Jacqueline Gold brought Ann Summers parties into front rooms across Britain. They turned the sex shop chain into a multimillion-pound business and a high-street name. Today the chief executive is at the end of a two-year rebrand and wants to expand the business internationally. She explains why a recession is the perfect time to move on…
Aged 19 and in need of work experience, Jacqueline Gold joined her father's company, Ann Summers, in 1979. Earning £45 a week – "less than the tea lady" – she moved around the business trying out different tasks from mail order to payroll. Today she is chief executive of a £118m turnover business with profits of £5.5m, a sales force of more than 7,500 women as party organisers and 150 high-street stores in the UK, Ireland and the Channel Islands. In 2011, she ranked 25th in the Sunday Times list of the Richest Women in Britain.
Gold says her lack of business experience, which at the time she thought was a big disadvantage, has been key to her success – forcing her to rely on feedback from customers. Two years after she joined the firm, a couple of potential customers initiated the idea of the Ann Summers party plan, which was to transform the business. Invited by chance to a Tupperware party, two women suggested Gold run Ann Summers parties. "They wanted to be able to buy sexy underwear and sex toys but didn't want to go into a sex shop," she says. Gold took the idea to the all-male board – an intimidating experience for the then 21-year-old. She recalls one director stating the idea would never work because "women aren't even interested in sex".
But Gold managed to persuade the board to invest in the idea. She started advertising in London's Evening Standard and recruited 500 party organisers in the first year. "Suddenly lots of women were coming to these parties," she says. "Some loved the fact that now girls could have fun. Others were excited but also
curious at the same time."
The business was growing so fast Gold had to stop advertising as she ran into teething problems that come with sudden growth. "We had the infrastructure but didn't have the technology to match it. I was throwing people at the problem rather than the expertise," she explains. In its first year, 1981, the party plan turned over £83,000 and from then on grew 20 per cent a year. Gold focused on this side of the business, closing three of the four "awful" Ann Summers shops that existed at the time. "They were white and clinical, aimed at men – the raincoat brigade customer – and sold dolls and videos."
It was another 10 years before the company started opening stores again – this time on the high street. "Once the party plan had settled I thought it was time to take the concept into the stores. It was a female-friendly concept. Although the stores have evolved over the years, the new stores at the time, although they were mint green, were far better than anything we'd had before."
Today retail is the company's biggest sales channel while internet sales is the fastest-growing area. In 2000, Gold bought lingerie chain Knickerbox, which had losses of £5m. She saw an opportunity to introduce Knickerbox customers to Ann Summers and vice versa. The takeover added another 26 stores to the Ann Summers group, which saw footfall increase immediately.
What women want
Ann Summers continues to be a customer-led business and it is customers again who have driven the latest rebrand. When most companies were battening down the hatches during the recession, Gold decided it was the perfect time to research the brand – to assess what it was doing right and wrong.
"We realised Ann Summers had lost its mojo. Customers were saying we were less edgy compared to the rest of the high street and that there was a lack of naughtiness when comparing the Ann Summers of today to the Ann Summers of old," says Gold. "We recognised that we had become a little too safe and had started to lose what made us different. It gave us the opportunity to reinvigorate our brand. Some businesses might think we were mad to spend on research at such a difficult economic time, but for me it was crucial. It's the businesses that stand still and stop listening to their customers that will suffer more."
The rebrand, which began two years ago and has so far cost well into seven figures, started by looking at the product. Gold shows me some of the latest lingerie collection. "It's much more fashion-led now where before it was led by social trends," she says. "We've not turned our back on our heritage, if anything we have enhanced our heritage product, but we realised we also need to be more edgy." She points to the "big girls' pants with a difference", designed with a sexy V shape at the back and a camisole with a tattoo design on the neck. "We're doing more designer products at high-street prices," says Gold, showing me a beautiful silk bra priced £26.
The research also revealed that, unwittingly, Ann Summers catalogues were using images aimed at men. "Our customers wanted sexy but they wanted to be classy, too. Now we use fashion models and the poses are more empowering, with more attitude. It's about women being in control and our customers love it."
Next on the list was changing the packaging, which Gold felt was dated and undervalued the product. "It was all about giving the customer the confidence to buy in our stores. Customers want to trust the brand, particularly in this environment. It's not just about delivering a brilliant product, it's also got to be packaged beautifully and treated with respect."
