Enter the Weylandts Homestore in Durbanville, Cape Town, and you’ll be hard pressed to imagine it was bootstrapped. The open-plan split-level design, inviting coffee shop, large glass windows flooding the rooms with natural light and select high-end furniture and décor speak of exclusivity and style. This is precisely what founder Chris Weylandt planned when he first opened his doors in 1999.
“I wanted to create a high-end retail environment that focused on customer service and combined a retail experience with quality products, an attention to detail, and a feel for what each piece would feel like in the customer’s own environment. To do this, we needed a space that felt less like a store and more like a private, inviting and, above all, comfortable space. And we had to get it right from the moment we opened our doors.”
Having come from a furniture design and retail background, Weylandt was confident in the niche he had recognised. “The retail space was dominated by big groups with a few small, specialised operators on the outskirts,” he says.
“No one was offering a proper holistic retail experience in our market. I was convinced there was room for an easy, hassle-free destination store that provided a mix of unique product and merchandising, backed by excellent customer support.”
As a supplier to big groups in South Africa, Weylandt was increasingly frustrated by two things. First, he felt the larger groups did not have a passion for merchandising. Second, as a smaller supplier he often waited up to 60 days for payment. He wanted to find a better way to operate within the retail furniture space, and he wanted to realise the dream of a concept store that was just starting to take shape in his mind.
“At this point I was working with my father and my brother. Based in Windhoek in Namibia, my dad had started a retail furniture store in 1964. I grew up loving fine furniture imported from Europe and discussing business around the breakfast, lunch and dinner table. It was in our blood,” says Weylandt.
“I left Namibia for Cape Town to study and become a chartered accountant, but after my degree I soon returned home and joined the business, where I would spend the next few years implementing new systems and processes, visiting Europe to develop our product lines and even opening a small manufacturing plant, where we produced our own line for some of the larger retailers in South Africa.”
It was after relocating to South Africa that the idea of opening his own retail line really began to take shape though.
Step by step
What sets Weylandt apart from many entrepreneurs who have not managed to successfully realise their dreams is patience and planning. “I had absolute confidence in the concept, but I also knew that if I wanted to launch a brand in that space, I needed to get it right. There would be no second chances – which meant I needed to have all my ducks in a row.”
Having a plan is one thing, financing it is quite another. While his father’s business continued to do well, Weylandt used his time while still in partnership with his family to save his profit share, do his homework and refine his business model.
He needed start-up capital, he needed to have sourced the right products and secured exclusive partnerships with Indonesian and European manufacturers, and he needed to completely understand his consumers. It took him over three years before he was ready to break ground with his new project.
“This was my project. My father and brother remained in Namibia, although the manufacturing plant we had set up would service the new Weylandts Homestores as well.”
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Making the money work
The Weylandts concept was based on a destination store, which meant it wasn’t at a mall. There were no parking hassles and it was simple to reach and enter. Weylandt would own the property outright as well, instead of renting.
He already had the furniture sourced, and an architect on board who understood what he was looking for: Beautiful natural lighting, a coffee shop and crèche so that customers could enjoy a few hours at the store and get a feel for the Weylandts brand and style of living. Each room needed to be different and inviting, showcasing not only products, but an overall ambiance.
The vision was in place. It was finance that was the hurdle. “As a start-up, I struggled to secure finance,” Weylandt says. “Ultimately, I managed to secure a bank loan on the property, but the building needed to be bootstrapped.”
With some savings in place, he got to work. “First impressions are vital. It was more important for me to open the way I wanted the store to look than to take short cuts. If this meant taking longer so that I could afford the project, so be it. I was earning a salary and profit share. It was only time I was losing — and the investment was more than worth it.”
Weylandts made a profit from the minute the doors opened. “I had invested a lot of time and energy sourcing the right products, and this paid off. 80% of our product line was imported and 20% manufactured ourselves, but in both cases we were offering unique products that were nevertheless fashionable. When your offering cannot be found elsewhere, you are able to charge more for it. Combine this with a destination-store experience, a desire to be linked to our brand, and strong customer service and support, and we were able to ask premium prices. These profits went straight back into the business, and slowly my vision was realised.”
For the first five years, every cent earned was ploughed back into the business. “The fact that retail is a cash business helped – we weren’t waiting for clients to pay us, so we could immediately reinvest the cash.”
Once Weylandt had a track record (and as a CA, this was a well documented track record), it was much easier to secure additional funding from banks to open new destination stores, although he has continued to rely on his own positive cash flow to support most of the business’s growth organically.
“Remember that banks are conservative. They focus on collateral and assets. The trick to remember though is that even once you have those things, they will also want to see a track record. This includes demonstrating real discipline when it comes to cash flow, margins, logistics, operations and budgetary controls. Start your business on the right foot and it will continue that way. Our focus on running a tight ship is what has really allowed us to grow, not bank finance. We are always in control of the business. We have grown organically, we haven’t over-extended, and we’ve made sure we were ready for each new step.”
Today Weylandts is made up of seven local stores, two stores in Namibia, and a store in Melbourne, Australia set to open in October 2013. And 2013 will see the inclusion of a turnkey interior design offering to the Weylandts brand as well. “We have a unique range, we’re able to manufacture custom furniture, and our expertise lies in creating beautiful spaces. This offering is a natural progression of the brand as the business continues to grow.”
Unless you are running an e-commerce store (and even then), your employees form the backbone of your business. They are the first and last impressions left on your customers, and they can quite literally make or break your business.
For Weylandt, finding the right employees was one of the biggest challenges he faced while growing the business.
“You can have the most amazing products and the best location, but without the right people it means nothing,” he warns. “We learnt this the hard (and expensive) way, particularly when we began opening stores across the country.”
Weylandt’s advice? Budget for the right people. Often, this will mean higher salaries and bigger incentives. But when budgets are kept, cash flow is positive, the business is lean and efficient, and customer service levels are maintained, the end result is better margins and returning customers.
Player: Chris Weylandt
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