From Adelaide to Champagne: behind the push to take R.M. Williams global

From Adelaide to Champagne: behind the push to take R.M. Williams global

Published 05 February 2014 10:40, Updated 05 February 2014 11:06

Simon Evans

A dusty R.M. Williams boot and a gleaming glass of Moet champagne might seem like opposites, yet the two will be unlikely bedfellows in a new private equity strategy to take the Australian icon global.

R.M. Williams, the bush apparel company founded by Adelaide bootmaker Reginald Murray Williams in 1932, is ­planning an ambitious expansion in both Europe and Asia to lift revenues almost fivefold to $500 million. The new five-year strategy has been signed off by a private equity firm backed by luxury goods giant LVMH Moet Hennessy Louis Vuitton, which owns 49.9 per cent.

L Capital Asia snapped up its stake in a $50 million-plus purchase in May last year from owner and former media executive Ken Cowley, who still holds 50.1 per cent. The five-year expansion drive starts in July, 2014.

L Capital has the option to gradually buy out Cowley, a former righthand man to media mogul Rupert Murdoch, and will eventually assume full control of the company.

With its craftsman boots that sell for $430 a pair, and a range that stretches up to $8000 for a pair of President boots made from exotic leathers such as crocodile and ostrich skins, L Capital and the luxury LVMH house want to propel R.M. Williams into a similar league to other brands in its stable, including Louis Vuitton and Christian Dior.

R.M. Williams has a flagship store in London and is shifting to a new location at its New York outlet. The new strategy involves opening at least eight new stores in Europe from early 2015 onwards, and expanding the range into high-end department stores and independent retailers over the first 18 months to two years of the plan.

The focus will then swing ­aggressively to Asia.

R.M. Williams chief executive Hamish Turner says the Asian growth would begin after 2016, with success in luxury goods in Europe seen as a ­prerequisite by Asian consumers, and an important springboard which needed to happen first.

“Success in Europe is viewed very highly by the Asian markets,’’ Turner says.

He says R.M. Williams aimed to lift global revenues to more than $500 million within five to seven years, from the current $119 million. The European expansion will centre on the UK, Germany and Scandinavia.

Strategists believe Australian icon can be lifestyle brand

L Capital wants R. M. Williams to become a major global brand.

“We believe this can become a global lifestyle brand,’’ Sanjay Gujral, a regional managing director for L Capital Asia says. “Asian expansion is one of the components of growth.

“The potential for the brand is not only in Singapore and Hong Kong. It clearly has potential in North Asia also.”

The main CBD stores in Australia will also undergo a revamp with a new look within the next 12 months to 18 months.

It marks a serious step-up for the brand, whose founder Williams began making boots in a small workshop behind his father’s house in the inner Adelaide suburb of Prospect.

Cowley was chief executive of Murdoch’s Australian arm News Ltd from 1980 to 1996 and had a strong friendship with Williams, who died in late 2003 at his home near Toowoomba at the age of 95.

Another Australian media mogul, billionaire Kerry Stokes, who controls Seven West Media, also had a strong hand in reviving the brand which fell on hard times in the late 1980s.

Cowley and Stokes jointly held more than 90 per cent of R.M. Williams for 10 years from 1993 to 2003 when the company was a separately listed entity on the Australian Securities Exchange.

The Cowley-Stokes duo were an unlikely combination in 1993 when they financially rescued R.M. Williams after its then parent entity, Bennett & Fisher, went into receivership.

Their ownership brought much-needed stability to R.M. Williams, which had a tumultuous few years in the late 1980s including fending off a failed takeover bid by United Kingdom fashion house Laura Ashley – which at the time also had global aspirations for the brand.

Cowley privatised R.M. Williams with a $1.20 a share cash bid in late 2003 when the company was valued at just $26 million. Using the L Capital Asia investment as a benchmark, the May, 2013 buyout of 49.9 per cent valued the company at just above $100 million.

An extra eight stores in Myers planned for 2014

The Singapore-based L Capital Asia won’t talk specifically about the ­buyout timetable for the remainder of the company.

But it has already enjoyed a strong upturn in profits from its investment, with R.M. Williams revenues rising by 4.4 per cent in 2012-2013 to $118.6 million, and profits rising to $3.8 million from $2.55 million a year earlier. A new contract to supply boots to the Australian Defence Force from August, 2013 will kick things along this financial year.

It also sees room for strong expansion in its home market of Australia, and part of that includes an acceleration of the number of concession stores inside Myer department stores.

An additional eight concession stores inside Myer are being opened in 2013-14, on top of the six that were opened in Myer in 2012-13. That will bring the total number of concession stores inside Myer to 20 by the end of the current financial year.

Australia not forgotten

L Capital’s Gujral says the Australian market won’t be neglected in the push to make R.M. Williams a global brand. “We believe that the Australian market in itself offers a lot of upside,’’ he says.

R.M. Williams has a total of 68 stores including the Myer concessions, stand-alone stores and the two in London and New York.

Myer’s general manager for menswear Karen Brewster says the expansion of Myer concessions was driven by “positive reaction’’ to the range by Myer shoppers. “It’s not just the footwear that the customer is responding to, but also the R.M. Williams range of very appealing apparel and accessories,’’ Brewster says.

Turner says he didn’t want to reveal future targets around store ­numbers, with stand-alone stores only a part of the strategy, which also involved a substantial step-up in sales of R.M. Williams boots and apparel through department stores and independent retailers. Sweden is already a strong market.

Turner says the company sold about 15,000 pairs of boots in that ­country annually.

L Capital Asia has a strong presence in the R.M. Williams boardroom, contributing three of the seven directors.

Christina Teo, the managing director for south-east Asia for L Capital Asia, and Uday Mehra, also a regional managing director of L Capital Asia, were appointed to the board of R. M. Williams in May, 2013. Philip Corne joined the board as an L Capital representative in September, 2013.

Rise of a bush legend

1932: Reginald Murray Williams starts making boots, saddles and bridles in Adelaide.

1988: Williams sells the business to Adelaide businessman Tony Summers.

1993: Business falls into receivership.Ken Cowley and Kerry Stokes assume control.

2003: Cowley becomes sole shareholder.

2013: Cowley sells 49.9 per cent to L Capital for around $50m.

2014: RM Williams posts 49 per cent rise in profit for 2012-13 to $3.8m.