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THE BIG INTERVIEW: Re-calibrating Chisholm Hunter

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Growing up in Easterhouse, a Glasgow suburb synonymous with deprivation and crime in the 1970s and 80s, gave Chisholm Hunter’s managing director Harry Brown a steeliness and determination to carve a new life for himself and his future family. The jewellery and watch business has delivered exactly that, but he has never forgotten the struggles of his early years, and takes nothing for granted that his company’s success will endure without endless hard work and re-calibration for the ever-changing modern market. Rob Corder caught up with the tireless executive as he was building a new flagship in Glasgow that, he says, will take customers on a peerless journey of discovery.

WATCHPRO: Chisholm Hunter is a rare breed these days because you are still expanding your network of stores. But take me back to the beginning, because people may not realise that you are not a second or third generation owner, you started this business from scratch.

HARRY BROWN: I was raised in Easterhouse, in the East end of Glasgow. My first job in the jewellery industry was as a 16-year-old tea boy or junior in one of the multiples, and I worked my way up from there, eventually into a management position where I spent ten years. I have always tried to make something out of nothing and I think coming from a working class background has helped me in this respect.

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It always has been difficult to get prime sites for a new jeweller in the centre of Glasgow. It took me about five years but I was eventually able to get a location within the Argyll Arcade in 1989. My first shop fit was around £500, and it looked it in all honesty. Compare that to today, our last shop fit cost £1.5 million. Times change! After a couple of years, I bought a second store in the Argyll Arcade, which was Chisholm Hunter from a gentleman called Sidney Rose. He threw in the Chisholm Hunter name with the lease.

WATCHPRO: How far back does the Chisholm Hunter name go?

HARRY BROWN: 1857. It was started by Mr Hunter, who brought in Mr Chisholm. The Chisholm family sold to the Rose family who then sold to me. It has been a family business for a long time and has heritage for people in Scotland so it was good fortune getting the name.

We have grown the business through a number of well-timed property acquisitions.

What I feel makes us unique is that there is a lot of drive to create within the team. We have always had that relentless desire to improve and grow. If you look at our people, they share that drive and enjoy the journey we have been on together.

Every year we have to re-calibrate. We have to retrain our people. We have to learn about new exciting brands

Recently, we have secured some additional prestigious watch brands and the quality of our shop fits have to reflect the quality of what we are selling.

There is excellent training available within our industry such as The NAJ courses. I have personally taken some including the jewellery diploma, FGA, diamond grading diploma. I feel they have really enhanced my understanding of the business. Therefore, we really encourage our team to take these courses as well. Training is costly, but not investing in this manner would be far more expensive in the long run. We always strive to invest in our people and it is great to see them grow as time passes.

 

Harry Brown presents a gift at the annual Burns Night charity dinner for Spina Bifida Hydrocephalus Scotland.

 

WATCHPRO: Is there good training for business skills?

HARRY BROWN: This year we have tripled our budget for learning and development. We are very committed to that. The feedback I am getting from our managers is that it is great support for them.

WATCHPRO: And your teams have to be highly educated in the watches they sell: the mechanics, the collections, the history. How much do the brands support you with that?

HARRY BROWN: The brands are incredibly supportive. They understand that our people, the cornerstones of our business, stay with us a long time so the investment they make in training pays off in many ways. Brands don’t want to see a constant turnover of staff because the training goes to waste.

Our longest-serving people have been here over 30 years and we have a lot at 15-20 years’ experience. It is important that people are continually supported and developed.

We have very high standards. If I were running a restaurant I would want two or three Michelin stars and I am looking for people that share that vision. They don’t want to work in a fast food place, they want to work in a fine dining restaurant.

Every year we re-calibrate and aim higher. Our mantra for the past 30 years has been, “a cut above,” and we aim for that in everything we do. Our competitors are not standing still, they are also investing, so the tide hopefully lifting for all of us.

WATCHPRO: You are in the same market as some incredibly well run retailers like Beaverbrooks, Fraser Hart and Goldsmiths. How do businesses like yours, and these competitors, maintain standards when you are up to almost 30 stores?

HARRY BROWN: Our managers set their own targets and we pay bonuses when they hit those targets. Not many companies would do that. We listen to and learn from our teams. We empower them. They have profit and loss responsibility for their own stores.

WATCHPRO: There is a lot going on in Glasgow today. Laings has just completed a big refurbishment, Watches of Switzerland is opening an Omega boutique and, according to its guidance to the stock market, will be converting its multibrand store at the top of Buchanan Street to a Rolex boutique. Rox has big plans in the Argyll Arcade for a huge new showroom. It all seems to be happening here and is a great example of the constantly elevating standards across UK cities.

