Sex. There, I’ve said it. But not so long ago, talking freely in public about this subject was not exactly the done thing. However, plans by “adult store” Ann Summers to expand its chain to 100 shops within three years and take over lingerie retailer Knickerbox reflect the changing attitudes of UK retailers towards the booming sex industry.
When Ann Summers opened the first of its 27 existing UK stores in 1972, in London’s Marble Arch, the group offered a new proposition to consumers, selling various adult lingerie and sex toys.
The company, which produces an annual turnover of £43m, has since expanded into overseas markets, launching its first Australian franchise in Sydney last summer. It plans to continue its foreign development by setting up franchises in Saudi Arabia, Japan and California later this year.
With the growing opportunities provided in the UK, the highly successful German sex shop chain Beate Uhse is now looking to add to its 200 outlets in Germany with the opening of 50 to 60 in the UK by 2002.
An Ann Summers spokeswoman denies the bid for Knickerbox is a reaction to Beate Uhse’s own plans, claiming the proposed acquisition is a “wonderful opportunity to expand”.
“We submitted a bid for Knickerbox last week. It has 50 sites nationwide many of which are prime locations. We initially plan to keep the Knickerbox brand, but there is a possibility we would rebrand a few individual stores as Ann Summers if the location demanded it.”
However, Retail Intelligence senior retail analyst Steve Davies acknowledges that Knickerbox is a well known brand, but believes the entire chain would need to be rebranded if the Ann Summers bid is successful.
“I’m not convinced how much brand loyalty Knickerbox has. It certainly has recognition, though whether it has become a destination brand, I doubt really. It has lots of experience, but it’s never established itself as a viable player in the market since the 1980s and I think there is little value in keeping it as Knickerbox,” he maintains.
Davies also describes the lingerie market as “unusual”, having been dominated by one brand for a long time. “Marks & Spencer has a 30 per cent share of the market and none of the mass market competitors have ever really competed with it. Those who go head to head with M&S normally come off second best.
“Ann Summers is certainly looking to become more mainstream and promote the main lingerie side of it, but it is a very specialist organisation and therefore needs to keep its own definition in the market,” adds Davies, highlighting the importance of it not being “too in your face” for male customers.
Aiming to create “a bit tougher and male-oriented” stores in London, Ann Summers recently appointed Silver & Co and MHG Design to look into redesigning the chain’s stores in the capital. BDG McColl is also carrying out extensive market research into Ann Summers, although details are currently under wraps. Silver & Co is due to refurbish the interiors, frontage and signage of the first of the three existing outlets in Soho this summer.
“The London shops need a much edgier and attitudinal approach than the regular Ann Summers high street stores,” explains Silver & Co managing director Jonathan Silver. “They want something that appeals to clubbers and is a bit tougher, because there is a big market for club gear, and not just for specialist clubs.
“The tameness and user-friendliness of London stores is not doing the business. They need to have a feeling of today, without being tawdry, but with class and panache combined with toughness,” says Silver.
Though a “tougher” sub-brand and associated name developed by Silver & Co are likely to be finalised this week, one retail specialist believes Ann Summers needs to create an entirely new brand for its retail division.
Creative Action managing director Ian Silverstein says: “Every kudos is being broken as time goes on, but the core problem is that people still associate the name Ann Summers with sex shops. To be successful on the high street, it needs a new retail brand. If it can get over the planning and branding problems, it can then challenge M&S. Knickerbox has a similar problem and I certainly wouldn’t walk into there on my own.”
Echoing Davies’ warning about being “too in your face”, Silverstein also sees the Web playing a vital role in the lingerie group’s future. “Its biggest market will be e-tailing and the Internet.”
Reed Brand Communication creative director Carolyn Reed thinks the possible takeover is a “great opportunity” to open the sex education debate.
“Sex education in the UK is way behind the rest of Europe. But it can become a less taboo subject by using these high street stores to combine the two,” she says.