Jan 272012
 

In these bleak and pessimistic economic times, it’s always heartening to hear of a thriving business looking to expand. All the better when its success is built on an alternative business model which genuinely appreciates its staff, rewards and motivates them appropriately,and involves them at the core of decision-making. Surely this can’t work in the cut-throat commercial world? Jeremy Miles, MD of the Edinburgh Bicycle Co-operative has proved it can. David Innes cruised alongside him in high gear (definitely NO Lycra though) to ask him how it works.

Expanding? In the current economic climate? 

What looks like a sudden announcement of expansion is really a plan we have been quietly executing for just over ten years. For 25 years we only operated in Edinburgh where we built up a £3m store. We decided to expand in 2001 and acquired Cycling World in Aberdeen’s George Street.

By 2011, turnover increased to £12m, with stores operating in Newcastle, Leeds, Manchester and Sheffield. We were developing our online presence at the same time. Our aim was to double in size in each of the two five-year periods – every self-respecting socialist-minded business has to have a five-year plan!  These are among the most challenging times traders have ever faced. Our business is no different. Customer spending on discretionary items is down, on bicycles as much as sofas and flat screen TVs. We’re seeing growth, but its hard work to keep that going, although it’s very positive in current conditions.

Our optimism and our ambitions are based of a number of factors. Cycling is enjoying a very positive momentum at present with concerns over health, transport costs, congestion and the environment all helping the industry to grow. We also feel that our co-operative structure presents an alternative to discerning customers who want to spend with a company with real values as well as a genuine focus on high levels of service delivered by owners of the business.

  we work within our general vision of doubling turnover every five years.

Look how the Co-op has positioned itself against the corporate strength of the major supermarkets. The Co-op has heavily engaged with its local communities to help fund projects. It projects an image of being off the beaten track in terms of their offer.

Since we face similar challenges as our competitors become more organised and supported financially by private equity, we must also target a particular market where the growth in cycling is focused – in family leisure cycling and commuting.

Our previous expansion plans were about big stores in big cities with the right demographic spread; a fairly rigid plan which worked well for us in good times. The bike market is changing, however, with the development of some huge internet players in Wiggle and Chain Reaction Cycles. Significant retail chains like Evans and Cyclesurgery are expanding rapidly and bicycle retail is very different from even five years ago. We’re also seeing more established brands such as Specialized and Giant opening branded stores, whilst the government-driven Cycle to Work initiative has also helped change the landscape.

Expansion opportunities are broader and more flexible as the customer base widens. Business-to-business relationships develop through government-funded initiatives and the internet offers new ways to market and support the bricks and mortar business. We look to capitalise on these opportunities when they emerge. We don’t have plans for x stores in y years, but we work within our general vision of doubling turnover every five years.

This co-operative structure – how does that work?

Within the spectrum of employee-owned businesses we are a traditional workers’ co-operative, so as hardline as it gets!

We have around 180 employees, full-time and part-time, of whom 135 are co-operative members. Members are invited to join after 12 months service by purchasing a single £2.75 business share. Around 75% of our workforce are owners of the business.

Having secured membership, they’re entitled to receive a share of profits, free shares awarded annually, a single vote on issues put to the membership and the opportunity to be elected to the Board. They have access to communication mechanisms allowing information to move freely from top to bottom and vice versa, ensuring that opinions and ideas are fully utilised. It’s an open and consultative approach to management and operations.

Aside from the ownership model, our business structure is fairly traditional with a board of directors, including an executive management team where I am MD, a group of elected employee directors to represent the membership, and an external non-executive director to provide guidance and expertise. I manage the staff in a conventional manner via Divisional and Department Managers.

This obviously works – tell me why

We’ve always been structured this way. We started out in 1977; seven hippies fixing bikes in a small repair centre in Edinburgh. Two of these hippies are still with us today!

The central philosophy was always to have an alternative view of how a business was structured, but I don’t suppose your readership is all that interested in very deep philosophical musings about the prevailing mood of the 1970s and detailed Marxist rhetoric!

We are very much a business which values its people. We see them as the key asset of the business, so it makes sense that they control the business.

We spend 10% of our targeted profit every year on supporting grass-roots cycling projects

A prime retail challenge is delivering an all-round quality customer experience. To be effective at this, you must ensure that customer-facing staff are heavily engaged with your business. Many retailers struggle, paying minimum wage rates and providing a fairly uninteresting working environment.  They turn staff over very regularly.