HARRY BROWN: Buchanan Street is the second busiest footfall street in the UK after Oxford Street in London so there is movement and changes all the time. Everybody is recalibrating, that is the retail landscape. I am not too focused on what other jewellers and watch shops are doing. I want to bring customers to Chisholm Hunter from other retailers across the spectrum; give them a great experience. If somebody is going to spend £100, are they going to buy a pair of trainers or a necklace? It is our job to sell them the necklace. So I am more focused on succeeding within the whole retail landscape. That is the challenge.

We would like to see our competitors do well because that is the sign of a healthy industry. All we hope is that we get our fair share.

MAX BROWN: It is encouraging to see all of the development going on in Glasgow. Harry has his roots here after all.

WATCHPRO: As a retailer you focus on prime locations on high traffic streets like Buchanan Street in Glasgow, Princes Street in Edinburgh and in the many shopping malls where you have stores. You must have a keen interest in retail as an overall category succeed. If high streets die, you will suffer with everybody else.

HARRY BROWN: In general, sites that were average are poor now, and sites that were always excellent like Buchanan Street, Princes Street, Bluewater, Kingston, are not affected. With that said, we have a few stores that may not be in the conventional high footfall cities, but they are located in key areas within those cities and, as such, do very well. Footfall may be down, but spending is not.

 

Chisholm Hunter has partially opened a major new flagship on Buchanan Street, Glasgow. The store will have a vast subterranean showroom when it fully opens later this year.

 

WATCHPRO: You have 29 stores. Are they all in A1 locations?

HARRY BROWN: Things do change. You can have a situation where a store like Marks & Spencer closes and that affects an area. But you just have to reboot and keep coming up with ideas that will delight the boss – our customers.

I talk about the company as an upside-down pyramid. At the top are the customers, next the people selling, then the branch management, regional management and at the very bottom is me. The full team are empowered to come up with ideas. We will listen to their views on where they think the market is moving.

I believe there is a very bright future for retail, but only if we keep investing in our people, in our sites and in our products.

WATCHPRO: In your upside-down pyramid analogy, the ideas flow down from the customers and your sales staff?

HARRY BROWN: In an ideal scenario, yes, but I have a few ideas myself too. Some are good, some are average and some are poor. It is the team that has to put these ideas into action, so if they all tell me, look boss, I think that is the worst idea I’ve ever heard, it is probably not one to go forward with. They are the people interacting one-on-one with customers, so I have to listen to them.

WATCHPRO: You mentioned that your latest shop fit cost £1.5 million. Are you always looking to set new standards when you invest that sort of money in a store?

HARRY BROWN: Our aim is always to maximise potential and we invest accordingly depending on the location. The potential is significant for Buchanan Street as it was for Princes Street, Edinburgh. But all stores are equally important because the people that run them are equally important to me. You might have a shop that looks like a fantastic flagship, but when you calculate the rent and other costs, you can find you are making greater profits in a much smaller store. It is not as black and white as it seems, so it is not a great idea to get hung up on flagships.

WATCHPRO: In different locations you can get different brands, and certain watch brands define the nature of stores.

HARRY BROWN: That is right. Watch brands can be cautious with new partners, but relationships can develop quite quickly when things go well. We work in collaboration and the ones that have tried us and worked with us have been very pleased. My mantra has always been to keep raising standards, and that works well with our brand partners.

WATCHPRO: It has been an interesting relationship with Omega, and that appears to be a key partnership for you.

HARRY BROWN: I would say all of our partnerships are important to us. They are like members of the family, we do not talk about any watch brands being more important than others, but for sure Omega is a fantastic brand.

WATCHPRO: There was a time when the retail industry, including the watch sector, thought that customers were going to abandon shopping in stores and buy everything online. It does not appear to have turned out that way.

HARRY BROWN: We make a distinction between customers and clients. We have stores where they get cakes from clients. They even get invited to family weddings. We have amazing relationships with people we call clients rather than customers because the relationship is built over many years. That is a trend. People’s expectations are higher and we have to respond to those expectations.

Perhaps there has been an overreaction to the importance of standalone internet and a tendency to underestimate the importance of physical stores. In my opinion, the reality is that both need to be married together. You need excellent people, excellent website and excellent products. If you get all of those things together you have a winning formula.

WATCHPRO: It depends what end of the market you are operating in. The fashion brands have moved much faster to ecommerce than the luxury Swiss watchmakers.

