s an opportunity to be an international value brand,” he says. “North Face is the only truly global brand and it’s in the high price part of market.” Another six Mountain Warehouse shops in North America are in prospect as well as expansion in Poland. He also has other continents in mindand is currently scouting locations in Australia and New Zealand. |
| Mountain Warehouse has already overtaken North Face in sales terms in the UK but has a way to go to match the brand’s $2.3bn (£1.8m) global sales last year. Neale says that in encounters with North Face executives the company has appeared unmoved about his North American plans. But maybe the trendy US brand should be keeping an eye out for Mountain Warehouse anoraks on their travels. | Mountain Warehouse has already overtaken North Face in sales terms in the UK but has a way to go to match the brand’s $2.3bn (£1.8m) global sales last year. Neale says that in encounters with North Face executives the company has appeared unmoved about his North American plans. But maybe the trendy US brand should be keeping an eye out for Mountain Warehouse anoraks on their travels. |