Soft power: N.Peal cashmere and Hello Kitty

0:11Hello and welcome to The Entrepreneurs on Monocle Radio, the show all about inspiring people, innovative companies and fresh ideas in global business. On today's episode, we explore how savvy collaborations can help brands flourish. First, we'll meet the owner of a storied British cashmere house that's grown its luxury portfolio through focusing on smart partnerships and putting craft at the heart of all they do. I was always told you'll be forgiven everything by your customers, but not your product. So it's the product that's the key. And later, we'll hear from the president of the company behind Hello Kitty to find out how he's leading a brand into a new era.

0:49Sunrio's aim has always been to bring smiles to as many people as possible around the world. And we think that through this combination of sports and Hello Kitty, we're going to bring smiles to a lot of people. Soft power for you here on The Entrepreneurs with me, Tom Edwards.

1:10You're listening to The Entrepreneurs, Adam Holdsworth is the CEO and owner of NPEAL, the British luxury cashmere house founded in Mayfair's iconic Burlington Arcade back in 1936. After buying the company in 2006, Adam used his background in the wool business to relaunch the brand by improving the quality and design of the product while remaining true to its heritage and evolving its practices to meet modern standards of sustainability. Adam stopped by Midori House to discuss NPEAL's growth and new retail locations. But he began by telling me about the history of the business. It is an institution.

1:46We've been in the Burlington Arcades in 1936, and there's lots of history there, going right back to customers, Maren Monroe and Sophia Loren, and through Elizabeth Taylor and Diana, and then more the modern day, obviously James Bond, and then the current collection with Stanley Tucci. So, yeah, it's a lovely heritage brand, quality. We're more on the timeless design, and modern detailing but timeless and that's the beauty of it it's funny because i think the brands that we like and appreciate at monocle are brands that have timelessness you know as part of dna but also just not in a hurry it's letting things down a little some of the other principles you know buy less but buy better are we beginning to see more broadly in the kind of premium brand space and luxury that the narrative has caught up with the businesses that were always based on those values Has that happened a bit, do you think?

2:37Definitely, yes. I think that's the modern-day consumer. They're more conscious about what they're buying, and buying less and better and buying better, I think, is very much a theme of today. And we just happen to be sat right bullseye in that space, so it's quite a handy place to be. But I think it's super important, and particularly in this sort of modern-day era of fast fashion and loose morals, that having integrity and a quality product is at the core. And I was always told, you know, you'll be forgiven everything by your customers, but not your product. So it's the product that's the key.

3:11Tell me a bit about that then in your own approach, because you've kind of relaunched, reinvigorated the brand, haven't you, Adam? How do you do that? Because I'm always really interested in this program in talking to businesses that innovate and change the message, change some of the principles, but are respectful of that heritage and that tradition. Tell me a bit about how and why you've managed that and why that was interesting to you. And Peel was, yeah, this goes back, crikey, longer than I'd like now, about 18 years. And I bought only the brand that actually stopped trading. So it was about relaunching it in its, you know, being respectful of what was gone before and then moving it forward.

3:46But doing it in an evolutionary way, always in an evolutionary way and not a revolutionary way. I think that's always been the key. And slow and steady growth. You know, we're not interested in growing at 50%, 100%. You know, we're always looking for that 10 % or 15 % growth every year. And it's sustainable and manageable, and you can enjoy the business as you go rather than pull your hair out. Well, we pull our hair out anyway, but anyway, that's modern day. And it's funny about sustainability because I think people certainly thinking about, you know, sourcing materials and global supply chains, people are talking about that when they talk about sustainability.

4:22But actually, the business has to be sustainable first. It has to be a going concern before you can worry about that. Do you get a lot of, I don't know, if you talk to partners or prospective backers, whatever it might be, are they into that narrative? You paint it in a very compelling way. But do they say, yes, yes, yes, but we actually quite like 50 % growth. Thank you very much. Well, the great thing is that because we kind of set up the business from scratch, did it with my own money. And so we've been able to grow the business organically within the confines of our own financial capabilities.