HARRY BROWN: I remember buying something for my mum that cost eight pounds, but that felt to me like eight thousand pounds! I still think there is emotion about buying something for £50, and it is the job of jewellers like ourselves to create that experience. It might be that the products could be found for £5 to £10 cheaper on the internet, but there is no pleasure in the purchase. I think people will be prepared to pay a premium for the right products sold in the right way. Nobody expects to walk into a great restaurant and pay Burger King prices. We have invested a lot in our websites and our ecommerce sales are growing nicely. There should be synergy between the online and bricks and mortar. You might attract a younger client online who may visit stores down the line.

WATCHPRO: In many industries, we have seen ecommerce overwhelm entire categories. iTunes destroyed record shops, Amazon all-but wiped out book stores, Asos and others have fundamentally changed fast fashion. There are many examples where ecommerce has been far more disruptive than we have seen so far in the luxury watch and jewellery industry.

HARRY BROWN: I think that goes back to emotion. What we are selling, whether it is £50 or £5000, it creates everlasting memories, it is often an occasion like a graduation, anniversary or birthday.

WATCHPRO: Would you say that your ecommerce has been instrumental in maintaining what is now a network of 29 physical stores?

HARRY BROWN: I think it has. It is the synergy between the two that interests me; how they work together and enhance one another. Our job is to deliver a great experience, build our brand and build the other brands that we work with in the right way. I am committed and the people I work with are committed to making the stores we have the very best they can be. On top of that, we recalibrate every year to raise the standards. There is always something we can think of to give our clients a better experience.

WATCHPRO: Right now, there is so much talk about watch brands opening their own boutiques and ecommerce stores. How does this affect your thinking and recalibration when you are looking at investing in store fits costing £1.5 million and stocking a certain portfolio of premium brands?

HARRY BROWN: I believe retailing comes down to this fundamental; The best businesses tend to do well, the mid-level will struggle and those with the lower standards will lose out. In the long term, there is continual readjustment. With regards to the potential of mono brands all I can say is that we greatly value the partners we have. I hope that we are as precious to them as they are to us!

WATCHPRO: Selling high end watches seems to be increasingly about making the process a real experience. Have you adapted to that?

HARRY BROWN: We have. For example, in Edinburgh we have apartments above the store where clients from overseas are able to stay. It is an amazing location overlooking the castle. When they come into the store they might have some champagne and we can show them some watches. We try to give a really memorable experience, which I think is a trend that I believe will continue.

WATCHPRO: I have spoken to retailers like David M Robinson, who says that their team runs the equivalent of 30 weddings per year, such is the investment that goes into client events. Can you create experiences as intimate as that when you are running a national network of almost 30 stores?

HARRY BROWN: I believe it can be done with the right leadership. We certainly have multiple events in every store.

As far as our team is concerned, we need to give them the training and support to emphasise the importance of building deep relationships with our clients. It is a different to the internet where people just want the best price. We need to emphasise the importance of client relationships.

WATCHPRO: The infamous millennial generation that we thought might never set foot in a store appear to be just as grateful for a great experience, perhaps even more so since they want to Instagram everything. They are looking for authenticity.

HARRY BROWN: Authentic is a great word, and describes what we are trying to do perfectly. We are not just chasing the next buck, we have a long term view. That has been the case over the past 30 years in business. We are always investing for opportunities over a ten year horizon.

If you look at what we are doing in Buchanan Street, that was a deal we started working on 10 years ago. The stores we are opening in Leeds and Dundee have been in planning for many years.

WATCHPRO: When are you opening in Leeds?

HARRY BROWN: Spring this year.

 

An artist’s impression of how the Leeds boutique will look when it opens this Spring.

 

WATCHPRO: Your Edinburgh store is built for hospitality. It must be fun being a Chisholm Hunter customer there.

HARRY BROWN: The aim is to make it fun to be a Chisholm Hunter client anywhere in the country. But I do concede we cannot give people a view of Edinburgh Castle from every store!

WATCHPRO: A few years ago there seemed to be a feeling from the brands that they did not need retail partners and they wanted to sell direct because they felt it was more profitable. That argument appears to have been turned on its head, and now brands are keener than ever to work with the best retail partners.

HARRY BROWN: I do get that sense. As retailers, we are experts in what we do. When you look at the brick and mortar sites that we retail from, our partners understand that we work hard to do a fantastic job. And there is a long termism in our business. We do take a 10-year view.

WATCHPRO: Do you think the brands are beginning to listen more today to the views and advice of their retail partners rather than might have been the case a couple of years’ ago?

