OFFICE, WHICH INCLUDES OFFSPRING, IS AN OMNI-CHANNEL RETAILER WITH A PORTFOLIO OF STORES AND CONCESSION OUTLETS IN THE UK (78 STORES), GERMANY (7 STORES) AND REPUBLIC OF IRELAND (7 STORES). THE PHYSICAL STORE OFFERING IS COMPLEMENTED BY AN ESTABLISHED, WORLD-CLASS ONLINE BUSINESS WHICH CONTRIBUTED 45% OF RETAIL SALES IN THE REPORTING PERIOD.
STRONG RECOVERY IN STORE SALES POST PANDEMIC
Store sales recovered strongly as the UK economy opened up as COVID-19 restrictions were gradually relaxed, social and work life normalised and tourist numbers increased, with Office growing store sales by 74%.
Online sales declined by 17% from the high base set in the previous financial period, which included 18 weeks of store closures in the UK, and accounted for 45% of retail sales (2021: 63%), up on pre-pandemic levels of 34% in 2019.
While Office planned to reduce trading space by approximately 12% in the 2022 financial period, with the potential closure of up to 22 marginal or loss-making stores, favourable negotiations with landlords and the stronger than expected post-pandemic recovery resulted in fewer stores than planned being closed.
After 22 store leases were renewed, only six stores (including two concessions) were closed, with trading space reducing by 4% (2021: reduction of 22%). Several of the leases were renewed on short-term flexible contracts, which are favourable to Office in the current uncertain retail trading environment.
Office plans to open additional stores in certain key locations, with two new stores planned for the 2023 financial year, while four major stores are planned to be modernised. Leases will be renewed based on the strategic importance, location and profitability of stores.
A new store design concept has been developed, which will be implemented in the proposed high-profile store opening in Battersea Park, London, and in new and refurbished stores thereafter. Based on the vision of creating “her ultimate shoe closet”, the design includes sustainable shopfittings, premium finishes and an effortless customer journey in the store.
ONLINE AND E-COMMERCE
Office continues to invest in its e-commerce capability with improvements to the online channel and online marketing. Customers can choose to have their purchases delivered to their destination or store of choice.
The digital user experience was enhanced during the year with the launch of a new Office website homepage, site search optimisation and image optimisation.
The branded footwear market continues to be heavily
influenced by social media. Office and Offspring continued
to grow their
e-commerce capability with strong support on social media, with over 1.3 million followers across Instagram, TikTok, Pinterest and Facebook.
To extend payment options available to customers, a third-party 'buy now, pay later' option was launched on the Office website in November 2021. The payment arrangement is between the payment provider and the customer, and Office carries no payment risk. By year end, the payment system already accounted for approximately 20% of all Office's online payments. In-store 'buy now, pay later' payment options are planned to be introduced in the new financial year.
A new omni-channel enabled point-of-sale system is planned to be implemented across the store network over the next two years, and this will enable a seamless online and in-store experience when paying, picking up a 'click & collect' order, returning goods or ordering online in a store.
An express 'click & collect' offering is proposed to be launched in the second half of the new year to increase convenience for customers while digital gift cards will be introduced to support the physical gift cards available in store.
Customer relationship management will be a key focus in the new financial year to increase customer retention and reduce the volume of dormant customers. A number of strategies have been developed to enhance and personalise communication between Office and its registered customer base.
Trading through concession outlets allows Office and Offspring to access customer footfall within leading department stores, both physically and online, while simultaneously offering a more flexible physical footprint and cost base. Office and Offspring work closely with the concession partners to review performance and assess the need to open, relocate, adjust or close space within the host store portfolio. At the end of the period, Offspring had 10 concession outlets and Office had one.