4:52So we don't have any backers. it's just myself and my wife. She doesn't give you a hard time about it. Well, a tiny bit. And very little in the way of borrowing. So it's a very nice place to be. And tell me about your, as the leader of business, as a custodian of this brand, again, I'm always interested in the degree to which entrepreneurial folk bring the summation of their lifetimes learning and all these different businesses, different sectors, to bear on what they're doing today and how much you have to be open to say, look, actually, this challenge is unprecedented for me. I kind of know the business pretty well, but tomorrow it's going to be, this is a different thing.

5:28I'm not experienced. I'm going to have to seek counsel from elsewhere and I'm going to have to come up with a new idea. What's the balance like between how much you have to be adaptable as a leader of business and refer back to your lifetime's learning across any number of experiences? I mean, drawing on new experiences is essential, but I think being, I think you'll find this of any entrepreneur, it's that sort of, it's the drive for change and constant change that just is innate across almost every touch point, whether that's product, whether that's the way you merchandise, whether that's in-store, concept, how you train people, how you communicate, what the brand looks like.

6:07And you've got to kind of bring that enthusiasm, enthusiasm for the brand, but the sort of drive for change. You know, considered change, this isn't change for change sake. But unless you're moving forwards, you're going backwards. And that's always been kind of the philosophy. and that's unfortunately that's the drive that goes with it it's also a curse of course because it reads that your brain never stops well yeah i mean are you i don't like to glib labels but you know what kind of entrepreneur are you adam are you you know sort of restless perfectionist are you a kind of frustrated artist how do you sort of categorize it a bit of both really i'm not a multiple sort of entrepreneur in terms of we've got lots of businesses i'm very focused on on and peel and i really enjoy that because in fact i don't know how people spread themselves across because i've always believed in 100 and it gets that and a bit more so um be a hundred percenter yeah 100 that's it i suppose what the creativity probably is the most rewarding part of the business okay there's the sort of i'm a gemini i've got both sides of the brain but it's a creativity and getting involved with the product and seeing it evolve and really driving that change that's really super rewarding let's talk product then do you have a favorite piece am i allowed to ask that um but give us a life story of a product well in terms of empire we've always been a cashmere specialist and very much a cashmere specialist and that's what people come to us for not necessarily an outfit but traditionally they used to come to us for a piece that went with and that was us and we still are very much a cashmere focused specialist but i guess in the last five years certainly three four years we've evolved the collection so that there is more outerwear coming in more tailored pieces linen through the summer we seem to have extraordinary warm summers these days which is not always conducive to wearing a nice cashmere sweater it's fine in those cool evenings but actually that doesn't make a business so evolving the product category but it's absolutely critical to sort of stay true to your dna and the brand and And we are about softness and comfort.

8:12And that runs through everything that we produce. Tell me, do you get to go and meet suppliers? Do you get to go and do those fun field trips where you get out and about and interrogate that? How does that work? You know, I mentioned supply chains earlier. I guess to seek value and to ensure that all your partners and everyone playing their role adheres to the values that are important to you. You do need to go and meet those people face to face and get hands on, right? Get super hands on. You know, it's your lifeblood. Your supply chain is everything. And so I do remain incredibly hands-on. And Kashmir comes, obviously we have suppliers in Europe, but Kashmir fundamentally comes from Mongolia.

8:48We get back to Mongolia, we get out there, we can go right back to the herders and go back to an area of the herders. And it's important to control quality right the way back at the start of the supply chain if you want consistency over a long period of time. And so getting on your bike, doing the hard yards, that's what it's all about. You can't get on your bike all the way to Mongolia. It just takes a long. I know it's further away. But tell me, it's funny because you mentioned climate change there in a jokey way. But not only does it drive innovation and change to the collection, it's a big challenge, isn't it?

