Behind the scenes at family retail chain with trading director James Taylor
Speakers at last week’s GCA conference and AGM offered their wisdom and experience from a variety of aspects connected to the greeting card industry.
And, with the co-dependent relationship between retailers and suppliers important to most, how to grow from a single store to a chain of over 300 stores James Taylor, trading director of family firm Cardzone, gave a fascinating insight into the story behind the business, how it’s grown over 20 years, the successful acquisition of Clintons just a few months ago – and what it’s like working with his dad Paul.
Here’s his presentation from the event in Bristol on Thursday, 19 September…
My first memories
“My first memories of greeting cards go back to a time shortly after my dad had bought a small but busy shop in the city centre of Sheffield.
“The store sat on a prominent corner of Castle Square, a popular bus route for many workers and shoppers venturing into the city. I remember a large Primark opposite the store, and the city back then had a really nice buzz about it.
“The store itself was a strange shape and had a purple sign with a garish green script carrying the Cardzone name. The shop had a relatively large back area which was over two levels. It was dark in there and stock piled from floor to ceiling!
“I remember rummaging through boxes and being shocked at the variety of products I found. I could see cards covered in teddy bears or watering cans, with flowers popping out the end of their spouts, cellophane was everywhere – apparently there was no such thing as global warming in those days!
“I was 12 years old and this was my first impression of greeting cards and retail, surprisingly, nearly 20 years on I chose this as a career!
“Jo Hancock, who worked with my dad in a former business, had set up Cardzone and, when my dad approached her about his ambitions to build up a chain of shops, combining her focus on the store operations and his skill set in running a business, an agreement was struck and their Cardzone journey began.
“I would occasionally see Jo from time to over the next couple of years, whether that be on store visits with dad or weekend trips to Paul White’s wholesalers in between my cricket sessions. In that period the business steadily grew but the accelerated growth my dad was hoping for hadn’t happened yet.
“From 2007 I started my first paid job in the school holidays as basically a gofer in the two stores that we had in Nottingham Broadmarsh Shopping Centre. It was brilliant as no two days were the same.
“I helped on the shop floor in both stores but spent the majority of my time upstairs in the storage cage working deliveries and breaking down cardboard. I used to get strange looks off the security staff when wheeling pallets of stock across the car park – I felt like an adult even if I didn’t look like one!
“Seasonal times meant it all hands on deck and it really was a family affair. That Christmas Eve I remember taking £5,000 with Jo and the store manager Heather working the tills, my mum tidying cards and myself, my dad and my younger cousin Harry on security!
“Broadmarsh Centre was a busy, value type centre that didn’t always attract the best of customers. We had a dream pitch near the bus station but it had completely exposed sides and people often used it as cut through which was a nightmare!
“I must admit that cards overwhelmed me at that age, I couldn’t get my head around the vast choice of options with what felt like few differences, the layout plans and how you had to ensure the correct balances on displays. Even to this day it’s fair to admit my merchandising skills aren’t the best, but I’m confident they’re better than my dad’s!
Warehouse
“School and a love for sport took up my focus over the next few years – admittedly, more sport than school – and, on finishing my A Levels, I hadn’t thought much about what the future would hold. I was fortunate that Cardzone had recently acquired a small warehouse and wholesale business in Mansfield close to where we lived and my dad, probably out of sympathy, gave me my first full-time job.
“The business had marked its first significant milestone just before I joined, acquiring 14 shops trading as Special Occasions which was a chain in the South West of the country, and grew the business outside of England for the first time. Monmouth felt like we’d moved up in the world and the business had become dead posh overnight!
“There were also stores in Hereford and Tewkesbury both of which were thriving towns back then, cards sales were strong, and competition wasn’t such an issue. I think these new stores had a big bearing on the change in the company’s direction with our move to a more premium card offering.
“The warehouse itself sat on the corner of an industrial estate and had big green gates which were broken into more than once throughout my time there. The large yard out back was perfect for taking in deliveries and I always loved it when the sun was shining and we could work outside which felt like a real treat.
“Thankfully, it never got lonely in the warehouse even with some early starts or late finishes as I felt like Cinderella while making a cup of tea in the kitchen because the mice would keep me company –honestly that’s not a joke!
“Whenever the management team were called into the warehouse to help, funnily enough the heaters would always go missing to ensure their cushty working requirements meant they avoided the cold. A typical day involved picking orders, loading our two vans and managing stock inventory.