As a co-operative, we put owners in front of customers in most instances. This makes it much more likely that customers are speaking to someone with a deeply-vested interest in making sure the experience is positive. The fact they are almost always very passionate about the product they are selling helps too!

We see ourselves as much more than just a shop selling bikes and bits. We’re all about added value and the wider customer experience. Promoting cycling as a leisure activity and a genuine alternative mode of transport is at the heart of our vision and mission. We spend 10% of our targeted profit every year on supporting grass-roots cycling projects, from school fairs to individual charity rides through Vietnam. We support key charity-focused cycling events which also promote cycling, for example the Edinburgh to St Andrews Ride and the Great North Ride in Newcastle.

We don’t just write a cheque. We’re hands-on involved, with starting line presence, repair services en route, food stops, and finish line presentation. We’ve run a range of hugely-successful maintenance and training skills classes for customers for years, and have a real commitment to providing repairs services to a high level. Our workshops are prominent in our stores rather than tucked away in a back room.

We see our engagement with customers as a vital part of the character of our business and put huge effort into getting feedback from them. Customers contribute to the content of our catalogues with family photos, and will soon be helping with blogs and social media content.

We have a very loyal base who are genuinely interested in our values and want to be part of our success as a genuine community co-operative.

Sep 012011
 

A year and a half ago, Steve Bothwell wrote to express some, shall we say, ‘reservations’ about ACSEF’s master plan and where Aberdeen is heading.  It looks as if he had a point or two. 

February 25, 2010 – ACSEF’s plan belies anything that can be comprehended as ‘essential to the future of Aberdeen and the North East of Scotland’. As Jonathon Meades put it, ‘Aberdeen is good at being bad’ – Polite prose indeed.

The former glory of George St, with high quality retail and high quality architecture/replaced with the now John Lewis building (formerly the Co-Op) – St Nicholas Centre and The Bon Accord Centre, whilst severing the bloodline to the rest of George St, which resembles a down market version of the down-trodden Argyle St in Glasgow.

The old Co-op Building in Loch St/Gallowgate, which with little imagination could have been a gem of high quality boutique-scale retail, instead of Architecturally impotent office/residential blocks.  St Nicholas house dwarfs Provost Skene’s house, one of the oldest and most architecturally significant buildings in the area.

Union Terrace Gardens is not to blame

The Trinity Centre/Trinity Hall, which subsequently moved to an equally, but on a smaller scale, architectural abortion.

The Old Market building (Market Street and the Green) replaced with the New Market building, sporadically raising pointing questions from the public (locals and visitors alike).  Amadeus nightclub on the beach front which offers nothing but bemused and disturbed confusion.

And last but not least, Union Square, which is a glorified retail park with parking. This Architectural abomination will need replaced sooner than we think.

Union Street comes up in conversation with great frequency. For the past 30 years planning and control has become so lax that we are adorned with gratingly luminous patchwork of irregular symmetry. Absentee landlords are never held to task, nor are the lease holders.

Union Terrace Gardens is not to blame.

Most City Councils have made errors, and some cities have corrected them. 

Aberdeen City Council still strive forth to allow the most banal picture painting of a living hell, by destroying everything in its path.
Either they are missing the clues which sit firmly on their own created door step or are suffering a serious bout of doldrumitis. The Civic Square planning and design details do not excite but only represent the pointlessness of it.

The City Council, along with ACSEF and Central Government wholeheartedly supported the Peacock scheme, providing local planning guidance was adhered to. This was to make it blend into the historic park. Peacock’s did that.

We now have a scheme, which in its vagueness, is impossible to get to grips with. From that I mean, it is quite obvious that this charade is nothing to do with enhancing our city for future energy companies to get comfy with, because as we know, energy companies care about nothing but energy riches and not about Urban realm Strategies, and especially about retail connectivity.

ACSEF’s approach to retail connectivity is fed through a brainwashing exercise in which the retail ‘Pillars’ unease at motions of failure result in the bandwagon bursting at the seams with the ‘I’m on board brigade’ ensuring their retail offerings, bland as they be, will not suffer the ever-changing movement or trends of public spending.

Union Terrace Gardens is not to blame.

It is poignant that public money has been frittered away on asking Joe Blogs about ‘an idea’, an idea which still reveals no real detail of the final outcome, whereas Peacocks had it sorted and without the need for car parking. Their enhancing project upset no one, and has not created the furore that the Civic square has.

Union Terrace Gardens are not frequented often. Perhaps the reason for that is, the general public are more interested in other things. Society has gone through radical changes and people have become armchair deficits. They rage vengeance on slopes and stairs, grass and beauty, nature and health.