9:20And we've spoken to other Kashmir experts, even on this program, in Mongolia, changing conditions, super, super difficult, lots of complexity. How kind of connected are you into that discourse there and longer term? Are there concerns about that, security of supply, that kind of thing? it's a big challenge i guess it's a big challenge i mean fortunately we're at a price point where we can invest in that control of the product but it is shifting and what you're seeing in the this is at a very sort of high level the whole cashmere supply is you know deteriorating if you would say it's getting coarser and that's sort of driven by various things and that's why it's absolutely essential to stay super close to the original supply chain drive your quality standards in at early stage and pay people a premium for delivering that otherwise what you start off is saying right we want 15.2 microns let's not worry about what that means but it drifts to 15.6 or 15 and you think oh well that doesn't really make too much it does because before you know it everything disappears and that's driven by commerce and climate change and yeah many things dare I ask you then about global markets tariffs all the rest of it I mean again do you end up having to be a sort of weird pseudo diplomat and politician to try and figure all these things out or actually the business is doing pretty well right you can navigate those things they're challenging but if you keep your head down and stick to your principles you can navigate them i think it's you know modern world is being about remaining nimble being flexible and being able to pivot really quickly when something happens so we distributed we've got a good size distribution in the US and that was all coming from, we distribute that from the UK and we had to very immediately change and distribute it from within the US and you flip that and you do it within the space of a couple of weeks because you know, Mr.

11:13Trump effectively had dictated so or that's the way it's driven. But I think that's modern day, it's just, things just get thrown at you and you've got to not get too phased by them and just go okay well there's a solution let's find that solution and move to it you make it sound easy i bet it's i bet it's more difficult let's talk a little bit about collaboration because you've mentioned earlier of course the sort of the bond connection over a few years which is really fun and exciting our listeners may be kind of aware of that stanley tucci how do you decide whom are these kind of ambassadors or the partnerships that you want to invest in because i guess you probably have quite a lot of people you know knocking on the door down at burlington arcade So come and have a chat.

11:52How do you, do you go with your gut? How does it work? Yeah, with your gut. I mean, Stanley's a particular one where we kind of, and the team internally, Jenny as well, we kind of went, actually, that's somebody who's really on pitch for us. He's a stylish guy. He's elegant. He's named for his good taste. He's charming. He's funny. You know, what's not to like? Let's talk to him. Let's see whether it is. Unfortunately, he was open to suggestion. And that's something that was just really interesting to get involved in design. and into that process from the start. And it's something he hadn't been involved with.

12:25And so he really enjoyed it. And it was super enjoyable working with him. So that was great. James Bond, slightly different. That was just pure fortune. That was one of the stylists walking into the Billington Arcade going, oh, I really like that blue. It's the right blue for Daniel Craig's eyes. Could we have 25? Yes, we'll make you 25. And that was the start of a relationship. And then eventually we started creating sweaters, specifically for the costume department and then we became a brand partner so that was sort of a fortunate evolution of events that must be one of those kind of pinch yourself moments when i don't know how far into the npl journey for you that would have been but was that a moment when you kind of had to sort of look around and be like yeah this is happening yeah they have that air of unreality about it yeah definitely i mean that was great i think the real air of unreality is when we got very super involved with the last film, No Time to Die, and we ended up with the Bond Summit with all the brand partners from, you know, Aston to Omega, and you're sat in a room and you're just going, and Barbara Brockley's there and the MGM guys, and you're going, what on earth is going on here?

13:31And then I had to make a presentation to them, which was even more terrifying, but fortunately it all went well, got a little round of applause and went and had a large gin. Johnny Glunt, Shaken Australia, whatever, let's leave it. tell me a bit about expansion and retail well there's a couple of things let me start with burlington arcade first of all are you all pals there it's a bit of healthy rivalry how does it work oh absolutely yeah yeah yeah i mean it's great and there's a couple of other cashmere brands in the arcade now which is that only adds to the mix we want to drive footfall into the arcade and it's chock full of jewelers so we don't need any more of it more washers but would you say if somebody said like i've got this very specific piece that i'm looking for would you say oh yes our friends down the arcade will have that for you.

14:12Is it as constructive? If they've got that, you absolutely would. That's customer service, isn't it? And if you haven't got it in somebody else's house, well, great. Yeah, I love that. It's very collegial. I'm not sure how often that's happened. I like that. No, exactly. Good brands look after people and they look after each other. What about expansion? Because you've got more stores across London, not just, of course, in the arcade. Yeah. How do you choose your sites? What's the right amount? You said earlier about doing stuff in a steady way, Keep an eye on the standards and make sure you're not kind of running before you can walk.

