Paul Smith Exec Chair: Working From Home Doesn't Work

23:43And Paul is that brand. You know, Paul is that premium brand that is the kind of, we talk a lot about Ralph Lauren is kind of, you know, more successful than we are in a much bigger business, but a brand that we hugely respect and look up to. And Paul, of course, knows the man himself. So, you know, can Paul Smith be the British equivalent of Ralph in years to come in terms of scale, in terms of ambition, in terms of positioning? And the Americans love that sensibility. They also love Britishness. I mean, Americans are really fond of all things British. And Paul is that quintessential British gentleman.

24:23And the brand performs strongly in the States. And all we're doing or I'm doing leading is to fuel that growth and give that opportunity. And you'll see Madison, but you'll see other projects emerge in the US. I also like the fact that, you know, post-COVID, there's a real back-to-work culture in the States. People getting back to offices faster, I think, in the US than almost anywhere else in the world. And with that, people are starting to re-evaluate their dress code. And so, you know, smartening up, thinking about wearing, you know, structured jackets again, thinking about wearing suits again, thinking about a tie again.

25:01I think the growth opportunity to dress people well back into their office environment in the United States is a real one and is set to continue for quite a few years ahead. Do you notice that physically when you're in offices and doing business in the US compared to here?

25:19Ewan Venters:Oh, much, much more so. I mean, Britain kind of needs to step up and get back to the office as well. I mean, I think that, you know, the culture of it's all OK to work from home on a Monday and a Friday is kind of taboo, really. And we need to, I understand the need to be more flexible with workforces. I understand that people can still be very effective on the move from home, from different environments. But I think there's, I think the Americans have got to it faster than we have. But as we know, quite a lot of things that start in America trend-wise will percolate around the world. And so I think it's great to see, and I see it firsthand, people back in the office.

25:55Well, it's been a hot topic, you know, right now, Trade Union Congress going on and, you know, reports about the government looking at sort of strengthening an employee's right to the ability to work from home. And, you know, the line sort of goes, it's not a perk, it's a necessity for some people's lives. And I'm a huge fan, a believer in flexibility. I mean, but let business figure out the flexibility. Please, let's not have government intervention on whether you can work from home or not. I mean, you know, let employers do the right thing for their organisation. It's got to be the right solution.

26:34So flexibility is great, but we touched on AI, didn't we? You know, I'm a huge passionate person about education, about young people, about how people learn. And, well, you know, I started my formal retail career, 16 turning 17 in Sainsbury's. If I hadn't been hanging around every day with these great bastions of business, how would I have learned? And how do young people learn on a screen tucked away in home environment? It just doesn't work. And if we want a productive economy for the future, we've got to face into just some common sense stuff. and that is you've got to be on the ground with people showing telling explaining having those great social interactions social moments and and i would plea that government please stay out of that sort of conversation do you have a sense that we're going to be on a productive pathway for

27:35Ewan Venters:business in the uk look god willing we will yeah for sure do i have a sense i think it's uh i think it's 50-50. You know, I think we could turn the right corner with enthusiasm and energy of our new Prime Minister, or we could go down a dark path. And I hope clearly we positively turn the right corner and start to, you know, just, you know, deregulate, de-layer as much administration as possible and put the power, well, power is perhaps the wrong word, but put the onus back into the free market to drive the necessary growth to generate the tax revenues to have a healthier and a more fairer society.

28:17When you say 50-50 and you say God willing, is the budget a point for you where it might help you make a decision about which direction that is?

28:25Ewan Venters:Well, the budget will definitely, it's a key moment, isn't it? And I think if the government doesn't make the right bold decisions at the time of the budget, it'll then be too late because within a blink of an eye we'll be at an election. So this is their moment. You know, October 26th, I think, is their moment, I think, to make all of the right signals that they want to make. And, you know, you've got to admire our new Prime Minister at the minute. You know, he's really gripping some key things. And so let's see how much grit he and the team have got to deliver something positive. I think it might be 28.

29:05just in case you've got a big social event planned for the Tuesday night. But either way, the Prime Minister has been seen in Paul Smith.

