The Burton Group plc

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The Burton Group plc

214 Oxford Street
London WIN 9DF
United Kingdom
(071) 636 8040

Public Company
Incorporated: 1917 as Montague Burton Limited
Employees: 38,054
Sales: £1.80 billion (US$3.37 billion)
Stock Exchange: London

The Burton Group consists of 12 companies. In 1990 the group owned 450 shops carrying clothing for both sexes. Different component firms in the group target various sectors within the market. Debenhams, for example, of which there are now 85 stores, offers clothing and housewares for the whole family.

It was at the beginning of the 20th century that the foundations of the Burton Group were laid. In 1900 the 15-year-old Meshe David Osinsky joined the thousands of Jews fleeing westward from Russian persecution. Osinsky evidently opened his first store in Holywell Street, Chesterfield, England, in 1904. The merchandise offered for sale consisted of cheap ready-made suits for men and boys’ wear under the name Burton. Men’s suits “noted for hard wear and perfect fit,” to quote a contemporary advertisement, were offered from eleven shillings and ninepence, boys’ suits “in endless variety” for one shilling and ninepence, caps at one penny, and shirts of emerald green flannel with yellow stripes were sold to Irish farm workers. Advertisements also solicited orders for bespoke— made to order—suits. In 1908 a second Burton shop was opened in Mansfield and in 1909 a third in Sheffield. Also in 1909 Osinsky, who was to change his name to Montague Burton, married Sophia Marks, daughter of a furniture dealer.

In the same year Osinsky also established the Progress Mills works in Leeds, setting up Elmwood Mills and the headquarters of the firm there in 1910. Between 1910 and the outbreak of World War I, 14 branches of the firm were created, mainly in the industrial towns of the Midlands and the North East. The number of branches had grown to 40 by 1919, including eight shops in Ireland. These were all to be stocked with clothing. There was also the mounting task of meeting the demand for uniforms, which the firm was under contract to supply, all this with a constantly changing labor force as men joined the war effort and were replaced by women. By the end of the war Elmwood Mills occupied five premises in Leeds, and the labor force had grown from 56 in 1914 to 500. Production was divided between civilian needs and contract requirements, which posed a problem. The firm had either to shelve half its productive capacity or expand the number of retail outlets. It chose the latter, and the number of shops grew from 40 in 1919 to 140 by 1922.

Rapidity of growth was accompanied by change in status: the company, Montague Burton Ltd., adopted limited liability in 1917 with a share capital of £5,002 increasing to £47,002 by 1924, all the shares but one—which belonged to Mrs. Burton—being held by Montague Burton. The firm by this time made almost entirely wholesale bespoke clothing, with the customer being measured in the branch shop and his requirements sent for translation into the appropriate garment. The advantage of the wholesale bespoke system to the customer was that he got exactly what he had ordered to suit his size and personal preferences, instead of the approximation he would be likely to get by buying ready-made. The benefits to the producer were not having to finance stocks of ready-made clothing for his customers to choose from and cutting out intermediaries. The success of the system lay in the speed with which the customer’s order could be processed. This required organizational ability of a high degree and was of crucial importance in this highly competitive business. To this end, production was centralized at Hudson Road Mills, on a site offering plenty of scope for expansion, the first stage being opened in 1921.

The main force behind the move to the new factory was the growth in retail trade. Whatever the state of the national economy, there was no year between the wars in which the number of Burton shops failed to grow. From 140 in 1922, the number had more than doubled to reach 291 by 1929 and doubled again by 1939. The early increase in the number of shops was in the older industrial areas of the country such as the West Riding of Yorkshire, Lancashire, the Midlands, and North East, accounting for 80% in 1919, but this had fallen by 1939 to 50%. This diversification of outlets was behind the firm’s remarkable record. The shops themselves set new standards of excellence, reflected in the expenditure on fixtures and fittings. From 1917 to 1939 the average amount spent on these items rose from £123 to £1,834. The 1925 publication Goodwill in Industry, by J. Foster Fraser, produced to mark the years that the firm had been in business, contained the following description: “Every Montague Burton shop has the same outward appearance, both in its window dressing and in the name of the firm uniformly presented in bronze lettering on the marble. The exterior stonework is always of emerald pearl granite with shafts of Scotch grey granite. The interior fittings of oak and gun-metal quiet and dignified are the same at every branch.” This impression of quiet dignity was emphasized by the reception accorded to the customer. Each Burton shop received an instruction manual containing the following advice: “Impress on staff (a) to offer customer a chair and an invitation to be seated (b) to greet customer with a cheerful ‘Good morning’ entering (or Good evening) (c) to wish the customer a pleasant ‘Good day’ when departing. The prefix ‘Sir’ after ‘Good morning’ or similar conversational courtesies appeals to the average man whether your intellectual, social, economical superior or inferior. Make your customer feel he is welcome and that you are anxious to please him. Avoid the severe style of the income tax collector and the smooth tongue of the fortune teller. Cultivate the dignified style of the ‘Quaker tea blender’ which is the happy medium.”

The care and attention paid to the running of the branches was matched by that shown to the work force, and the new factory building at Hudson Road facilitated this. Here it was possible to provide a fully equipped canteen for two thousand, serving a midday meal costing between four and ten pence, together with comprehensive welfare services. The motivation behind this provision was rooted in the belief that productivity and contentment of the work force were positively related.