14:42But how do you calibrate that? What does that look like? I think it's exactly what we're saying. It's got to be proportionate to, you know, the size of the business. And so we wouldn't go off and we've got, yeah, plenty of stores in seven now in London. I can't believe we've got seven, but seven in London, two in New York, one in Munich. And so there's opportunity to grow flagship sites within Europe. Paris would be the obvious one. and there's plenty of opportunity to put additional flagship sites down in the US. We're only in New York. There's obviously LA, Chicago, Boston, Florida and Texas.

15:14And so you've got plenty to go at. And fortunately, being an owner-managed business, you can wait for the right deal and the good deals. So we're not driven by investors to always grow or produce a specific return. We can pick our deals and do what's right for the brand. I think that's really important. There's a glint in Adam's eye. So if you're a realtor in some of these markets, maybe drop a line. What would the fantasy expansion look like? If we think about international growth, even given what you've just said there, do you look at a specific market? Is it the classic thing where you go for a wander and say, actually, these are the bedfellers that we could use in whatever market it might be?

15:52I mean, that's exactly what. Last week I was in Paris and spent two days and just walked the streets. That sounds pretty terrible. But I walked the streets of Paris and you look around the different areas. is you go and look at Saint-Germain and you go up and around the Champs -Élysées and Georges Saint-Chanc and down Rue François to... Rue Bashmore, Monocles, did you stop by to see us? Absolutely, and Rue Sonneray. And you go around and you get a good feel of the streets and the footfall and the customer because you can do all the data analysis that you want, but it's sort of, in the end, there's got to be a sort of a gut decision.

16:24Well, and I guess you can do that, right? What a lovely thing that you can go with your instincts. I always ask entrepreneurs on this programme, and sometimes it's easier depending on what the product is, what happens if you're sort of walking down the street and you spot somebody strolling the other way you know they're wearing the garment they've got the scarf they've got the whatever it might be how finely tuned is your radar to do that and what happens when that happens and do you ever fall into conversation with people do you ever ask them about their experiences what's that like because i love that idea not just of the sort of snooping on the customer a little bit but that idea when you get that real feedback in the real world how does that work with mpill i mean first of all yes when you see people you know walking down the street it's always a buzz actually ah yeah that's awesome i actually rarely get into conversation i'll only actually broach the issue if i'm literally with the person and then you and then you kind of go oh that's a nice sweater and you go where do you get a pill oh yeah and then you sort of get into a chat and get that feedback it's actually easier just having that conversation with customers in store i'll go and talk to people in store it's less weird when i was asking the question i was This could make you sound like a bit of a weird stalker.

17:30Like, yes, I've noticed it. And is that the best feedback in-store, in the moment, face-to-face? Because, you know, there's always talk about distance from customers and your online feedback forums and all the rest of it. Influencers, blah, blah. It's the best thing just to chat right there. Absolutely. Yeah, face-to-face feedback is always, A, it's usually more honest and it's direct. I mean, you've always got to consider it within a wider picture because, you know, one specific opinion isn't always correct. But particularly if you get enough feedback, it's usually pretty spot on, actually. And so do you have in your mind a customer?

18:07I don't know if it's thinking about new product line, this season's colors, or whatever it might be, or do you have to actually guard against being prescriptive and having somebody in mind because customer could be anybody anywhere? Do you know what I mean? Yeah, I think as a cashmere specialist, you're selling to a you know a considerable age range where you've got the teenage daughters of and sons right the way through so but increasingly as you start to expand the product range you do actually have to have a vision of what that outfit looks like not necessarily product and the minute you start to create a look then you've got to really have a customer in mind and where they're wearing it and how they're wearing it and for what reasons they're wearing it and then that really sort of informs the whole design process you have a lot to think about there's always a lot to think adam what is next what's coming up what are you most excited about is that by market is it by product is it by collaboration what are the things that you are filling you with energy at the moment well we're still deep into we've got a second portion of the stanley tucci collection coming out in may next year which coincides with a film he's doing which is nice so that's really super exciting and we are 90 years old in the next year as well as a brand we originally started in 1936 in the billionth arcade and so we'll be having a specific celebration to mark those 90 years and so that's we haven't kind of just identified exactly what we're doing but it's going to be you know focused around an iconic product and looking you know back into the archives so that's going to be really super fun that's pretty exciting yeah 90 years and again i said about pinch yourself moments again take a step back for us 90 years i mean that's incredible heritage there's the burlington story now there's growth you know you've played a part in recalibrating expectation relaunching renewing this brand do you ever give yourself the latitude i don't know the freedom to actually take a step back and look at this and think hey i've not done too badly here or is that how complacency i think it's a it's a very rare moment and i think that's what i was alluding to earlier is that's the affliction of an entrepreneur is that the minute you've arrived you're already looking ahead and things could be better and things could be bigger and things could and so it's a rare moment you actually which is super nice when you do do it is just stop and go actually yeah well done that's amazing but then the next day let's get on again that was adam holdsworth the ceo and owner of npeel and you can find out more head on over to npeel.com