29:14Ewan Venters:So I hear. Been seen in quite a lot of British brands, which I love. Isn't that great that our Prime Minister is proud and takes an interest in the creativity of the fashion industry. So, yeah, he's been seen in Paul Smith. He's been seen in a number of British brands. So well done him. So not, you know, it's a question we've asked of other fashion brands, actually. Would you have a concern about a political leader wearing your stuff? Absolutely not. I think Paul has, Paul doesn't know Andy Burnham, nor do I, incidentally, but I think Paul has dressed virtually every British Prime Minister since Thatcher.

29:53It's reassuring to hear that Andy has been into one of our shops, or somebody has on his behalf, at least, and is happy to wear some Paul Smith. So just to finish our sort of budget part of this conversation, as it's merely only a few weeks away, are there certain things that would actually tell you whether this government was on the path you think they need to be on for businesses like yourselves to be able to grow the way you want? Yeah, I think how they respond to employment rights and the employment rights bill and how any appropriate amendments are made around youth unemployment in particular.

30:29You know, I think that's a key thing. The retail sector, the hospitality sector, both industries that confidently can employ lots of, you know, young people. And we all know that youth unemployment at the minute is a major issue. So I think taking some positive steps in that area, business rates gets discussed extensively and the modernization of that planning will also be true. For me, though, possibly one of the singular biggest things that they should make a public announcement on is the reintroduction of tax reshopping in the United Kingdom. We all know that when we were part of the European Union, we offered tax tax back to international visitors.

31:10When we left the EU, we were duty bound to either withdraw that from the rest of the world or extend it to the European Union. And a political, not an economic, but a political decision was taken then to withdraw. That's cost the country, you know, 20 billion plus in revenues in growth opportunity. And when you have a number, I was going to say pluck a number out like that. I'm sure you haven't plucked it. It comes from somewhere. I just wonder how you've seen that play out, given whether it's in your time at Paul Smith or in your previous roles, where tourism will clearly play a big part in the Selfridges and the Fortnum and Masons in London.

31:52So you can see it in retail data. You can see it now in the behaviour of international visitors who are coming from, you know, from the Middle East. They're coming from Asia. They're coming from America. How much time people are now spending, for example, in Paris or in Milan as part of their European trip. So they'll still come to London and the United Kingdom, but they they will go to buy more shopping in some of these continental European cities. You can even see it in our own data now where, for example, a young couple in Scotland might have chosen, say, to come to London for a shopping weekend.

32:32Nothing to do with tax-free, but they would have come because maybe greater choice or more variety. And now they're able to take a flight to Paris and make some purchases, get their tax back, which can often pay for their hotel stay, pay for their flight. And we can see that data. So the evidence is quite clear that it's having a negative impact on the retail sector, hospitality, taxis, accommodation, the theatres. And so I find it odd that we, somebody somewhere, probably in Treasury, think that it's OK for Britain to sit outside a system that is well adopted and well used across the world. And for some reason, we think it's OK to not do that.

33:21Given that decision was made, as you put it, politically, the Treasury will say that the withdrawal has saved the exchequer more than half a billion pounds a year, reintroducing tax-free shopping, therefore comes at a significant cost.

33:39Ewan Venters:But it's classic. You can't cut your way to growth. You've got to invest your way to growth. And so, of course, any sober Treasury official will be able to put some sort of argument to not make a decision. But the most successful organisations and the most successful countries are those who invest. And how come France see it differently? How come Italy sees it differently? How come so many other countries see it differently? So I would – this is where leadership matters. This is where leadership matters. and the leaders have got to get together and go, no, there's a much bigger prize at stake here.

34:15And the thing that nobody can truly evaluate is all of the other sectors that benefit from the importance of the international visitor. And that's not just the retailers, as I said. And incidentally, this is not a London argument. This is an important point that affects Manchester, Birmingham, Newcastle, Edinburgh, Glasgow, affects every part of the United Kingdom. And in particular, you know, we are well known for being one of the great countries with some of the finest universities in the world. And thankfully, we make it difficult, but we're still attracting lots of international students into those universities.

34:56Those people, when they come, when their families come to visit, it's all about engaging with these people to extend their reach, to extend how they can spend their pound, their dollar, their euro into this country. and we make it difficult. And I think that's a prime strategy that I hope our Prime Minister and our Chancellor will show some leadership on and make a step change. If they do that, the goodwill that they'll generate across business, I think will be extraordinary. Is notable the difference in tone, the way you talk about the US market and the UK market, not just because of maybe how Americans might view the Paul Smith brand in itself, but is there more to it than that about the American customer and their approach?

