Almost two years after adding the Nicolas stores in London to the Spirited Wines chain he set up in 2010, Benoit Thouvenin has a leaner estate but confidence in the future. He says business is much better than it was 18 months ago – but that has come at a cost. Rising rents and challenging trading have forced him to close 14 stores, leaving him with just five of the shops outside London that he began trading with.
The rest of the 39-strong estate is inside the M25, the shops bought from his then employer Castel, the French owner of Nicolas, in February 2012. Most have been converted to the Spirited format, with 10 still operating as franchises under the Nicolas fascia.
Spirited faces a unique palette of challenges for a specialist wine chain of its size. It has the operational and cost issues of a big estate, but arguably without the buying power or established high street brand name of rivals Oddbins and Wine Rack, both resurgent under new owners.
There’s also a dynamic new wave of independents on the scene, some of them trying to outdo Spirited in neighbouring locations.
And then there are the supermarkets with their convenience formats and aggressive prices.
“Our biggest challenge is to ensure customers understand that the prices we charge and the fact that we are more expensive than supermarkets are to ensure we stay on the high street,” he says.
“We don’t price our wines for the sake of being expensive or to get rich – we do it to cover rising rents and the costs the City imposes.”
With new ventures including cheese concessions, a customer loyalty card and a growing e-commerce site, Thouvenin is determined to keep Spirited on the high street – in spite of the challenges that entails.
He has been encouraged by recent media coverage of supermarket wine discounts.
“It is a good thing that the press is starting to talk about the fake prices in supermarkets,” he says. “I found it very encouraging that there has been an acknowledgement of the fact that people think they are getting 50% off, but if you look at the same wine a year ago sometimes it was cheaper than it is on discount now.”
He himself has steered away from promotions and discounts, having seen the impact they had on other high street retailers such as First Quench, where a long-term three-for-two offer contributed to the chain’s decline and ultimate collapse.
“Whatever discount you see in our stores, it is purely and solely from the suppliers who want to make a gesture – if a supplier wants to push a product because it is Christmas or something, they will fund a discount for us,” he says.
Thouvenin’s philosophy is all about fitting in rather than competing.
He has launched a fine cheese concession in 13 shops in conjunction with Paris-based Beillevaire, but says he would never do it in a location where
there was already a strong, established cheese shop.
“We don’t want to compete, we want to meld with the shops around us. If there is already someone doing a great job we won’t do it,” he says.
Another new venture is a customer reward card, which launched in July to give Spirited more information about its customer base. So far 1,000 customers have signed up.
Cardholders collect 1p for each pound spent, and are offered incentives and sent emails about range changes and other deals. “It is really just the start now, but we are working actively on this concept. Customers, staff and stores are the most important things for me,” says Thouvenin.
While the 10 remaining Nicolas stores are sticking to their French focus, the rest of the Spirited estate now carries a range that spans the world, and is kept fresh with around 7% of the portfolio updated each quarter in line with drinking trends.
The retailer’s e-commerce site has been running for 13 months and has now established itself and started making progress.
Thouvenin says the site is a complement to the bricks-and-mortar estate with the aim of offering an extra service to customers, although he would like to see it making more money. A click-and- collect service is about to be launched.
“There is a momentum of growth that we are very happy with. It has to be there for people who like the products and the concept but don’t want to go to a store,” he says. “For me it is another store – even if it only makes up 1% of the business it doesn’t matter. It is there as an extra service.”
Looking to the future, Thouvenin is excited about Christmas and is targeting gift shoppers. “We can provide the perfect case for Christmas or New Year’s Eve.”
Before that Spirited will be hosting its annual wine fair at London’s Northumberland House on November 29 and 30.
Customers will have the chance to meet 35 of the chain’s wine and spirits suppliers at the event, which costs £15 for a ticket that includes a £15 gift voucher. Last year’s event drew 500 visitors.
Thouvenin says: “It is an occasion for our customers and staff to meet the people behind the products – to meet the passion.
“It will really show what we are about and that we are pushing our products because we believe they are fantastic.”
Further down the line, plans are in the pipeline to open a Spirited wine bar. When he worked for Nicolas, Thouvenin set up and ran the chain’s successful Canary Wharf wine bar, which also makes off-sales, and he hopes to recreate that outside London.
In terms of the retail chain, he says: “We are looking for other shop locations, but it is not our priority today. Today we are trying to keep improving the estate we already have, and I would rather try a wine bar than a wine shop.
“But you never know – if there is a great location it would be silly for us to say no.”