RETAIL – ARMIT: Personality cult

The personal touch has been vital to the resurgence of Armit in recent years. It has also sparked ambitious plans for expansion, as Ben Grant discovers

During an hour in the company of Armit chief executive Ian Ronald, the word “personal” comes up every other minute. Dotted around the London offices, captivating portraits of many of the company’s principal suppliers gaze, smile and stare back at me. A quick glance through the company’s website reveals engaging profiles of each and every member of staff (even the IT guy). The organisation even takes its moniker directly from its founder. There’s no doubting that this business is all about people.

When you’re buying a DVD recorder it doesn’t matter if you buy it from Website A or Website B – it doesn’t matter if you don’t talk to a soul. But wine’s not like that,” says Ronald. “We’re not selling a necessity, it’s a product that people buy to enjoy themselves, it’s a sociable drink that’s emotionally bonding.” To this end the Armit philosophy is centred around the fact that purchasing must be a pleasure, establishing strong personal relationships with each and every customer.

After a major overhaul, the last 12 months have been an enormous success for the company, but it was not always thus. The return to the black in 2006 represents a major turnaround after what can only be described as a rather traumatic period, about which Ronald is candidly honest in his appraisal.

Too much, too young
The company was founded in 1988 by John Armit, the former Corney & Barrow managing director who was responsible for setting up a number of the capital’s most revered members clubs. The business was initially focused on servicing private clients, but grew to include hotels and restaurants, corporate clients and trade, eventually reaching revenues of approximately £13 million in 2002.

At this stage, however, it “hit the glass ceiling”, accoridng to Ronald – as with many owner-managed entrepreneurial businesses, it had been very successful to a point, but had reached a size where different skills and infrastructure were required. The proposed solution was a radical new system; but the implementation of this major new technical set-up was something of a disaster (not least because it coincided with – and dramatically complicated – the delivery of the Bordeaux 2000 en primeur wines).

A troublesome few years followed as the company struggled with both its infrastructure and its identity. “The business was pursuing a strategy to become more accessible and broaden the number of customers it dealt with, but it was very difficult to do this well. We sat down and thought about what we were trying to do, so we now have a very clear model of what the business is. We recognise our strengths and no longer try to be all things to all people,” says Ronald.

Private clients continue to make up over half of Armit’s total business, with revenues expected to top £19m this year. The strategy here is to offer a bespoke service, establishing a strong individual relationship. “There are hundreds of places you can buy wine,” Ronald points out. “The factor that ultimately determines whether you buy from one company or another will be whether you get on with the people you are dealing with.”

While the company used to bring in as many new customers as possible in the hope of engaging with tomorrow’s big spenders, the focus now is “providing a spectacular service to our top clients”. Ronald explains that providing an exceptional personal service to this small group of big spenders is a “virtuous circle” – look after them well, and they’ll pass the recommendation on to their wealthy friends.

Information nation
Given this reliance on personal contact, one may wonder why there is a need for the company to operate such a strong website. Interestingly, while the site is a fully operational e-commerce facility, it seems that its primary function is not to sell wine, but to communicate. Ronald insists that the site is first and foremost a commercial operation, but he also points out that “you don’t build up a million-pound cellar by tinkering away on the web”.

In a world where consumers are obsessed by amassing information, the www.armit.co.uk url lets them learn more about the company and investigate what’s in stock. With this knowledge, they are subsequently more comfortable engaging with a member of staff and making a purchase over the telephone. The catalogue plays a similar role of fore-arming customers with a wealth of information.

As well as the nitty-gritty facts, both website and catalogue provide an opportunity to breathe some life into the human beings that are involved in the process. The website includes an introduction to every staff member – in fact, writing this profile is one of the first jobs that a new member of the team is expected to perform.
The catalogue is, of course, crammed with details about the wines on offer. However, it is broken up by engaging and informative passages about the winemaker, estate, region and history – and illustrated by large, enigmatic portraits of the men and women responsible for the wines.

People power
“Many things combine to make the product, but we think the biggest single factor is the person who is driving the creation. We like to get to know our winemakers, and we want to let our customers get to know them too,” says Ronald.
Looking to the future, there is little doubt that Armit has some pretty ambitious plans. Having got the business “on an even keel”, there’s plenty of room to maximise the infrastructure and grow the business organically.

However, Ronald’s assessment of the market indicates a belief that major opportunities lie in a more aggressive expansion plan. “Our view is that the top end of the fine wine market is ripe for consolidation – there’s an unbelievable number of businesses, many of them struggling to make any money.”

Focusing on the benefits of increased efficiency, Ronald boldly asserts: “We think consolidation is necessary and are looking at ways that we can drive that. We do have specific targets and, yes, we also have the budget.” If the company pursues this strategy, the biggest challenge will be to ensure that as the business grows, it does not lose the focus on personality and individuality that has been the key to success thus far.

Italian flavour

The notorious complexity of the Italian wine market is perhaps one of the main reasons why most UK distributors rather shy away from the category, but this is the very factor that makes it so appealing for Armit. The company carries a wide range of fine Italian wines, is the largest UK buyer of Sassicaia and is Angelo Gaja’s UK agent. In particular, it is the personality-driven nature of the category that makes it such a neat fit for the Armit portfolio.

“As a country, Italy is harder to understand that France,” says Ronald, “but that’s what we really love about it. They are very passionate about the heritage and culture, but also very keen to experiment – that’s what creates such incredible wines, and it also adds to the rich story-telling.”

He is particularly attracted by the “organised anarchy” of a culture that is not exactly renowned for sticking to the rules. Additionally, because winemaking is such a widespread activity with growers producing an enormous range of wines from virtually every corner of the country, Italy boasts a tremendously diverse range.

In terms of the reticence of much of the UK trade towards Italy, Ronald believes it is ultimately an issue of confidence. The willingness to experiment naturally results in some “pretty dreadful wine” that may undermine confidence in Italy among both consumers and trade, while he also suggests the wine press is in part responsible. However, the Armit team is convinced that when Italian wine is up to standard, it is truly exceptional. And it is supported by just the sort of personalities that are so critical to the company’s business.

© db February 2007