HubStyle gets real

Michał Brzemiński, sales director, HubStyle: Our company already has some experience with brick-and-mortar retail – we are present in some multi-brand stores and also have three sales outlets: two under our own brand in Warsaw and Poznań and a franchise test store in the Ovo centre in Wrocław. However, until recently the company’s focus had mainly been on building its online business. Last year, a decision was made to embark on a much wider opening up to the market, to bring in investment partners and also to work more closely with companies that sell our brands. We want to do business across many different channels. And one of these is to work with franchisees on the development of a chain of brick-and-mortar boutiques.

So apart from working with these franchisees, HubStyle also supplies goods to multi-brand stores. What exactly do such business relations involve?

Yes, we are also expanding the range of our activities through building our presence in multi-brand stores. Our new team’s task is to acquire new distributors for multi-brand sales – mainly in smaller towns and cities. Our Cardio Bunny brand has so far appeared in 4 Faces stores, a chain owned by OTCF. We hope that we will be able to significantly increase the scale of such partnerships soon.

Do you regard this as complementary to your current online sales model?

Our e-commerce business is still doing very well. We cater to the tastes of a great number of women. We have recognisable brands, loyal customers who value our clothes for their quality and price. However, when I joined the HubStyle team last year, I was wondering how much of the market we were losing through having just the one sales channel. Many women will not order clothes over the internet for various reasons. Therefore, switching to the development of a brick-and-mortar chain is aimed at extending our reach and acquiring new customers who prefer traditional shopping. We are popular and well-known in the largest cities, but we want to give our customers the opportunity to see and try on our goods in traditional stores across Poland. Right now, e-commerce is an important business model for many companies. It gives us a strong basis to build on, but we know that shopping is all about emotion, which is why we want to have a traditional distribution channel. Thus traditional stores are a must for us. This is how a strong chain is built and customers are won.

What are your immediate plans?

We want to open 50 franchise stores over the next three years in cities with populations of over 150,000 residents. We are mainly interested in shopping centre openings. Negotiations over new Sugarfree and Cardio Bunny outlets are already underway. At the same time, we are entering into partnerships with multi-brand boutiques and sports stores in smaller towns. The franchise boutiques we are going to open will operate as premium stores – in terms of the quality of the products and the service. We also place a lot of importance on the standard of the stores we will be working with.

Where and when will you be opening the first few outlets?

We are currently finalising contracts with franchisees in Katowice and Bydgoszcz and expect stores in these cities to open at the end of May or early June. Furthermore, we are in negotiations with potential business partners and we are also receiving a lot of inquiries from people interested in working with us. Our requirements for franchisees are very concrete – we carefully screen each candidate to see whether they meet certain criteria.

What format will the stores have?

The average area of our stores, which have been designed by R&D Studio, will be 110–150 sqm. They will be divided into two zones: Sugarfree and Cardio Bunny. Relaxation zones will also be created in the stores for our customers. As for the Sugarfree brand, this will be divided into several lines: business, occasional and casual. The stores will operate in a multi-channel format – forming a network – and will offer a click & collect service. Our distribution logistics is so efficient that it can support both e-commerce and traditional channels. We are also thinking about installing interactive mirrors and despatching the product directly from the store to your home.

What form will the cooperation with franchisees take?

I treat working with franchisees as a personal responsibility. I often drive to certain stores myself, to check, analyse and consider various options because I want our business model and our franchise partner to suit one another to the benefit of all parties. We choose our locations carefully and collectively. Then HubStyle supports the franchisee throughout the entire lead-up to the opening. We create our stores using a design & build approach, we stock it up and provide the IT system as well as customer service and product training. At the same time, since we respect our customers we only work with people who care about the business, who are committed to and believe in our products and understand them. Our franchise partners should see a return on their investment after about two years of their stores’ operations. The investment required to open one of our outlets comes to around PLN 300,000–350,000.