Transcription of The Stock Network Interview with Schoolblazer (ASX:SBZ), Executive Chairman Tim James
Lel Smits: Hancock & Gore is undergoing a strategic transformation, pivoting toward its wholly owned Schoolblazer Group, a technology-enabled global schoolware and sportswear platform. Led by Executive Chairman Tim James, co-founder of Schoolblazer UK, the business is targeting significant international growth, supported by strong e-commerce capability, long-term school contracts and expanding exposure to private education markets. I’m joined today by Tim James to discuss how Schoolblazer is positioning itself to capitalise on structural growth in global private education and changing consumer expectations.
Tim, welcome to The Stock Network.
Tim James: Yeah, it’s great to be here. Thanks for having me on.
Lel Smits: Now, Hancock & Gore is transitioning to become Schoolblazer Limited, reflecting a clear focus on schoolwear operations. But what does this shift mean really strategically for the business? And also, how does it reshape your long-term growth priorities?
Tim James: Well, it’s quite transformational for Hancock & Gore because Hancock & Gore have historically been a business which has bought and sold other companies and invested in a wide variety of different businesses. But now, having taken the decision to focus on one category, which is schoolwear, built around the Schoolblazer business, it means that we really have to get under the skin of a single industry and bring in real expertise in that industry.
So, if you look at the management teams that we’re building, particularly in the Schoolblazer business, they’re people with deep understanding and knowledge of the schoolwear industry. Whereas, I think historically, Hancock & Gore have tended to think, well, we’re generalists, we can buy and sell different companies, we essentially make our money on the sale process as opposed to on the operational process of the business. And this is a transformation because you really have to understand the operation of the business and how to drive additional sales and break into new markets and drive operational efficiencies, which I don’t think has historically been part of a sort of conglomerate’s view of the world, but it’s very much been part of Schoolblazer’s view of the world.
My background is, I built Schoolblazer over the last 20 years, so I have a real understanding of this business and I feel a real sense of pride now that we’ve persuaded Hancock & Gore to back us and invest us and put the full force of their organisation behind this industry, which is really exciting.
Lel Smits: Fantastic. And Tim, in terms of now scaling this to a global e-commerce model, Schoolblazer’s direct-to-parent e-commerce platform is central to your offering, with high service levels really and operational efficiency.
But what makes this model so scalable, do you think, across regions? And also, how do you maintain consistency in customer experiences as you’re now looking to expand internationally?
Tim James: Yeah, that’s a great question. So, let me start with the beginning of Schoolblazer. So, 20 years ago, we entered the UK market, and the UK market was lots of family-owned businesses, second and third generation, maybe the third generation weren’t quite as interested in running the business as the first generation was, or sort of schools trying to do it themselves and run their own on-campus shops.
And what we did in the UK market is understood that fundamentally, there are two customers in this business. There’s the school, who wants a beautiful, well-designed product that their kids are going to be really proud to wear, and that also is going to make them distinctive in their school market. And then the parents and pupils who just want convenience.
They hate buying school uniform. No one gets up in the morning and thinks, today’s the day I’m going to buy school uniform with my teenage kids. So, they just want a really efficient, convenient service.
So, we understood that having a fantastic retail offer, which was really simple to use, with intelligent sizing, because the reason you need to go and try things on in the shop is because you don’t trust the sizing. So, let’s build a really clever intelligent sizing algorithm to drive convenience for the parents, and let’s build a design team to drive real differentiation in product for the schools. And that’s been fantastically successful in our chosen market, which is the premium schools in the UK.
We’ve built a 35, approaching 40 percent market share. But when we look around the world, the rest of the world, particularly in sort of, you know, British-influenced parts of the world, looks exactly the same as the UK did. It’s still the same market structure, second and third generation family businesses, all schools trying to run an on-campus shop.
And it’s still largely the same garments, with lots and lots of played or striped dresses. You know, shirts and blouses are broadly the same. Knitwear is broadly the same.
Trousers are broadly the same. So, the same garments. And actually, when I look at the factories that we’re sourcing our products from overseas, then very often we’ve got lots of Australian businesses sourcing products, lots of people who are supplying the Middle East sourcing products from exactly the same factories.
So, we know we’ve got real scale economies in sourcing. And we also know that our investment in e-commerce and the website hits the spot with parents in the UK, and we know already in Australia hits the spot with parents in Australia, because fundamentally they’re the same people wanting the same things. They want super convenient, brilliant garments, and it to be as easy as possible for them to make the purchase decision.
And that’s what we’re delivering for them.
Lel Smits: And Tim, in terms of building defensibility, the business benefits from long-term school contracts and high barriers to entry driven by technology and this operational expertise that you’ve just outlined, how important are these factors in underpinning recurring revenue and also protecting market share as competition really evolves?
Tim James: Well, to be arrogant for a moment, we’ve been far and away the number one supplier in the UK for a very long time. We have a ratings network called Trustpilot in the UK, which is a consumers give you a point score.
And we get consistently five star reviews and average about 4.8, 4.9 on Trustpilot, whereas our competitors are typically 4.3, 4.2. What that means is they have 10 times the number of people being dissatisfied with their service. But despite that, schools are always reluctant to change uniform supplier because they think it’s a hassle. We know it’s not as much of a hassle, but they think it’s a hassle.
If you think about how long it’s taken us to build to 35% market share, being great, you have to be really bad to then lose the school. So you win them by being great and then you have to fall below a certain standard to lose them. And what we’ve found is just don’t fall below that standard.
Don’t fall below that standard and you hang on to the schools. So what that means is that we’ve got very high barrier to entry, not only due to our relationships with the schools, but due to our unsurpassed service level. When you present them with a 4.9 and they consistently have no parents complaining about your service, they consistently sign and re-sign the contract.
So we look at this business as more like a sort of software as a service type business that you just have ongoing recurring revenue. It’s hard work to win the schools. We wouldn’t deny that.
And it takes a lot of time and it takes relationship building with the schools. But once you’ve won the schools and you can consistently deliver the service, then you keep hold of them. And frankly, our Trustpilot score stands for itself really.
Lel Smits: Well, Tim, I really appreciate the introduction to Schoolblazer today and look forward to hearing more amidst some very busy months ahead for you.
Tim James: Yeah, it’s been a pleasure. Thank you very much for having me.
Ends