Doing it by the book

With a strong focus throughout his school and college life on a life in the retail business, it would seem a natural progression for Derek Hughes to now be heading up one of Ireland’s biggest book-store chains.

Hughes has built the thriving business around the age-old pastime of reading, a comparatively inexpensive delight that is sure to maintain its popularity throughout the recession.

However, cementing a strong foothold and indeed forging ahead with ambitious plans for expansion is all about never missing a beat in what has become a challenging marketplace, where customers are becoming increasingly penny wise.

Manning a stall in the popular and fashionable Dandelion Market represented Hughes’ first brush with the retail world. Later, during his college days, he opened a Snoopy store in Gaiety Green, which he subsequently went on to sell when he left third level. Hughes can’t recall how much cash was exchanged for his first enterprise, but recalls it was enough to elevate him to the enviable position of car owner. Being able to call yourself a motorist while still a student was certainly an attractive position to be in at that time in Ireland.

After completing his business and economics degree at Trinity College Dublin, Hughes set off, along with some friends, on a tour of Europe. However, he was unexpectedly and somewhat prematurely drawn back into the business fold. While the intrepid twentysomething was away travelling, the accountant at his father’s wholesale book company suddenly passed away and Hughes was summoned home to help out with the family business.

“They were difficult times in this country, as they are now. Woolworths had pulled out of Ireland and a number of major accounts went wallop, so my focus was on developing retail. I then set out and established Hughes & Hughes.”

There is no doubt that the time he spent at college gave Hughes a sound educational footing, but there is no substitute for practical, hands-on training, he maintains.

“I believe strongly in education – it gives a foundation. But the business world is very different to the academic world. The process is good, but there is nothing like first-hand business experience. College gives you some strong fundamentals but you can’t beat business experience.”

Growing and developing Hughes & Hughes from just one store on Dublin’s O’Connell Street into a successful specialist book-selling brand took a lot of careful planning. The fruits of that are evident today, with the company boasting 23 outlets. And it’s a company that’s not afraid to invest. A total of €2m was spent on the 14,000sq ft Dundrum Town Centre store. Now it and the Dún Laoghaire outlet are the two biggest of the tally. But it doesn’t stop there. In 2000, the first store outside Ireland opened at London City Airport, with a further store launched in Heathrow’s Terminal 5 last year.

“Retail is detail. It’s been a very focused, driven approach, both on the high streets and in the airports,” Hughes explains. 

The business has become so successful it now has a turnover of €50m a year, 15pc of the market share and 320 employees. For Hughes, the holy trinity of business success is staying positive, ensuring you have good people around you, and having ambitious plans to drive the business and the team forward.

Constant change, he adds, is a given in business, so welcome it, be prepared for it, and seek new ideas and opportunities off the back of it.

Transforming the company from a wholesale to a retail model has been one of the biggest examples of innovation in the company to date. “I sold the wholesale business in 1998 to  work entirely on retail. Making the transition from wholesale to retail took a lot of thought and specialisation. I realised that myself and the management team really needed to be focused on a daily basis on the retail business and not get distracted with the wholesale side.”

In their larger stores, Hughes & Hughes boasts some 40,000 titles. Also, its customer-service promise is to source any book in print within 10 working days.

While bookshops can sometimes be seen as quite fussy and intimidating places, the Hughes & Hughes store design rivals the best internationally, he says.

“We have a much more welcoming type of approach. Layout, design and the innovative way the stores are brought together make this possible.”

Developing a brand within a brand, with Hughes & Hughes Junior – the dedicated section of books for kids, parents and teachers – and introducing coffee into stores are other ways it is moving with the times. Back in the late Nineties Hughes & Hughes was the first in the market to bring coffee into their shops. It was this concept that gave birth to the well-known Insomnia brand. A number of in-store collaborations have also taken place with world-famous coffee brand Starbucks. Stationery is the next area it’s moving into, with the Scribbler brand going on sale in the bigger stores.

Although it currently holds a 15pc market share, the company is looking to increase that. “Certainly we’re moving into a very challenging environment, so we will be looking to bring up our market share to above 20pc. We feel we can achieve that over the next two years.”

Hughes’ other business interest, Insomnia, came about after the Galway store began the coffee offer. “I realised I knew nothing about the coffee business, so I brought in a friend of mine, Brian Goss, as a partner and co-founder of Insomnia. We developed it, opened some high-street stores and then brought in another partner, Mark Duffy, who focused on the financial side of the business.” After diluting their shareholding, the trio was able to raise more funds to expand the brand. Subsequently, Bendini & Shaw and Park Coffee were acquired. The three founding shareholders went on to sell their share of the burgeoning business two years ago.

Hughes’ attention is now firmly focused on his bookstore chain. “We developed the business into a profitable company with good prospects going forward, and it was time to go,” he says of the decision to sell Insomnia.

He eloquently rhymes off the essential start-up prerequisites: steely determination, unflinching focus and towering ambition. “It’s critical that you have a well thought-out strategy, good people and good systems around you. Most critically, I think, you can’t assume anything. Whatever business plan you have, one thing is for sure: it’s going to be wrong. In most businesses, it’s the brand that’s key. Ensure this is well protected and that everything you do is a reflection of the brand.”

As well as seeing out the economically torturous couple of years ahead, the company also plans to expand its airport division further into the UK and select European markets. Further high-street store openings are also on the cards.

When it comes to his management style, Hughes says he sees himself as an informal leader. “I ensure that everyone stays accountable. Then let people get on with it.”

Every smart manager knows downtime can heighten the creative process and Hughes’ list of hobbies includes sailing, walking and golfing. It almost goes without saying that he is also an avid reader.

Business interests also stretch to London-based internet magazine Policy in Markets where he is a board director.

Adding a further string to his bow, Hughes also founded the Irish Book Awards, an event which has developed very significantly since its inception three years ago. Held in April each year in the Mansion House, it is an important platform for Irish authors promoting various genres internationally. 

One thing’s for sure, Hughes & Hughes is sure to continue to feature prominently on the Irish retail scene in 2009 and beyond.

This article first appeared in Owner Manager magazine.