Strategy is bags of fun

Had you walked into the handbag designer Anya Hindmarch’s head office in London last February, you would have been struck by how weirdly hirsute it was. All the men were either in the process of growing a beard, had a full-fledged beard or were just about to shave off their beard. 

The company was not engaged in the facial equivalent of growing a hair shirt in empathy with their economically-squeezed customers – though the recession did have something to do with it.

“It was a beard-growing contest, with very strict rules and prizes for growth and creativity,” says Ms Hindmarch. An employee from the graphic design team won simply because the contrast with his usual clean-shaven mien was so extreme.

“It was the web team’s idea,” she explains. “We had them for supper at home and my husband James [Seymour, the company’s finance director] had failed to shave that morning. We were joking around and came up with the plan – anything to brighten what was a pretty depressing month.”

Perhaps because she started her company, which had revenues of £20m ($32.5m) in 2008, when she was 19; perhaps because she has no business school background; or perhaps because she made her name on such leavening products as evening bags that resemble beaded satin packs of Malteasers and tote bags with a tongue-in-chic schnauzer photo-shopped onto silk, Ms Hindmarch has based her recession-busting strategy as much on play and humour as on cost-cutting. And though some of her innovations seem, on the surface, like the sort of cringe-making bonding exercises occasionally practiced during corporate away-days, the result has, she says, “been our best quarter ever”, with revenues up 4 per cent at a time when most luxury businesses are experiencing negative growth. 

“The thing is,” she continues, “this is really about personalising action: buckling down and fostering a sense of community in hard times. So it’s not company versus its employees or versus its customers, but rather a group of people who are all in the same place, working together for the same goal.” 

Ms Hindmarch first began her fun-and-games strategy a year ago when she made an internal presentation about reining in costs and debt. Instead of merely running through the sales numbers from her 53 stores around the world, however, she used slides of about 20 posters from the second world war of the “Keep Calm and Carry On” variety. 

“People asked if it was really that bad – I think it scared them a bit,” she says. “At the same time, though, it made them laugh, and did create this sense of hunkering down together.”

The reactions also gave her an idea, which she leveraged to boost both internal morale and balance sheets. After all, Ms Hindmarch points out, using fun to offset the pain of financial reality can provide not just a psychological outlet but tangible cost-effective solutions. 

So she made 41 photocopies of £50 notes and handed them out to every employee with the caveat: “If you can think of a way to save £500, you can keep the note.” The point was to raise awareness of the small ways it was possible to think about spending, whether it was simply re-thinking business travel and the approvals process for trips or going through the line items while ordering office equipment. “It was empowering for everyone to make their own recommendations about where to save,” she says. The result was £25,000 in savings. 

From there, the idea of creating little rewards grew, so that in effect everyone was “competing against themselves” and the more they saved, the more they won. Ms Hindmarch established certain “treats” such as a weekly manicure and pedicure for her employees – “that way they don’t leave the office to get one”, she says, noting it also means more actual time at work – and started occasional on-site pilates and yoga classes. 

The rise in morale was palpable enough for the designer to decide to extend the tactic to her customers, and she embarked on a number of limited joint ventures with other niche brands to offer similar perks in-store: florists Scarlet & Violet set up a temporary flower stall in her shops; ice-cream brand Norris Ices was enlisted to serve ice cream for a week; and cosmetic brand Chantecaille came in-store to do pre-cocktail makeovers for customers. The cost was simply the floor space donated. The effect was to pull people into the stores and help bind them to the brand.

“They feel they’re being treated like friends, and shown our private address book,” says Ms Hindmarch. “One mother came in to buy her daughter an ice-cream and the daughter announced the next time she wanted both an ice-cream and a handbag. 

“I’m a great believer in the village church barometer,” she says. “We all spend so much time in our own little world, communicating via e-mail, that we need to actively find a sense of common purpose.” 

Even if it’s just agreeing the punch line to a joke hatched over supper.


(Copyright The Financial Times Limited 2009)