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Psyched up and soaring

Friday 16 November 2012 6:00

Neither family nor bank manager could stifle Steve Cochrane’s ambition to put an industrial borough on the world’s fashion map, as Brian Nicholls reports.

His is a fashion head not for turning. His parents tried to talk him out of selling style for a living. Engineering was the family thing.

“You know nothing about business. We’ve never been in business. Why would you want to be in business?” Steve Cochrane mimics in authoritarian tone.

“Even when I worked on the rigs and went to see my bank manager he said to me: ‘Instead of opening this shop you plan why don’t you buy yourself a nice car?’ So this is my bank manager, my mother and my father. The more they tried to talk me out of it the more determined I became to try to get into fashion,” Steve says.

He worked on the rigs six months – enough to raise start-up capital. Today even mates from his oil days shopping in his store wonder at the size that Steve’s business, Psyche, has now reached.

“I think they can’t believe it because it started as a tiny boutique little bigger than six telephone boxes. No-one expected it to reach this level. Not even me.”

Psyche today fills an imposing building whose style and elegance belittle neighbouring takeaways, cafes and tiddler businesses on Linthorpe Road, central Middlesbrough.

The red brick, marble and chrome landmark with rooftop flags proudly a-flutter, signal 30 years of Steve’s insistence on becoming a retailer of designer clothes, culminating in Psyche now among one of Vogue magazine’s 100 Best British Shops.

“You can’t get better than Vogue, it’s the ultimate accolade. I’m over the moon. To be ahead of Selfridges Birmingham and Harvey Nichols Leeds is a big deal,” he says delightedly.

“Leeds is brilliant for clothing – about four times the offer in Newcastle. And Harvey Nichols Leeds is our main rival."

Equally pleasing is the fact that Psyche is now also 50% bigger than Harvey Nichols Leeds. It’s all a fitting follow-on to coming second to harrods as best department store in the UK – in the drapers’ Awards last November.

Steve agrees that Middlesbrough is no Paris or Milan for fashion yet, albeit Psyche dresses men, women and children with equal panache, and claims one of the largest shoe and bag displays outside London.

“National Press tends to put Middlesbrough down. So its image isn’t great,” Steve admits.

“But you know, people have always been very fashion conscious around here. They tend to party and go out a lot, not just here but throughout the North East. The more they go out, the more clothes they wear, and we can sell more adventurous things. I’ve got mates all over the country in this kind of business, and I sell more adventurous products than they can.

“If you live in London and wear a suit all day you tend to dress down or dress casual when you go out. But a lot of people work in industry here. They don’t necessarily dress up for work so they make an effort when they go out.”

A sequel, he agrees, to when our forbears wore Sunday best to chapel. “We’ve noticed a massive upsurge in tailoring,” he adds.

“dressing smartly is very much on trend. We’re selling loads and loads of tailored separates like a sports jacket to wear with chinos and things.”

As what goes around also comes around, he’s selling loads of cravats and colourful top-pocket squares. The burning question at this point, though, is why, when many large retail stores elsewhere are closing, Psyche - ensconced in what was once Upton’s department store - is heading to 25% growth this year, perhaps a £1m jump to £5m in turnover?

First, dr Steve Cochrane (to give him his academic recognition), doesn’t regard Psyche as a department store.

“It’s the size and scale of a department store – but we keep a boutique passion for independence, giving the benefits of both,” he points out. So it’s more a colony of boutiques distinctively branded or, like a Middle East soukh, a venue where the sum of the parts is greater than the whole. There’s more to it than that, though.

“In recession many managements batten down hatches, slash costs, advertising and inventory carried, as well as the number of brands and labels....stop taking chances with fashion and new products....cut staffing levels till customer service suffers. They even cut back on maintenance.

“We’ve done the opposite. We’ve refurbished entirely, taken on staff and more stock than ever, and have exciting new brands, as well as upping our marketing spend and taking on a Pr company. high risk strategy,” he admits, smiling.

But profit growth is rising even faster than turnover growth in percentage. Sales last year were up 20% with average spend around £160 a visit. So far this year he has put £240,000 into interior transformations. No wonder his honorary doctorate from Teesside University was given for business administration – the shopfit work has been mainly paid for by suppliers.

“Because we’re continuing to increase our stock levels and most other people are cutting back, the suppliers want to do windows with us, co-marketing and adverts, and are giving gifts with purchase. They’re giving staff products to wear. That’s put us in a fortunate position compared with many others in the UK. It’s a case of building relationships with your suppliers then levering as much as possible. They want to sell more product, we want to buy more. It’s win, win when they work closely with us.”

A change of bank has been helpful, as Steve explains: “With the new Santander payment scheme we pay suppliers quickly and that’s supported by the bank. In moving banks we’ve taken on new financing to do all we’re doing. The bank pays the suppliers within 48 hours. We pay the bank back after 90 days. The bank takes a small charge. We get trade discounts. We get additional benefits. It’s the other way round from factoring, a new product in the UK market.”

Then there’s the website relaunched last year. That brought a 148% jump in its revenues for the year, with 20% of all online purchases going abroad to as far as Australia and russia.

He has customers in the USA and Japan, and attention now is on Middle East customers, both Arab and expat. Steve says: “A friend in dubai has a clothes shop but knows nothing about internet retailing. We’ve been doing it for years. he wants to set up a subsidiary of Psyche’s website in Dubai.

“It’s expensive having to build a completely new website with Arabic and dirhams on. They’ve Arabic speakers there, obviously, because you don’t want to put Arabic on a website then find customers asking you lots of questions in Arabic you can’t answer. We’re working out how to do this cost effectively. That’ll launch early next year.”

Steve thinks more about the internet and a new warehouse to feed online demand than about any new shop opening. Stores must link internet business to their bricks and mortars business very closely to survive, in his view. The other vital ingredient, one he feels many stores lack, is enthusiasm.

“We’re trying to make Psyche retail theatre - exciting, dramatic, changing all the time so it’s stimulating and gets the shopper’s heart racing. Come back here in four weeks’ time and you’ll see the place changed again. “I’m totally passionate about what I do,” he declares.

“I get dead excited coming to work in the morning. Alex (his partner) has to force me to go home of a night. There’s always something to do. I love change. I’m a bit hyper. Always full of energy, passion and enthusiasm. My staff are enthusiastic and passionate too.”

A bedside pad takes his slumber-time jottings, and his Filofax – “my little black book” – is his daytime companion carrying myriad notes and ideas. he carries a Blackberry too.

“I’m still ‘80s man in that sense, I’m afraid – a bit analog, a bit digital. I’m always drawing things. That display should look like that or we need this product in black as well as red. That kind of thing...”

Enthusiasm is the essential he’ll look for when adding to his 64 staff. “We can train people in fashion, product knowledge and all a job entails. But you can’t train someone to be smiley, jolly and friendly. They are or they aren’t. I once employed people who were very fashionable and knew a lot about clothes. I ended up with a shopful of prima donnas more concerned about their appearance than about looking after customers.”