“While I still didn’t appreciate how business worked in a clear way and I wasn’t at that point involved with visiting the stores, I know deep down some of the lessons that I learned in those times were invaluable and have helped me as I’ve developed over the years.
“I used to love when the reps from a variety of companies would call in for their orders, everyone was always so friendly and helpful and answered the many inquisitive questions I had. Mike Coster from Simon Elvin was one regular face who would come in each month and I find it incredible that, roughly 10 years later, my parents were able to buy Paper Design Group, of which Simon Elvin is one of the businesses.
“Mike was always so charming and never pushy, respecting the decision making of a young lad barely out of school. Those two years in the warehouse, although not the most glamourous, have forged valuable long-term relationships and I think those times have given the right impression of me as a person.
HTI
“In 2014 it marked a new chapter when I started work experience for a children’s toy company called HTI. This is an import business that specialises in all manner of toys ranging from entry-level pocket money to pushchairs and prams. The business is privately owned by a close friend of my dad’s and offered the opportunity to gain buying experience which included Far East travel.
“Joining HTI meant leaving my life in Nottingham behind mid-week, where I stayed in hotel accommodation near Blackpool Monday to Friday which, at 20 years old, felt strange when I’d always had my family around me, in particular my mum.
“Going from working in a small warehouse team to an office of over 50 people was a big change but something I enjoyed quickly and an opportunity that I couldn’t pass up as I knew there was more out there for me than staying in Mansfield.
“On my first day I met my new manager Mike Butterworth, we instantly hit it off and I learned so much in those initial few months working under Mike. This was where my understanding of business started developing as we talked about costings, negotiation, margins, department strategy, range building and evaluated what others were doing in the marketplace through comp shopping. The classroom in school was always a chore for me whereas this was exciting and ignited the passion to soak up information and grow.
“It was the year the film Frozen was released where it felt like everything else stopped and anything with Frozen branding slapped on it had to take precedence. It was also the second year of the Loom Band phenomenon and I think one of the simplest yet most genius ideas we had was creating Frozen Loom Bands! It was a case of taking the hottest toy craze and combining it with arguably the biggest movie licence of the last decade.
“I learned the value of bringing ideas to motion, mocking things up quickly and getting something compelling in front of global brands like Disney for sign off.
“The work experience position led to a full-time job with HTI and for two years I supported Mike which included eight trips out to the Far East. I visited 10 different cities travelling on trains and planes, ate in some extravagant restaurants and, equally some very questionable ones – a highlight of these being a lamb hot pot restaurant which involved many shots of beer using my new favourite Mandarin word ganbei, which means cheers to all!.
“There was also a rogue night of karaoke with a video somewhere on social media but I’ll save that one for another time!
“Anyone who is lucky enough to work in a great business and has the opportunity to travel internationally should absolutely do so! Not only from a business development perspective but also from a life experience one.
Hallmark Outlets
“After two years it was a bittersweet departure from HTI as my role within the business had changed direction, my passion, I knew, sat with buying and I was adamant that without the Asia trips the sacrifice of being alone all week with no real social life wouldn’t make things worthwhile.
“Prior to the change when I was home one weekend, I remember my dad updating me on the latest acquisition that he was pursuing, this being the 14 Hallmark Outlet stores positioned across the UK. To date, this deal has been the most fruitful acquisition the company has done and gave us a foot hold into higher profile locations with stronger traffic and consumer appetite to spend.
“It really was a game changer-type deal that gave Cardzone an added dimension trading on busy discount outlets in a partnership with Hallmark which involved maintaining the Hallmark trading name.
“It feels like only yesterday that I can picture the clear moment on 30 November, 2015, when I made the decision that the timing was right to rejoin the family business, though this time bring with me some value that could help support the growth strategy and my dad’s vision.
“What had helped with the deal was the previous exposure we’d had of the successful trading on Outlets following the 2013 acquisition of value chain Card Centre, again this was a 14-store chain oddly enough.
“The jewel store of the estate was in Bridgend and traded on a McArthur Glen Outlet scheme just outside the town centre – to add context, this one store was like four of our more typical stores in many aspects, four times the rent, the footfall, the sales and the profitability.