HARRY BROWN: They are in a competitive situation and I think they have to. Our partners have always been both incredibly supportive and attentive over the years. The boss of our business is our customers, and if we or any business stops listening to their customers, they probably do not have a future.

 

 

Chisholm Hunter’s flagship on Prince’s Street in Edinburgh.

 

WATCHPRO: Along with brands returning to the view that working in close partnerships with retailers, we are also seeing a trend towards the brands wanting to work only with the very best retailers. They want higher sales from fewer doors with the best partners, which seems eminently sensible. What is your view?

HARRY BROWN: If you look at our figures, which I know WatchPro does, our growth over recent years has been among the highest in the industry. So the team’s hard work is translating into sales, and hopefully also into smiles on people’s faces as they leave our stores. It also shows in the smiles of our team. Every year we need to grow that, it is a constant challenge to maintain and improve standards in our business. I make mistakes occasionally, but the vision is that the Chisholm Hunter team will make less.

There are some people coming into our business as 16-years-old, and they may have fantastic ideas because they have fresh eyes. Every person is important within the business. I believe the secret of effective management is to listen to everybody. If we do not agree, we have to explain why so that every opinion is valued.

WATCHPRO: Have you seen much change within the Chisholm Hunter product mix over the past couple of years?

HARRY BROWN: It is constantly changing because I have a buying and merchandising team that is always telling me about the latest trends. Change is a constant and improvement is a constant.

WATCHPRO: Are you doing more business in watches as a percentage of sales against jewellery now that you are selling brands at higher price points?

HARRY BROWN: It varies store to store. We have places that are doing fantastic business in diamonds. The challenge is to focus on the needs of customers within the parameters of which brands we can and cannot get.

WATCHPRO: Some of your competitors have steered heavily towards luxury Swiss watches, but you have always maintained diamonds, jewellery and bridal. Is that an important customer acquisition point?

HARRY BROWN: I think the Chisholm Hunter brand name is associated with a strong bridal and diamonds business. There is no point bleating about the brands we cannot offer, we have to do the very best with what we can control. We could complain about Brexit or anything else, but let’s look at the potential today with the things we can affect. The day we stop thinking about improvements is the day I should probably retire.

WATCHPRO: Do you have a trading update?

HARRY BROWN: Last year’s turnover was £38.5 million, with profit up 6%. That is the 2018 financial year. There was a lot of investment in shop fits, so we are pleased with that. This year sales are up double digits so far.

WATCHPRO: If you look at macroeconomics, we have high employment, rising wages, low interest rates. There is a danger we are jumping at shadows worrying about impending doom.

HARRY BROWN: True, but the feel good factor is important. Do people feel good about buying that watch or diamond ring? I heard about a survey this morning that found 40% of the population say that Brexit has caused them psychological stress. That is not a statistic to dwell on too much over Christmas.

We need to be positive, we need to keep smiling, we need to keep making clients feel special.

WATCHPRO: Have you ever been asked by Baselworld what you would like to see from the show from a retailer’s perspective? How do you feel about going to Basel, SIHH, Swatch Group back to back?

HARRY BROWN: I guess it will settle down in the future and we have to adapt. There are so many hours in the day so we may need plan for different people to visit different shows. There are lots of ways to communicate with the brands. You have highlighted the question of whether Basel is the right place for a show of that size, or whether it could go somewhere better. But they have invested a lot of money, so it may not be easy to move it. Thank goodness it is not a decision I will be involved in!

WATCHPRO: What do you think of the timing of the end of April, beginning of May?

HARRY BROWN: I am sure the suppliers and buying teams will do a sterling job and work it out.

WATCHPRO: I quite like the fact that there is more newness through the year rather than everything coming out in Q1.

HARRY BROWN: I love the excitement of newness. That is what our clients want to see, and they are our boss. There is an insatiable thirst for something new.

WATCHPRO: What can you tell me about the coming year or so?

HARRY BROWN: The significant increase in our training and development budget is a big deal for us. We have great people that are well supported.

This is a family business and we want to keep it feeling like a family business that cares and commits to doing the right thing by our clients. But it has to be a meritocracy – nobody is going to have their ideas and aspirations overlooked.

Core values are important, and that is going to be a big focus for us next year. We are not just going to talk about values, we are going to live with them. If you look at the banks before the financial crash, they all had corporate social responsibility programmes and core values, but if you look at how the management behaved, it was like they did not apply to them. We need to demonstrate belief in our values at all levels consistently.

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Rob Corder

The author Rob Corder