London, United Kingdom – In the brutal game of retail, the Weston family has long proven skillful players.
For most of a century, they turned a Canadian bakery into a transatlantic empire that sells everything from groceries to $ 1,600 Gucci handbags. Along the way, they collected one of the world’s greatest fortunes and befriended another influential clan – the British Royal Family.
But now the Westons, who have mastered the vicissitudes of retail for four generations, are being tested by Covid-19.
It remains to be seen whether customers will flow back to Selfridges & Co. and Fortnum & Mason, the family’s luxury emporiums in London. And the Westons’ decision to shun online sales at their value chain Primark, a major source of their wealth, could backfire if social distance changes consumer behavior permanently.
That rebellious approach helped Primark to undermine its rivals and become one of the world’s fastest-growing clothing chains, with a 46 percent sales increase from 2015 to 2019. It has 79,000 employees and 380 locations in 12 countries, including a mega store in Brooklyn, New York. During this year’s closings, Primark’s monthly earnings fell to almost zero from £ 650 million ($ 806 million).
The pandemic has done more than retail turnover. It has disrupted the flow of goods to the sales floors and forced the cancellation of high-end fashion shows affecting the styles consumers are buying next year.
“The supply chain has been broken, the fashion calendar is no longer there, and who wants to buy designer brands with all the social questions we now ask ourselves?” said Thomai Serdari, who teaches luxury branding and marketing at New York University’s Stern School of Business. “Too much is happening at once. We need to rethink this industry. ‘
On Thursday, Primark’s parent Associated British Foods Plc, which also produces sugar, agricultural and food products, is expected to release the latest sales data. Last year, Primark generated half of the company’s sales and nearly two-thirds of adjusted operating profit.
The Westons, a sprawling family with a penchant for naming their male children with the letter G, are divided into two branches. The Canadian side has taken on a more public role, with matriarch Hilary Weston who was the Lieutenant Governor of Ontario in the late 1990s. Loblaw Cos., A publicly traded chain of supermarkets and drugstores with 200,000 employees and 2,400 locations, has long been a fixture in Canadian shopping centers.
Too much is happening at once. We need to rethink this industry.
WG Galen Weston, the 79-year-old grandson of George Weston dynasty founder, derives much of his wealth from a majority stake in George Weston Ltd., a Toronto-based food processing company that controls Loblaw. His net worth fell 15 percent this year to $ 7.8 billion, according to the Bloomberg Billionaires Index.
The British side of the clan has preferred to stay so low that their name doesn’t even appear in the online history of Fortnum & Mason, an iconic brand they’ve owned for decades. Their holding company, Wittington Investments Ltd., has a 54.5 percent interest in ABF. The family’s philanthropic arm, the Garfield Weston Foundation, owns 79.2 percent of Wittington, and individual members control the rest. Last year, the charity paid out over £ 88 million in scholarships.
“There is a symbiotic relationship between the company and the charity,” said Philippa Charles, the director of the foundation. “We have to sell a lot of pants, socks and bread to give away more money, and we don’t take that responsibility lightly.”
Representatives from both sides of the family and its businesses declined to comment.
Galen and his wife Hilary followed a lifestyle that could have come out of an episode of ‘The Crown’.
They are friends of Queen Elizabeth II and Prince Philip. When members of the Irish Republican Army made a failed attempt to kidnap Galen in 1983, he played polo with Prince Charles. For decades, he and his Irish-born wife Hilary, a one-time model, held a seat at Fort Belvedere, an 18th-century English mansion that the Crown Estate couple are renting. The couple was so enamored of their place in England that when they developed a luxury Florida residential community they called it Windsor. A Canadian magazine called it a “playground for plutocrats.”
The Westons trace their fortunes until 1882, when 18-year-old George Weston, the American-born son of British immigrants, hung up his student’s apron and started a bakery in Toronto. His son, W. Garfield Weston, expanded to the UK in 1935 and laid the foundation for ABF.
Over the decades, he added household brands such as Twinings tea and Ovaltine, as well as Fortnum & Mason. He established the ownership structure with the foundation in 1958. It supported efforts in education and conservation and helped fund the construction of the Great Court in the British Museum, a large square surrounded by glass and steel. He warned his children that great wealth can both destroy and create, and imbued the clan with an ethos of sincerity, according to a chronicle of the charity.
To this day, the family maintains a practical approach to their businesses. Galen and Hilary’s daughter, Alannah, 48, is the chairman of Selfridges Group, and her younger brother, Galen G. Weston, 47, is chief executive officer of Loblaw and his parent. A cousin, George G. Weston, 56, runs ABF. An outsider, Ewan Venters, is the CEO of Fortnum & Mason and has expanded the brand to include locations in Hong Kong, Heathrow Airport and St. Pancras train station in London.
Located near Piccadilly Circus, Fortnum & Mason’s dining room has long attracted customers eager to sample caviar, foie gras, or Scotch eggs, a deep-fried bun of breaded ground pork with an egg in the middle that some say dates in the store was invented. On June 17, all visitors could try was Fortnum & Mason’s hand rosemary sanitizer. The shop, which was usually full at lunchtime, was relatively quiet.
It was different in a Primark store in Wood Green, a diverse working-class neighborhood in North London. Shoppers waited in line for more than 30 minutes in a scene that was repeated in locations across the UK.
Like another “fast fashion” chain, Inditex SA’s ZaraPrimark takes styles inspired by the catwalks of Milan and other fashion cities and quickly turns them into affordable clothes for the masses. With over 10.3 million followers on Instagram, Primark is driving buzz for new rules with smart social media content.
While Inditex, controlled by Spanish billionaire Amancio Ortega, is investing heavily in its e-commerce capabilities, George G. Weston remains wary of making big changes to what he calls a “once-in-a-hundred -years-event “.
With concerns growing that new outbreaks of the coronavirus are emerging, he may need to revise that attitude in the coming weeks.
“In a Covid-19 world, there is no doubt that retailers with advanced online capabilities are better positioned than those without them, but adding them wouldn’t be easy,” said Morningstar analyst Ioannis Pontikis. “This is indeed one of those big decisions.”
By Edward Robinson and Deirdre Hipwell.