Union Terrace Gardens is not to blame.

However, Courtesy of Grampian Police, the facts are this: – There is negligible crime in Union Terrace Gardens. The Freedom of Information Act has provided much-needed defence, where Union Terrace Gardens is the safest area in the City Centre.

It’s plain to see that ACSEF have not used Europe as an example of quality city centres but used America and Australia as examples. America and Australia are fairly recent countries but wholeheartedly celebrate their Green Spaces.

Aberdeen City Council’s budget is tight and perhaps tight-lipped. And the Scottish Government should be representing Scotland and its history, which it’s not.

Union Terrace Gardens is not to blame.

Nov 052010
 

By Alex Mitchell.

There is widespread concern about the dingy and run-down state of Aberdeen’s principal thoroughfare of Union Street which runs all the way from Holburn Junction to the Castlegate and the town end of King Street. This is manifest in the number of empty shops and in the distinctly low-rent character of many of such shops as there are.

It seems the more odd that this situation has developed during some thirty years of oil-boom prosperity, low unemployment and substantially-increased population.

If one thinks back to the Union Street of the nineteen fifties and sixties, the following comes to mind: Union Street was jam-packed with shoppers along its entire length every Saturday, as was also St Nicholas Street/George Street. People dressed up to go ‘doon the toon’, and you met everyone you knew in Union Street. In that sense, Aberdeen really was a village. The open-air markets in the Green and Castlegate were very much going concerns. Buses went all the way from Hazlehead to the Sea Beach and back again, via Queen’s Cross, Union Street and the Castlegate, which served as the city’s main bus interchange, where you nipped off one bus and on to another.

As a result, far more people had reason to go to the Castlegate than nowadays. Union Street and St Nicholas Street/George Street were full of interesting, up-market shops: grocer Andrew Collie & Co. Ltd. at the corner of Union Street and Bon Accord Street; Watt & Grant’s department store; McMillan’s toy shop, under the Trinity Hall; Woolworth’s, backing on to the Green; Falconer’s, Isaac Benzie’s, the Equitable, the handsome and elegant old Northern Co-op building in Loch Street; the Rubber Shop.

So what happened? Much of the population moved out of down-town tenements and into the new housing estates and suburban residential developments, ever-further from the city centre. Car ownership became the norm, and car-borne customers prefer shops they can park next to. Supermarkets became superstores and greatly extended their range of merchandise, destroying one specialist retailer after another. Butchers, bakers, fishmongers, hardware and electrical stores, shoe-shops and, most recently, pharmacists, bookshops and record shops have all been subsumed into superstores.

The obvious way for the city-centre to fight back was to build down-town malls like the St Nicholas and Bon Accord shopping centres

Superstores and their car-parks require huge expanses of land and prefer edge-of-town locations where large sites are available and cheap and accessible for both customers and delivery lorries. DIY sheds like B&Q, furniture and carpet stores and ‘big box’ retailers like Curry’s similarly prefer edge-of-town retail parks.

Edge-of-town retail complexes, such as that at Garthdee, may be banal, unhistorical and characterless, but they are also convenient as to access, offer easy and free parking, and are generally clean, safe and relatively easy to secure against break-ins and vandalism. The obvious way for the city-centre to fight back was to build down-town malls like the St Nicholas and Bon Accord shopping centres. These offer the kind of accommodation retailers want, and are relatively secure overnight, but they may tend to abstract business and custom from the High Street. The case is unproven. Without the down-town malls, the major retailers might have moved out of the city centre altogether.   Or they might not.

If, however, the supply of retail premises outruns the demand, it follows that the less attractive premises and locations will become hard-to-let, the rent obtainable falls, lower-status tenants have to be accepted; ultimately, premises may become unlettable on any terms. This is what seems to have happened in the west end of Union Street, and not only there.

We are assured that Aberdeen is not oversupplied with shops, but there have been significant increases in the down-town stock of retail premises in recent years, e.g., the Academy in Belmont Street and the Galleria in Bon Accord Street, neither of which were quick to fill up with tenants. The proposed Bon Accord Quarter will substantially increase the capacity of the present St Nicholas and Bon Accord malls and the Union Square development at Guild Street comprises some sixty new retail premises.

