wersky and John Maguire in 2005 when it was placed in receivership. Establishing Lincraft Australia, Swersky and Maguire have grown the retail chain, which specialises in craft, fabric, yarn, haberdashery, window furnishings, manchester and fashion accessories, to now have 75 stores in Australia and four in New Zealand. Justin Grey: What kind of 2015 has Lincraft had? Brian Swersky: I think we’re seeing some light at the end of the tunnel now. Sales are creeping up and we’re getting like for likes better. Margins are coming back – they were the big issue once the dollar dropped, it takes a little time to pick up that margin. So we’re expecting a good Christmas. Early signs are that it should be okay. JG: What is the Lincraft strategy as the Christmas trading period nears? BS: John and I bought [the business] in 2005. Up to that point they never stood out at Christmas; they basically just let it happen around them. So we’ve in the last 10 years gone into Christmas in a big way – to the point that I’d say that we’re one of the key players at Christmas in terms of decorations trees and ornaments and that side of Christmas. And we’ve got more in giftware in terms of our craft – it’s not just coloured pencils and paints anymore, it’s kits and that sort of gift-giving stuff. So in some respects we’ve created a Christmas business for ourselves. And that’s made a significant difference in turning the business around, quite frankly. Early signs from our November sales are that it will be good. We’ve budgeted up marginally on last year, so we’re expecting it to be good. We’ve bought well, so we’re punting for a good Christmas. JG: How successful was the Click Frenzy campaign Lincraft ran this year? BS: It’s a 48-hour campaign – the first 24 hours were about the same as last year, which is good. I haven’t seen the reports on the final 24 hours, but based on the first 24 hours I’d say it’s about the same as last year. It’s a quick campaign and it drives lots of traffic to your website. There’s lots of strategies on how you approach Click Frenzy. Some people take pages and pages of product on the Click Frenzy site; we tend to put the key products in there. And hopefully we capture them while they’re [on our site]. But certainly, one can’t ignore it. JG: How are online sales tracking for Lincraft? BS: Online is not as scary as it three or four years ago. Funny – it turns out that having a bricks and mortar presence is actually an advantage to online. Who knew?! But that is the reality. There are many pure players around that aren’t making the sort of money that people think they are. That’s the whispers I hear, but I don’t know for sure. Online is what it should be, and that is it should be in your top three or four stores by turnover. And it continues to grow. It needs a very different thought process to traditional bricks and mortar, in terms of logistics and marketing and how you handle the social media and that sort of thing. We are launching a new website at the end of the month –  just changing the background and allowing for the click and collect option down the track and all these new-fangled ways of doing things. But we’re certainly investing in online and putting together a young team who understand it. From our point of view, what has been remarkable – and it’s the nature of our business too – is the social media component of our website. It creates a community of customers. With our customers, we might put up, for instance, a ball of yarn and say, ‘show us what you’ve made with this’.  And people love putting up what they’ve knitted or made, and it creates community interaction and people love to show off what they’ve done. Now, that maybe doesn’t translate directly into sales in a measurable way, but [by] being able to engage your customers and keep them in the framework of your business, there is bound to be a spin-off at some point. So we’re spending a lot of time on that component as well. JG: With the rise in online shopping and social media, customers’ expectations have dramatically shifted. Are you seeing examples of that in your business? BS: We’re committed to online – it has to be integrated into your business – but the customer expectations are so different to coming into a store. And you’ve got to gear yourself around those expectations, because that’s the new normal. I sometimes look and see someone’s ordered something on the website at 2200 on a Sunday night, and then you get an email on Tuesday morning saying, ‘well, where’s my product?’. And you think, ‘What the hell do they expect?!’. But that’s the expectation. And the power that the consumer now has to vent and damage you is extraordinary, and it has to be managed. The consumer has been empowered – in the past, if you had a problem, you ring consumer affairs, they’ll tell you to put it in writing fill out a form, and they’ll get to it in three months time. Now, the consumer gets on Facebook or other social media or YouTube and pow – they’ve got a voice. And so they should – I don’t have a problem with it. But this is the new normal and is what we need to be able to deal with nowadays. It’s created a whole new thinking. JG: Earlier this year you noted plans to open three new stores in New Zealand by the end of 2015. How are those plans tracking to date? BS: Upper Hut opened on the 23rd [of November]. We opened in Taupo about a month ago, and that’s gone really well. And we’ve got another store locked in for February. New Zealand has been a very good development for us. Once you work out the arduous logistics of customs and employment laws and jurisdictional issues, which in some respects is no different to us opening up in WA, where the laws are different. It’s just a process, but once you get that together the marketplace is New Zealand is great. It differs from Australia in that there’s lots of really good sized small towns, so there’s lots of Ballarats and Bendigos and Geelongs, if you like. It’s not all concentrated in four or five big cities. You need a certain population to sustain a store, and there are not that many regional towns available in Australia. In New Zealand, there are lots and lots of them. And also in New Zealand, the geography is such that there’s often a mountain range between one store and another, so if you’re in a certain location you tend to have a captive audience there. So there’s a lot of opportunity in New Zealand and we see a lot of future there. There’s a good demographic, they’re crafty sort of people, and funnily enough they know the brand, for some reason. A lot of them come over to Australia all the time, so we’ve had good penetration over there in three years. Spotlight has had New Zealand to themselves for the last 13 or 14 years, so there’s opportunity to create a bit of a point of difference and give the consumer a choice. JG: Are the NZ stores similar to the Australian stores, or are you employing a different store strategy over there? BS: We’re pretty much replicating our Australian model and the footprint is pretty much the same. The promotions are pretty much the same, obviously staggered because it takes longer to get stock there. But we operate pretty much as we do in Australia, and you need to do that so you can streamline it. Obviously as we build a critical mass in New Zealand we’ll probably establish a distribution centre there and import directly in. And probably six to eight stores is getting to that point. It’s getting to that critical mass where we now need to start looking at some logistics changes to the way we do things over there. Our intention is to push into New Zealand. It’s exciting … you’ve got to keep growing. JG: Locally are there plans to build on the current 75-store network? BS: We will grow as the opportunities come back. There are still gaps in various locations – South Australia, Northern Territory and WA are wide open for us. There are parts of regional Victoria and NSW and some of Queensland that we still need to explore. So there’s plenty of room for growth. Want more Inside Retail? Subscribe to Inside Retail Weekly now and get our premium print publication delivered to your door every week.