The Hallmark Outlet business made complete sense in pursuing with this knowledge as Card Centre was only a small brand in Wales whereas Hallmark is a global brand which almost all our customers have heard of. We believed with our knowledge and experience we could approach running these stores from a different angle and make a success of this opportunity having visited their stores frequently while exploring the deal.
“In the eight years we have now had those 14 stores it is one of the unusual cases whereby we haven’t had to close any of the original sites, and we’ve also grown the estate moving into new and better Outlets as our confidence has grown.
“Sadly, there are limitations to the upside of this part of the business as there are only 37 Outlets throughout the UK but, unlike the High Street, footfall is holding up better and there are exclusivity clauses which cements the future of this part of the business for the group.
Relationship with Dad
“Footfall in those times was positive on a like-for-like basis and my experience was growing because dad was ensuring I had the opportunity to develop skills across the whole business rather than being focused on just buying.
“I had a small cluster of stores which I area managed so that I understood the field operations and what was happening on the ground, I was responsible for our warehouse manager and two drivers who took care of stock movements and maintenance; and I also started to get involved with property discussions for the estate linked with the store profits and losses which really fascinated me. I loved seeing how the nett contribution of each of the stores worked, starting with the top line sales and gross margin and then deducting the cost of payroll and fixed occupancy costs.
“I also got the opportunity to join meetings with our different landlords, agents, legal firms and accounting businesses. Occasionally dad would welcome discussions from the various approaches he had to size up any appetite there was for investment in the business which was always interesting.
“I’ve always loved working with my dad, and I think the biggest reasons for this are because he’s honest, continuously challenges me and has consistently set a very high standard of himself which I have always looked up to.
“The truth is, business can be tough, that’s the reality of the situation and it probably isn’t likely to change with what we do. Yes, in more recent times we can be guilty of disagreeing on certain things, but I will always stand by the belief that I have learnt 80% of what I know in business because of my dad and, therefore, the disagreements are typically resolved quickly and always amicably – admittedly, me usually accepting that I was proven wrong and through his better judgement we could have gone about something better!
“I love the passion he shows when talking business and networking with a whole raft of different people. This could be smaller retail business owners, suppliers or different multiples, some of whom have far more successful businesses than ours. What’s most impressive is that this is still the case for my dad after working in the industry for almost 40 years!
“Business is all encompassing for us as a family and it truly is a way of life. The idea of switching off over a weekend or on a holiday may sound nice in principle, but I’ve come to terms with the fact that it just isn’t how we are built and, moreover, the temptation of knowing how trading has been feels somewhat like an addiction and something I can’t imagine will ever change while being at Cardzone!
“For the next couple of years, we focused on trying to grow through acquiring different independent businesses and aimed to pitch ourselves as a great exit option for these people who owned nice stores and were starting to contemplate retirement.
“All successful independent businesses have rallied on running their business in the way most suitable for the environment they’re positioned in, and we have always strongly promoted this of our store managers encouraging them to ‘treat your store like it’s your own’.
“We pushed hard to get our name out there as a solution for these indies as we knew that some were starting to find trading tough and this was our only means of continuing to grow at a steady level, rather than opening new stores with no previous goodwill in an already saturated market.
“There weren’t really any limitations either other than a £200,000 turnover requirement as we were confident that, regardless of the type of card shop, ranging from value money to premium, and the fact that it didn’t matter where the store may be positioned across the UK, we could accommodate and make it work within our business.
“Sadly, with today’s challenging climate and the ongoing rising annual payroll costs, relatively low turnover stores are harder to turn a profit however we will always be open to discussing opportunities and exploring whether something is suitable.
Clintons introduction and pandemic times
“It’s no secret that we’ve always been interested in the Clintons business and, over the years, have held various discussions about a potential acquisition.
“In autumn 2018 discussions again restarted and Clintons, at the time, was close to 340 stores compared with Cardzone’s 120-store estate. Given their prime site locations throughout the UK, Clintons dwarfed Cardzone and turned over almost five times more revenue.
“The opportunity came about because Cardzone was trading well and maintaining its profits, whereas Clintons was going through difficulties.
“As I think back to the fact that, in pursuit of the deal, we flew out to Tel Aviv to meet billionaire co-owner Zev Weiss, it really does make me laugh at the size of the sort of deal we were hoping to pull off here – it had a real David and Goliath feel about it!
“While going through the due diligence of the deal, my dad regularly said they were running rings around us financially and had complete control over the situation despite not working in the day-to-day running of the business, these guys were the sharpest operators we had come across.