What else happened? Down-town, the general decline in church attendance after the First World War, combined with the exodus of population from the city centre, rendered many churches redundant. Similarly, whatever else we may say about the banks, they did put up some very handsome and impressive buildings. But, by the 1990s, the Bank of Scotland had abandoned its splendid and purpose-built 1801 premises at the corner of Castle Street and Marischal Street, as did the Clydesdale Bank its 1842 Archibald Simpson premises at the corner of Castle Street and King Street.

What was once the centre of business activity in Aberdeen was so no longer.   Aberdeen Journals moved from Broad Street out to Lang Stracht. Aberdeen University withdrew from Marischal College and the Student Union (and Bisset’s Academic Bookshop) closed down. The Robert Gordon University moved out to Garthdee.

There never was a time when things stood still. Old trades and occupations become obsolete, redundant or move elsewhere, often when displaced by newer, more profitable activities in the Darwinian contest for the use of economic resources, land, labour, capital etc. There are no fishing boats in Aberdeen harbour now because they have been replaced by oil-industry vessels. Planning applications for change-of-use are the normal and desirable state of affairs. But neighbourhoods and communities go into a decline when long-established firms and industries fade out and fail to be replaced by new enterprises and activities, or are replaced by activities which are in some way damaging or undesirable.

bars, nightclubs, etc., are a youth-orientated business, and the relevant age-group is shrinking as families move out of the city

The increased number of vacant retail premises in Union Street results from the fact that fewer tenants are moving in than are moving out; there is a net exodus of retailers.   The sad truth is that Union Street is not nowadays that good an environment in which to try to run a shop.

Old buildings and ground-floor premises are difficult to make secure against break-ins and vandalism. Delivery access for lorries is difficult. Shop staff and customers are harassed by drunks, beggars and drug abusers. Shop doorways, windows and their surroundings are often in a filthy state at the start of each day’s business. It is difficult to find and retain staff who will put up with this. It is not surprising if retailers follow their customers and withdraw to the relatively clean, safe and secure environment of the down-town malls and edge-of-town retail parks.

Aberdeen has generally been a better-run city than most. But the situation described arises from the non-delivery, or inadequate performance, of very specific council and governmental responsibilities, e.g., to maintain law and order, to enforce the law, e.g., against drinking in public places, to deal with anti-social and criminal behaviour, to collect the rubbish and clean the streets and pavements. Putting down the odd tub of begonias is not enough.

As banks, churches and big stores have withdrawn from Union St, so mega-pubs and bars, nightclubs and fast-food providers have moved in. To an extent, the new arrivals have been welcome, occupying old buildings which would otherwise have remained empty and neglected. In addition, some of this may be regarded as legitimate change-of-use, in response to changing tastes and lifestyles.

Similarly, there is a place for pubs, bars and nightclubs; but perhaps for fewer of them, and of a different character. The bars, nightclubs, etc., are a youth-orientated business, and the relevant age-group is shrinking as families move out of the city in search of better-value housing and more stable and higher-achieving schools.

In the meantime, the issue is one of whether the alcohol industry can peacefully co-exist with other economic sectors, retailers etc., and with the resident population of the city centre. All the evidence is that a neighbourhood which loses its settled, long-term resident population is doomed, finished, over. So if the interests of the local resident population and the alcohol industry are in conflict, then the former must take precedence.   It may be that the drugs, alcohol, gambling, etc. sectors will be cut down to size only as and when people get bored with and/or turn against this kind of activity, much as they mostly have in relation to tobacco.

Similarly, a locality and micro-economy which has long been in decline, such as the Castlegate, can be revived only by rebuilding its resident population and base of custom and trade from the ground up. The buildings at the west end of Union Street (originally Union Place), used to be private houses; people did their shopping in the street markets or in Archibald Simpson’s New Market of 1842, Aberdeen’s first enclosed shopping mall.

One of the more positive developments in recent years is the conversion of the upper floors of these old buildings, often long out-of-use, into modern residential accommodation.

It is a pity that the long-proposed Bon Accord Quarter was put on hold, possibly whilst the proprietors of the two down-town malls assessed the impact of the Union Square development, south of Guild Street.

This writer was broadly in support of the outline scheme for the Bon-Accord Quarter, because it would have secured the desirable objectives of removing St Nicholas House and bringing Marischal College back into an appropriate usage; also because it confirmed and consolidated the traditional retail heart of Aberdeen as the premier shopping destination in the North-East, the natural and obvious location for up-market and quality retailers like Marks & Spencer, John Lewis, Debenham’s, Next etc., which serve to pull shoppers and visitors into the city centre to the benefit of all the other retailers and service-providers.

Contributed by Alex Mitchell.