Customer obsession rewards ‘do it for me’ chain

The national retail chain, which has 253 stores, including 27 in Yorkshire, reported sales of £266.5m for the year ending March 2012, up from £227.7m the previous year.

The group, led by retail veteran Leo McKee, said like-for-like sales increased by 7.3 per cent. Operating profit was £34.8m, up from £33.6m in 2010.

Mr McKee said the rise was due to “an obsession about understanding the customer and what the customer is looking for”.

He told the Yorkshire Post: “We make sure that we have products our customers are looking for. Our customers are looking for quality, not necessarily the cheapest, but competitively priced.”

He added that BrightHouse, which has 3,000 staff, also has an “obsession with colleagues” and making sure that employees are well trained. This is because of the increasing consumer expectation that staff will do more for clients.

“We are moving from a world of DIY to DIFM – that’s “Do It For Me,” said Mr McKee. “For that reason, we make a big investment in staff training.”

Alongside this “absolute focus” on the customer and colleague, the chief executive said “cash is king – you have to stay on top of that”.

He added that Dunelm, Primark, Next and Pets at Home were all thriving during the downturn because they follow the same principles.

BrightHouse sells branded products such as televisions and sofas to credit-impaired customers through weekly payments.

Its best-selling TV set is a 47-inch screen LG, which retails at £1,196, although customers end up paying around double after interest charges and service cover.

Mr McKee defended the private equity-owned group’s business model, which has faced criticism from consumer campaigners and charities who accuse it of exploiting vulnerable people.

He said that the 29.9 per cent APR “is not only competitive with the high street but if you look at the alternative credit market it is the best”.

Mr McKee added that BrightHouse’s service cover is optional and includes an extended warranty and right to return if customers decide they can no longer afford a purchase.

And he said the retailer has introduced manufacturers’ product codes, allowing customers to make more meaningful price comparisons.

On the question of arrears, Mr McKee said: “Our bad debt as a percentage of sales is falling, which is counter to the industry.”

Last year, the group wrote off £24m – around nine per cent of its revenues.

Mr McKee added: “I can look you in the eye and say to you, whether it is the actual price paid itself or the percentage rate of the optional service cover, that it is competitive with the high street.”

BrightHouse opened a new store in Selby last week and plans to open another six or so in Yorkshire.

Mr McKee said he is looking at Harrogate and Goole and suggested that the suburbs of Leeds, Bradford and Sheffield could also take additional stores.

He said the vast majority of Yorkshire customers are responsible and pay every week.

“Yorkshire people are a bit like that. They don’t like being in debt. Like the Scots, they like a bargain. They like to feel that they are getting a deal,” he added.

BrightHouse opened 25 stores over the last year. It plans to open another 35 in the current financial year, which is expected to create more than 400 new jobs.

It said TV sales surged in the first half due to the Euro 2012 football championship and forthcoming London Olympics.

But Mr McKee said consumer confidence remains fragile and highlighted the forthcoming rent quarter day in September as important for retailers.

He said: “We have all this stuff with banks. The bad feeling. The euro. Where’s the good news?”

He added: “There is no doubt it’s tough out there. Those who will succeed are those who not only talk the talk but walk the walk. Don’t talk about what you’re going to do, do it.

“Know the customer, deliver the service and listen to what they say. Take the feedback, even if you don’t like it and see what you can do with it.”

Mr McKee is a former executive at Levi Strauss, Thorn EMI and the Kingfisher Group. He has been CEO at BrightHouse for about six years.

Vision Capital bought BrightHouse from Terra Firma in a deal said to be worth £170m.

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