BrightHouse hails strong sales as it targets Yorkshire store sites

The group, which sells products including laptops, televisions and sofas to customers who pay for them in instalments, said it expects to open stores in Bridlington, Goole, York, Skipton and Horsforth, Leeds, this year as it works to achieve its long-term goal of opening 650 shops nationwide.

The firm has 135 stores in total across the UK.

It is currently recruiting staff for its newest store in Bridlington, which opens on July 16.

Speaking to the Yorkshire Post, chief executive Leo McKee said: “We look at the demographic of these towns and we also look at where other retailers are. Superdrug has 920 stores on the UK high street, BrightHouse has only 235 so the UK can take 650 BrightHouse stores.”

He added: “We open in clusters.Last year we concentrated on Kent. We also do in-fills where we have infrastructure or local distribution centres. We only have 24 stores in Yorkshire so there is lots of opportunity here.”

BrightHouse’s Yorkshire stores include Leeds, Barnsley, Doncaster, Hull, Rotherham, Sheffield, Bradford, Castleford, Keighley, Huddersfield and Halifax.

Revenue for the year to the end of March 2011 rose by 15.4 per cent to £227m, compared to £197m the previous year. Like-for-like sales were up 9.2 per cent.

Underlying earnings before interest, taxes, depreciation, and amortisation was up 16.4 per cent to £39.7m, compared to £34.1m the previous year, while operating profit was £33.6m, up from £24.8m.

BrightHouse opened 30 new stores over the 12 months and a further 30 are planned for this year.

Its customers are typically on low wages or have been denied access to mainstream credit.

This “alternative credit market” is made up of an estimated 5.2 million households in the UK. The company has more than 200,000 customers throughout the country, who typically live within three miles of their local store.

Mr McKee added: “Like-for-like sales have been very strong. Part of the success of BrightHouse is that we are obsessive about customer service. The customer services manager and I go round stores every week to talk to staff and customers.”

Hi-tech products such as smart televisions, BlackBerries and tablets are a growing area for the firm. “Our customers are quite technologically aware and they are obsessive about quality,” said Mr McKee.

He added that the 2.5 per cent rise in VAT at the beginning of the year had made little impact on the company. “Chinese labour rates have gone up by 10 per cent over the last 12 months, diesel has increased by 45 per cent, the price of cotton is up by 150 per cent, freight rates have also gone up. So two-and-a-half per cent against all of that is minuscule.

Mr McKee said that despite the travails of the High Street, which saw the downfall of Habitat, Jane Norman and TJ Hughes last week, customer demand for its products and services remains “relatively buoyant”, although he recognised that competition is fierce. “We have to be fleet of foot,” he said.

On the other hand, the company’s rapid growth is enabled by a flood of empty shops on the UK high street.

“Fourteen per cent of outlets are empty,” said Mr McKee. “There is no doubt that landlords are under a bit of pressure but within that there is still competition. What is important for us is footfall. If a store next to M&S becomes available there will be competition.

“Clearly nobody likes to see a retailer go into administration but where things happen our property people are out there all the time.”

Sales of domestic appliances are up by 38 per cent and the company is responding to the changing tastes of its customers – dark red and lime green appliances are apparently the new favourites. “We invest in customer research; we invest in focus groups,” said Mr McKee.

Mr McKee believes the company’s most important marketing tool is word of mouth. Forty per cent of new customers are recommended by existing customers and 35 per cent of staff are former customers.

He also remains positive about the long-term prospects for BrightHouse. “We are a responsible lender, serving families in some of the most socially deprived areas of Britain. We understand their needs and they value the convenience of making weekly payments and the personal relationship they develop with their store manager,” he said.

Firm defends interest rates

OPERATING in a credit-impaired market often leads to criticism that BrightHouse is preying on the poor.

While the retailer charges high-street prices, customers typically pay back their debts over three years at a 29.9 per cent annual rate of interest, adding sometimes thousands of pounds on to the final cost of a product.

But chief executive Leo McKee insists he is not interested in pushing people further into debt, saying BrightHouse offers people access to aspirational products they couldn’t otherwise afford.