35:38Ewan Venters:I think there's a, you know, when I talk about economics and I talk about tax and so on, there's something about wealth, and I use the word kindness, there's something in business, something about the brand of the country, about welcoming people, being friendly, being seen to be a place to do good business. People might not think America's the place for that at the minute with the trade talks going on. I know, but, you know, sensible people can see beyond, you know, a leader. You know, the president's the president. You know, he's not going to be there for much longer. And life moves on and countries see beyond, you know, just a political leader.

36:17So I think most sensible Brits and most sensible Americans can see that there is extraordinary strength between our two great nations on trade, on security, on commerce. on culture. And I think that that's part of the reason for my passion and my sort of belief that, like Paul Smith, part of our recovery plan about prospering in America is part of all of those cultural disciplines as well as just the pure commerce. What about just a straight up affordability of Americans compared to Brits at the moment? When you talk about the power of growth, Does it come to just have – do they have more money sparing their bank account to splash out on a Paul Smith item?

37:03Yeah, I mean, without question. I mean, the average income earnings in the States, like for like, is significantly higher than in the UK and in Europe generally. So an opportunity for a premium brand is spot on.

37:17Ewan Venters:I think the other thing is that we're not just – we're premium and we're value and we're quality. And again, the Americans and the affluent people of the world buy into that philosophy of spending wisely on garments that last the test of time, that have maybe a degree of fashionability, but very often things come back into fashion. And people are intrigued by that. And I think that the consumer of tomorrow will be more interested in the quality of productions and the quality of materials and the interest in how things are made and why things are made are all values that stack up with an affluent American consumer and indeed a home consumer for that matter.

38:04Just reflecting a little bit on your 17-year-old self and the life you've had in retail ever since. When you see where you are now and where you've worked for, was it in your bones back as a 17-year-old that you had an interest, a passion for luxury, for premium? Yeah, totally. Don't forget, joining Sainsbury, they were the number one grocer in the country at the time. They were the premium grocer. And I was very fortunate as a young man to be a personal assistant to the then deputy chairman, a man called Tom Viner and John Sainsbury was chair. And I spent a lot of time that kind of my university education really was being in their company.

38:47So they were relentless people, business leaders on quality, quality. And it's not always remember, it's not it doesn't always have to be expensive. It just has to be the very, very finest quality. So I was, you know, I had the benefit, the privilege, really, of being around people who had that level of determination on a can of soup and a beautiful satsuma. You know, it had to be the very best that we brought to the consumer, to the high street. And that's lived with me ever since, really. And your career, is it fair to say, will have brought sort of, you know, the getting to know people that, you know, many wouldn't have the opportunity to know, whether it's knowing the king and queen or meeting many and collaborating with celebrities along the way.

39:34Is that sort of part of the enjoyment of the sector as well as you sort of go through the decades in it? I like people you know I love engaging with people and I think that the early years of being around food and drink in particular you know gave you an opportunity to be very graceful and very sociable and to connect with people you know I've always said to anyone I've never applied for a job by the way but I've always been approached for jobs and as part of any sort of interview process whether it's formal or informal I've always said to someone before we make a final decision shall are we going to have lunch together?

40:11Because I think breaking bread with somebody teaches you everything and it's as good for them as it's good for me. And so in that sort of process, I've been fortunate to get to meet quite a lot of interesting people and share those moments and share the passion and the commitment. And maybe earlier on, I touched on how proud I am of our country and being British. And so my interaction from royalty to Stephen Fry to Judi Dench is all great Brits, aren't they, really? I mean, keep name-dropping. Everybody loves that stuff. Do you think, you know, we've touched on the working from home. You've mentioned the growth of artificial intelligence.

40:52Would you have the same career now if you were 17 years old, trying to make your way? Don't you think, in a way, the opportunity to reach an audience today, to communicate your story today is greater than ever before. I think actually being a young person today, the opportunities are even greater, providing you're willing to do the hard yards. So the sort of negative of technology and access is sometimes the belief that you can get rich quick or you can become famous super fast. Neither should be a motivation. It might be an output that you become wealthy, you become famous, if that's what you wish.