“One funny memory back in Tel Aviv at the crunch time of the deal was when Zev asked me to list what I would do differently from a gifting and distribution perspective in Clintons. I sat there for the longest five minutes of my life trying to tell him how things could be different while also being conscious of not giving too much away as there was always concern that the deal might not happen. A 25-year-old who’d been back in the family business for less than three years telling one of the most successful people ever in our industry how a part of his business should do things better! There was plenty of blagging involved.
“In the end, and despite our best efforts to make something work with Clintons, I’m delighted the deal fell through as in spring 2019 I certainly wasn’t ready for that sort of step up and, a year later, little did we know, the world would go into a complete meltdown!
“The pandemic was a surreal time for so many reasons and, while I hope we never go back to those times or similar, I feel we got off relatively lightly as a retail business and bear in mind that’s despite our turnover dropping to zero for around seven months in a year!
“Like all of us I’m sure, I remember the afternoon updates from the government like they were yesterday and as a business trying to understand the detail behind the topline updates, and what it meant for us going forwards. There was so much uncertainty, other countries had already announced that they were locking down, and we were trading through the worst run-in to Mother’s Day we’d ever experienced!
“The furlough scheme – which my dad continuously kept calling “Furlogged” and my sisters and I enjoyed teasing him about – had just been announced and entitled us to 80% wage support for employees, this was crucial. Furthermore, the business rate concessions and, most importantly, grants meant we had cash still coming in within a few weeks to offset other costs we continued to pay.
“In the early days, all of our roughly 900 employees moved straight on to furlough which meant just myself and my dad as directors were still working in the business.
“My working week changed greatly and initially meant applying for grants with the many local councils, to then reaching out to our landlords to do whatever we could to buy ourselves the breathing room needed while being closed.
“I remember hearing how other retailers had held back on their quarterly rent in March just before the lockdowns were announced and, although it feels good knowing that we chose to do the right thing given landlords have their obligations to uphold, it definitely set us on the back foot with negotiating support from landlords as we didn’t owe them any money!
“The way the government left things open for tenants and landlords to discuss concessions and rent deferments was interesting as we had all manner of different responses. Some of the smaller private landlords, believe it or not, reached out to us in the first few weeks and said they expected no rental payments while we were shut. This was really touching but contradicted by the larger institutional landlords who at times didn’t want to know and practically pretended there wasn’t a pandemic!
“It took an age for us to work through and, finally months after we had reopened, in over 90% of our stores we had struck deals that we were happy and equally relieved about.
“Clintons had closed a large number of stores in the first half of 2020 due to another restructuring which meant we were all guns blazing to grow the business irrespective of everything else that was happening around us and, by Christmas that year, we had opened in over 20 ex-Clintons sites. This was our first proper introduction to having higher profile High Street and shopping centre locations that had long-established goodwill meaning strong greeting card sales.
“It massively helped having all the store data from the aborted acquisition the year before, so we knew the sites to target!
Yankee Candle acquisition
“That same year we were able to boost our presence on the Outlets by acquiring nine Yankee Candle stores. This was a similar style acquisition to the Hallmark Outlet deal a few years before and strengthened our relationships with the Outlet schemes. These stores have incredible seasonality meaning the proposition only works on the basis of having a strong Christmas.
“As we’ve reacted to the challenging trading this year, it solidifies the point that, without a strong Christmas in our trade, most of us wouldn’t realistically be here! Tougher everyday trading makes the reliance on Christmas even more apparent, so it feels like the stakes are getting higher and higher for those final two months of the year.
“Thankfully, Outlet Christmas trading starts motoring in October which is earlier than on the High Street but, if I told you that the Yankee Candle stores take almost 50% of their annual takings in an eight-week period, it would probably make you realise just how vital getting that time of year right is!
Paper Design Group
“The Paper Design Group acquisition was something that my dad had worked on through his close relationship with Ian Jackson over many years and came at a time where we felt diversification away from a solely retail business made a lot of sense.
“PDG was a business comprising five card and gift dressing publishers, Polytint, Simon Elvin, Glick, Nigel Quiney and Paper Rose. Although operating in the same industry, all the businesses have quite different niches except for Nigel Quiney and Paper Rose who are both direct-to-retail greeting card suppliers and already did good levels of business in Cardzone prior to the acquisition.