The packaging for the company's best-selling product, the Rampant Rabbit vibrator – two million are sold yearly – now has a smart black background with neon lettering and imagery. The "R" has been turned upside down to resemble a rabbit with ears. "Even vibrators have to be edgy now," says Gold. "People don't want phallic-shaped vibrators, they want something less threatening in its appearance. Today's customer is more sophisticated and has great product knowledge. She wants something that is quiet and discreet."
Finally, new branding had to be translated into the stores, which had intimate "honeycomb" areas where customers browsed products discreetly. "Ann Summers had moved on so much, it was now a high-street brand influenced by pop culture and women like Rihanna and Christina Aguilera," explains Gold. "Customers no longer wanted that intimate environment, they wanted it to be open again. Our new store at Westfield Stratford City has a giant rabbit in the middle of the store because our customers don't want to feel like second-class sexual citizens being sent to the back of the store.
"The key element for us was obviously giving the customer the shopping experience, which is also about theatre. Customers want more out of shopping and we want them to stay in the store for as long as possible."
Recession proof?
Gold has no regrets about rebranding during a recession. She believes it has moved the business to another level. Despite making the strategic decision to absorb the VAT increase and facing challenges in the Far East in relation to profit margins, the business has continued to be profitable. She is hopeful that in 2012 it will start to see a return on all investment.
"It's really tough out there. From what I'm seeing the retail winners tend to be high end and the pound shops. It's those in the middle that are suffering together with discretionary purchases, which you would say we fall into. However, I would much rather be where we are than a lot of other businesses out there."
Gold believes the uniqueness of Ann Summers, as well as the fact it has always been run prudently, has also helped it through the recession. "Although we cut back we didn't suddenly have to go out and make massive redundancies," she says.
But it hasn't always been such a smooth journey. Gold says one of the biggest challenges she's faced in running the business was in 2003 when she took the government to court because it wouldn't allow her to advertise at Jobcentres – and won. Another happened
in 1999/2000 when she tried to launch a store in O'Connell Street in central Dublin.
"I had Dublin City Council immediately on my case trying to stop us from going ahead," she recalls. "The council said that they couldn't be responsible for what happened if I did. And a week before we opened I got a bullet through the post. We went ahead with the
opening anyway. Although the council issued a writ the day we opened, we had 10,000 people through the door on that day. The Dublin site is now one of our top three performing stores."
Family support
Aside from the business hurdles, Gold has dealt with serious personal challenges over the last couple of years. First, the death of her twin son Alfie, who died aged eight months due to a severe brain disability, and second, the well-publicised incident of her nanny trying to poison her with screen wash. How did she cope?
"It has been very tough. I took the nanny on when my son was four months old because I was struggling to cope with running a business and visiting my son, who was in a home with specialised care. I needed support while I was going backwards and forwards to the home. Less than a year later she tried to poison me. She didn't have a problem with me. She just didn't get on with the cook. She thought that if she tampered with the food I might sack the cook if I thought that she'd done it."
During her son's illness Gold worked from home for three months. "My husband said to me, 'Jacqueline, you need to go back to work'. He felt I needed some normality in my life and I did. That's how I coped."
It helped to have family support. Although her father, David Gold, is not involved directly in the business, he is based in the same building. He is chairman of West Ham Football Club, which he took on with £100m debt. "He's really got his work cut out," says Gold. Her sister Vanessa was made managing director of Ann Summers in 2011. She's worked in the business for 26 years. "As a family we work well together. We have dinner together once a week without partners. We talk about the business and football. My father shows a great interest in what we are doing and I go to every home game."
Gold says her father has been a great mentor. "The first thing he always used to say, which of course is a Roosevelt saying, is that there is nothing more to fear than fear itself – which is so true in business. He is a calm individual, very focused. We are similar in many ways – we both look at the bigger picture."
She's quick to add that there are some things her father has learnt from her. "When I first joined the company the approach to business was very different. We didn't engage with our staff like I do now. If I talk about my management style now and what it takes to succeed in business, I believe it's all about engaging your people and bringing them along with you – good communication and not hiding anything from them. You get the best out of people if they feel part of the whole process and my father has adapted to that."
While her three-year plan is about extending the website, international expansion is the vision for the future. Gold believes the company has massive opportunity overseas. "I don't feel there is anybody out there like Ann Summers," she says.
Would she ever think about selling the business or taking it public? "No. Ann Summers is part of me as it is for my father and sister and we hope to keep it in the family for as long as we can." Does that mean she'd like her daughter to be involved one day? "I would love her to be but at the end of the day it will be her choice." So she doesn't mind her working in this kind of industry? Gold baulks at the suggestion. "Ann Summers has completely changed 'this industry'. And that is something I'm proud of – championing and empowering women."