41:42But the tools that we have today for young folk to get their product to market, to create communication tools, so exciting. And so I love, by the way, I also love that there's a sort of a general undercount at the minute of going, you know, you don't need to go to university to be successful. University doesn't suit everyone. and we went through a period in our history, I think, as a country where it was pushing too many people into the university system. Now we're starting to recognise that actually, you know, good skills-based training, on-the-job training, good skills-based training is a positive thing for some people, further education, better for others.

42:23So just creating that healthy mix, but patience. Do the hard yards. So, no, I think there's every bit of an opportunity. Incidentally, I wrote down in an appraisal with my then boss, the deputy chairman at Sainsbury's, when I was 23, that I wanted to be a chief executive of a decent sized company by the time I was 40. And I was 18 days before my 40th birthday when I became CEO of Fortnum & Mason. So there's also something about write down your ambitions when you're super young. and I think statistically you achieve more if you write down your ambitions and targets than you do if you don't. Can I just finally ask you what it's like working with four?

43:12I don't know if you use the word four, Paul Smith.

43:16Ewan Venters:Every day is a new beginning. He's a genius. He's one of the Great Britons. Every day is a new beginning. It's joyful. it's a wonderful creative hub to be in. And I think he and I are forming the most beautiful professional partnership between the business and the creativity. And I think magic will happen as a result. And so can you say no to him? Do you say that won't work? Absolutely, as he does to me. And what kind of things might that come up on? Again, we touched on it with the accountant sticking their oar in earlier, But from a perspective where you're a chief executive and you're not the person who founded the business, you're not the name on the brand.

44:04At what points do you say no?

44:06Ewan Venters:Where we veered off strategy. So, you know, we're focused on retail, direct to consumer, the stores, the e-commerce, focus on North America and right size the wholesale organization. I think Paul would still to this day, you know, if he could, you know, want to sell to that independent in Pisa and get, you know, 100 pieces of clothing to that one account until I say, but, you know, it's going to cost you, you know,£5 ,000 to do that, Paul, and we're not going to make a cent. And then he'll go, yeah, OK, I get it. So, you know, I think Paul and I have got this really strong rapport about we've got a strategy, we know what we're focused on, and it's just stay focused.

44:47And I think if he was here today, he would say, you know, I have 100 ideas. You know, normally I get 10 of them done. With you and around, we do five things really well. And I think that's the magic of how business, you know, business can work without me. Was there a one-on-one, you invented Paul Smith lunch in those early days?

45:03Ewan Venters:There certainly was, yeah. And he arrived on his bicycle and I think had two or three glasses of wine. And I said, you're not going back on your bicycle, Paul. If we're going to work together, we need to keep you safe. So I think he got in a cab and the bicycle followed. suited and booted on a bicycle with beautiful shoes i hope absolutely the image i have yeah well you know he's he was a he he wanted to be a professional cyclist so he loves uh but yeah he cycled across town for lunch with me and uh it was a jolly one and uh but yeah he took a taxi home is that why the sports brand tie-ups maybe castor might see a bit more of that kind of thing yeah maybe but you know uh collaborations are fantastic but also paul smith the brand is the brand it's what we do.

45:43So collaborations have a role. We've just done a recent one with actually it'll amuse you to know that we've just done a collaboration with Barber which involves lots of tartan and so we decided to launch it at the Bremar Highland Games up in Scotland which was a fantastic afternoon attended by their majesties and various guests from around the world. So things like that I think are great and they're fun and they're exciting And so collaborations are good, but also focusing on the Paul Smith brand is the key thing for me. You Inventors, Executive Chair of Paul Smith. Thank you very much. Thank you.

46:26You Inventors there, the Executive Chairman of Paul Smith with Sean. Remember, there are now literally dozens of episodes just like that from people right across the range of business sectors here in the UK and around the world, from banking to fashion, high street retail to hospitality. So if you don't already, please do subscribe to the Big Boss interview podcast. And while you're there, it makes a massive difference in terms of how easy it is for other people to find us. If you can leave us a five star review and perhaps write something nice about an episode you have enjoyed. That's just about it from us.

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