“In 2023 we decided a management buy-out made sense for the group which meant divesting Nigel Quiney and Paper Rose. Selling a part of the business is something my dad hadn’t done since Cardzone began and probably took him back to his former days with The Greeting Store Group when the private equity owners decided to sell up to Clintons.
“Having this year acquired Clintons, the story really has come full circle for my dad and I regularly remind him of how I think acquiring that business was somewhat part of his destiny. All being well, as we continue to grow in the years ahead the product and distribution synergies between PDG and the two retail businesses will mean closer collaboration and create a more robust structure for Pillarbox Designs Group as a result.
Clintons acquisition
“And so, on 4 March in our 20th year in business the big acquisition of Clintons finally got over the line. It was a strange feeling as we travelled in the car together to Clintons’ head office for the first time and called all our larger suppliers and friends to break the news to them.
“If I’m honest, there was a variety of reactions to the news, some people expected it, wished the deal could’ve happened sooner and felt we would make a real success of the business. Others were shocked and, dare I say it, felt we were bordering on the edge of insanity given the size of the undertaking in today’s retail landscape.
“Entrepreneurship is about calculated taking risks in the hope of achieving profit and there is a large element of that here when you consider the shape of this modern-day former giant of the High Street which has suffered and shrunk over many years. The bottom line of these things though, is that we would have never gone through with the acquisition if we didn’t firmly believe we could do a better job of running Clintons with our very different management style approach.
“The business needed fresh eyes, to be stripped back to basics and to have all areas examined under a microscope to get a real grip on things. This is the reality of the last six months which, although painful at times, was necessary to know exactly what we were dealing with and then confidently build a step-by-step path for a brighter future.
“It’s true, todays Clintons is only a fraction of the size and stature it was at peak, but the single biggest positive I’ve taken since 4 March is the incredible loyalty of the store teams who have stuck around through numerous trying times. The length of service in the business is unlike anything I’ve experienced before; it blows my mind!
“If you were to group the number of years of service into five-year bandings, the most common length for store managers in Clintons sits between 25 and 30 years! There is truly no one more equipped in the business to know what is right for their customer base and to be given a voice for the first time than these store managers.
“We know we won’t get everything right and have already made some mistakes along the way; but I’ll be damned if we don’t give a far bigger opportunity and responsibility to these people given all their experience and commitment in their various shop locations.
“Managing change in business is not something that is completely new to us, but on the scale of this acquisition it has been challenging.
“Over the last few months I’ve seen that sometimes starting afresh with things rather than holding on to something that’s always been there, and not overthinking or worrying about a potential consequence of that change, is a powerful lesson.
“We’ve made some big decisions in a short space of time which initially had me anxious about the impact they could mean for the business but, the truth is, as long as your stores stay open to trade and there’s a plan behind what you’re doing, only good will come of it and any pain will be short term.
“I’m delighted to say I have some brilliant new colleagues at head office who have made a massive difference for both retail businesses since the acquisition. We also have a new field structure with excellent leadership at the helm which bodes brilliantly as we plan ahead for 2025.
“Surrounding yourself with as many of the right people you can, who are as passionate and hardworking, and want the best for the company and themselves, will always be my number one priority because if you can get that right, great things will be achieved and fast!
What’s next for the group
“I always think about how lucky we are to work in such a closely knit and talented industry. An industry which keeps evolving and finding ways to raise the bar on product, we really are global leaders when it comes to product illustration and design! This strength of product will always be what stands us apart from other industries and ensure that through fast changing times we remain not just relevant, but forward advancing because, let’s face it, there’s something ever so personal about receiving a handwritten card that can’t be replicated digitally.
“In our businesses we know that we can’t stand still and that we have to continuously get better every day to meet the demands of what our future customers will expect from us.
“Next year will see the relaunching of Clintons in spring and we aim to deliver an experience that you can’t find elsewhere on the High Street. This will be a combination of refits, relocations and new store openings, the latter of which we haven’t been able to confidently plan previously but, with the heritage of the Clintons brand and a forward-thinking new store concept, we believe there will be appetite for the brand in further locations.
“Being selective on store location is becoming more important than ever but we know if we can get this right, there is plenty of business out there as well as strong customer demand.
“We look up to our competitors greatly and what they offer, but we believe that our place in the mid-market end of the High Street offering fabulous choice, compelling promotions and unforgettable service will serve us really well in the years to come.”