20:51You're listening to The Entrepreneurs. This month, London hosted the Grand Sumo Tournament, only the second time the event's been held outside Japan. For days, British newspapers had a field day, crammed with images of sumo wrestlers playing tourists in the capital, crossing Abbey Road, riding bikes through Regent's Park and taking the obligatory Big Ben selfie. Now, one of the sponsors of the event was Sanrio, the Japanese entertainment company behind Hello Kitty. Monocle's Laura Kramer headed to the press conference to meet Kitty-san in real life, in her hometown, in fact, as connoisseurs will be aware, and to catch up with Sanrio's president and CEO Tomokuni Tsuji about the company's retail expansion, its new character strategies and record-breaking growth.

21:39Laura began by asking Tomokuni-san why being a major sponsor for the sumo tournament is so important for Sanrio. Sanrio's aim has always been to bring smiles to as many people as possible around the world. And we think that through this combination of sport and Hello Kitty, we're going to bring smiles to a lot of people. In particular, Hello Kitty hails from London. And of course, last year, King Charles mentioned Hello Kitty, which was a huge honour for us. So we think that this combination of Japanese sumo and Hello Kitty is going to make people here in the UK smile. Under your leadership, Senrio has grown strongly, as you mentioned before.

22:15What has been the main focus to make that happen? It's not just down to me, it's down to the help that I've had from everyone around me. And we've had a number of reforms within the company, structural, organizational reforms that have helped to strengthen us. Also, in terms of our character strategy, we've started to focus more on some of our other characters, not just on Hello Kitty. we've also brought in a social media strategy and all of this has really helped to improve our branding you did mention those extra characters and i wanted to ask you about that do you think that there are some characters that you'd like to highlight more that you think could have maybe not as big of an impact as hello kitty but could have just as big of a wide global appeal well of course hello kitty is still at the heart of what we do but you're also i think going to see more and more of characters like Kuromi, My Melody, and Cinemarole.

23:05Excellent. And you mentioned also the importance of retail. You have 150 stores in Japan. You want to expand more stores. Where do you see that happening? What are the first ones you can see, and what areas are you really focusing on there? Well, the places that we're already growing our stores little by little are mainly in Asia, especially China. But in future, we'd like to branch out into North America and Europe. We also hope to create other opportunities, other touch points for our customers other than shops. Of course, shops are part of that, but we're also going to be focusing on LB, on location-based entertainment, different types of touch points for customers.

23:39And so starting with Asia, moving to North America and Europe, and also creating these real opportunities for customers to come into contact with our brand. And there's been an increase in collaborations and activations of Sanrio characters. Did you change your international marketing strategy specifically for that? As I said, a big part of it is how we make use of our other characters as well as Hello Kitty. Hello Kitty currently makes up about 35 % of our sales and we don't want that to go down as other characters get more popular but we want to get all increasing at the same time. That's the strategy is to make more use of the other characters which will hopefully give an even more boost to our business.

24:19That was Tomokuni Tsuji, the president and CEO of Sanrio in conversation with Monocle and the entrepreneur's own Laura Kramer. You can find out more about Keti-san and Sanrio by heading over to sanrio.com.

24:41And that is all for this soft to the touch edition of The Entrepreneurs. We'll be back at the same time next week. Do look out for Eureka, of course, available every Friday. The programme is produced by Laura Kramer with audio editing by David Stevens. And if you'd like to get in touch with Laura about the show, email her on lrk at monocle.com. In the meantime, follow us and catch up with past editions at monocle.com or wherever you get your audio. I'm Tom Edwards. Goodbye and thanks for listening to The Entrepreneurs.

25:18Thank you.