Shebang booms with new energy

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After a roller-coaster ride, Shebang’s growth has soared 139 per cent in three years. Boss Iain Humphrey tells Paul Withers the story behind the journey to seventh ranking in the Tech Track 100

There is an unquestionable air of excitement from the staff inside the walls of Daventry-based Shebang.

As well as securing several lucrative deals, including those with Samsung, Asda, Costco and Viking Direct, the company was in September ranked seventh in the Tech Track 100, having achieved 136.58 per cent growth between 2006 and 2009, with sales topping £60 million. A figure it expects to repeat.

So it’s understandable group managing director Iain Humphrey is in a buoyant mood.

But like any good businessman, Humphrey refuses to rest on past successes, and has recently restructured the shape of the organisation, splitting it into six divisions operating under the Shebang Technologies Group name in a bid to fuel further growth.

Humphrey says the move was designed to show Shebang is not just a distributor, with the changes enabling clarity on incoming revenues and ensuring it puts itself out to the right market with the right banner. He adds that he’ll have a good idea later this year as to how this restructure is working, and will help decide where he needs to focus his efforts.

Franchise plans
Humphrey is keen to discuss Shebang’s Purple Partnership franchising operation. It’s an area of the business he earmarked as his main focus for 2011, labelling it in these pages as “best by a mile”, when compared to other players.

Shebang owns 58 stores under the Go Mobile brand and has 51 franchise shops trading, with four more due to open by the end of this month, in Cleveland in the north-east, Bedminster in Bristol, and in Welsh towns Aberystwyth and Brecon.

It will look to sell its current portfolio of shops, bar a couple, to franchise partners. Humphrey is targeting 200 stores nationwide by the end of the year, and has identified up to 80 towns in which the company could have a retail presence.

Every new shop comes with a store refit, and eight of these are being lined up for the next two months. The new look will see interactive screens displaying Go Mobile’s latest offers; handsets connecting to screens that display specifications when the phone is lifted off its cradle; as well as special offers projected onto the floor each shop.

Humphrey says: “We’ve highlighted 80 towns where we feel there is room for a mobile phone store to dominate. Our intention is to grow through franchisees and not through direct store-ownership. There is a distinct possibility we’ll have 200 stores by the end of this year, but there is a lot of work to be done to get it up to scratch with the right technology and having the right look and feel for customers.”

He continues: “It’s very difficult to run retail nowadays, with the margins available and the number of people moving to 24-month contracts.

“To get the right model and make money when you’re running company stores, you have to have multiple members of staff, because you’re a bigger organisation.

“It’s probably an additional £4,500 cost per month than what you need to have in a franchise operation. A franchise partner will earn £100,000 a year over a five-year period if he works really hard and services the customers within the brand guidelines on behalf of the networks.”

Better coverage
In February, Fonehouse managing director Clive Bayley told Mobile News of his ambitions to become the third-largest retailer in the UK by the end of next year. It would achieve this by opening a further 120 stores to take its total store count to 170, using its own franchising operation to drive momentum. That number, at the moment, would trump what Go Mobile has on the high street.

The Fonehouse statement came with the company seeking to capitalise on its raised profile after featuring in Channel 4 documentary Mary Portas: Secret Shopper. The show detailed a store refit programme Fonehouse itself is undergoing, to provide customers with a more interactive experience and to create a ‘sit down and relax mentality’.

Humphrey claims Go Mobile’s position is not under threat, even having a dig at the speed at which Fonehouse is rolling-out its franchise programme. He also claims Go Mobile has better nationwide coverage, with its ability to sell the Apple iPhone and sales systems it has in place as key differentiators.

“I love competition,” he says. “We’re new into the franchise proposition, but have plenty of experience in retail, similar to what Clive has. He’s been selling his franchise idea for a few years but it’s only growing in small numbers.

“We don’t allow any of our stores or anyone within the Go Mobile brand to do unlocking or handset repairs. It’s all about operating as you would from a network-owned store and making sure we deliver that service to the customers.

“With Purple Partnership, we’ve certainly exercised our ability to deliver far better on behalf of the supplier partner and ensure our franchisees are at the required standard. That means our partnership will continue to deliver quality results, profit and give them a far better future from that brand than other people.

“We’re able to sell the iPhone, which generates a tremendous amount of sales. You’ll see from the way we develop that franchise in the future, with the store and technology fits we’re now doing and the way we’re working together with our partners to ensure they understand on a daily basis where their cashflow and profit and loss is likely to be.

“We offer a full EPOS (electronic point of sale) retail system. We’re going to work together and enjoy success together and we’re going to go through pain together, so it has a far more personal touch than others.”

Sponsorships
Go Mobile’s branding and sponsorship deals are aiding its ambition to be a leading player in mobile retail, with a new partnership within the British Touring Car Championship (BTCC), which Humphrey believes will significantly accelerate this ambition.

It has spent £500,000 to be the title sponsor of a team competing in the 2011 Dunlop MSA British Touring Car Championship, with two Chevrolet Cruzes run by Tech-Speed Motorsport covered in Go Mobile signage.

During each race day Go Mobile will have stands where information on the locations of its stores, as well as sales offers in them, will be given out. All customers buying a contract handset from Go Mobile will be entered into a draw to win tickets to BTCC races and meet the drivers, as well as having the chance to win a BTCC replica Go Mobile Car at the end of the season in October.

Humphrey is predicting 10,000 new contract connections from the increased footfall. He believes the deal is one that will give it the national recognition it craves and drive footfall, which in turn will convince new franchisees to join Go Mobile’s programme.

Locally, Shebang sponsors Daventry Town Football Club, of which Humphrey is chairman. It recently spent £400,000 on a new clubhouse. The site includes viewing balconies and conference facilities, as well as corporate rooms, a bar, changing rooms and treatment area, manager’s office and patio-barbecue area.

“The amount of stores we have at present isn’t enough to build a decent national brand but the BTCC gives us our first national coverage,” Humphrey says. “We’ve spent £500,000 on this and you don’t make these decisions lightly. It’s about building the brand into our stores and onto the web; we’ll get that recognition we yearn for, to be a bigger brand. This will give us a big edge, both in our retail and web sales and gives our franchisees bigger opportunities than anyone else to get more.”

Full article in Mobile News issue 486 (April 11, 2011).

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