When the new canteen was opened by the Princess Royal in 1934 it seated 8,000 workers, indicating the firm’s growth. In 1929 the company became a public limited liability company with a capital of £4 million, having been a limited liability company since 1917. Montague Burton was knighted in 1931. For the rest of the 1930s the story was one of uninterrupted expansion. The number of shops had reached 595 by the outbreak of World War II. The success of retailing brought pressure on the making-up departments at Hudson Road, which produced the ready-to-wear suits, and there was a shortage of female labor, which Burton’s own success had helped to create. At first the labor surpluses of the Yorkshire coalfield area were tapped and female workers were bused in from places such as Castleford and Normanton. This source of labor proved inadequate, however, and the firm sought relief in the blighted cotton towns of Lancashire. Three factories were opened in the 1930s, including a custom-built one at Burtonville on the East Lancashire highway. Between them they employed 6,000 workers in addition to the 10,600 employed at Hudson Road.

The decade witnessed the beginnings of a move away from wholesale bespoke tailoring, which had been the mainstay of the firm’s output, to the ready-made suit. According to The Outfitter, March 26, 1938: “Montague Burton’s are to make a definite and strenuous effort to popularise the ready to wear lounge suits throughout the British Isles. Some of the larger branches have always carried made-up suits, now a ready-to-wear department is to be part of every shop. For the first time a ready-made lounge suit is illustrated in the general spring catalogue issued from all branches. … the main branch in Tottenham Court Road, London Wl is the largest of its kind in Britain. Over 2,000 garments are always in stock in 250 different fittings.”

Change of this kind carried revolutionary implications that were far from complete by the outbreak of World War II. The firm threw itself wholeheartedly into the war effort. The float representing Burton at the London victory parade of June 6, 1946, bore the proud inscription “13,642,169 Garments For The Fighting Services,” and the importance attached to the factory by the Germans is illustrated by a map discovered in German archives, pinpointing it as a Luftwaffe target. Wartime shortages of materials, the disruption of the labor force in response to the demands of the armed forces, and clothes rationing continued into peacetime. Not until 1950 did the chairman’s annual report to the shareholders refer to improved stocks commensurate with prewar standards. The unfortunate outcome of a policy of buying in stocks of raw material on such a scale in a rising market due to extraneous circumstances was revealed when those prices suddenly fell. In Burton’s case it meant writing off stocks to the value of £1 million. This was followed in September 1952 by the sudden death of Sir Montague Burton.

Measured in terms of turnover the £19.5 million that the firm achieved in 1953 had grown to almost £42 million by 1964. By 1990 this figure had been eclipsed by a turnover just short of £2 billion. Growth statistics, however impressive, conceal fundamental changes in the structure, organization, and purpose of the firm. By 1991 it had shed all its cloth and clothing manufacturing activities. The Hudson Road factory, which once housed thousands of workers, became a distribution center with the vast floor spaces carved up into smaller rooms. The Lancashire factories are gone, the one at Burtonville was demolished, and the two at Goole and Doncaster, acquired since the war, were vacated. The business has become more diversified, ceasing to serve men only, with more than half its sales to women. The shops cater to different sectors of the market and carry a comprehensive stock of clothing. They consist of Burton Retail, Dorothy Perkins, Top Man, Top Shop, Evans, Debenhams, Principles for Men, and Principles for Women. All stores comprise The Burton Group.

The long march to achieve this position started in 1953 when Burton acquired the firm Jackson the Tailor, thereby seeking to strengthen the management by acquiring the services of Sidney and Lionel Jacobson, directors of the company Weaver to Wearer Ltd., who had built a reputation of successful trading and who became directors of Burton in 1953. It was due to them that the firm divested itself of its clothmaking activities. The acquisition of the Peter Robinson shops, which by 1967 had grown in number to 39, predated the arrival of the Jacobsons by six years and heralded the movement of the firm into the women’s side of the market. A new departure was the introduction of credit facilities for customers in November 1958 to make the firm more competitive. In 1963 Burton set up in business in France, anticipating Britain’s entry into the European Common Market by ten years. This was one strategy open to a firm that had saturated the home market. Ultimately it was a failure, notwithstanding the acquisition of the St. Remy company with 35 shops, which made Burtons one of the largest specialty clothing firms in France and which was finally sold in 1981.

Another venture that the firm tried was mail order. It was announced in 1964 that after much detailed organization and planning, the firm was ready to go ahead with the newly created Burton-by-Post venture. This was unprofitable and was sold in 1970. In spite of these schemes, aimed at diversifying the company’s outlets and products, it remained dependent on sales of men’s tailored clothing. With the exception of the small chain of women’s shops doing business as Peter Robinson and the prestigious general outfitters Browns of Chester, the only women’s clothing outlets were the Burton shops, hence the move into the women’s trade with the purchase of Evans Outsizes in 1971. Sometimes the search for diversity could lead the firm in unaccustomed directions, as with the acquisition of Ryman’s chain of shops specializing in office equipment, with a separate drawing office. This venture ended in 1981.

Another example of the search for diversity, announced by Ladislas Rice on joining the firm in 1969, was the purchase of Greens Leisure Centre with 41 branches specializing in photographic equipment. This was never a profitable enterprise and was disposed of in 1976. A venture more closely related to Burton’s primary business was an attempt to break into the children’s market with the establishment of the Orange Hand Shops. This development lasted just four years, and in 1976 the company decided that it could no longer justify further investment in the endeavor as it was unprofitable.

In January 1972 the chairman’s report, having declared its intentions to become known as a group in 1969, announced: ’Our company is now on the way to becoming a group of specialist retail chains each with a clearly defined market and a distinctive face to the public …. We intend to maintain and develop our dominant position in the mens wear market. However, we shall become less completely dependent on it as our newer retailing activities grow.”

In conjunction with this strategy, Burton discontinued manufacturing on grounds of cost. The rationale of the process—probably the most important in its history—was outlined by Ralph Halpern (later Sir Ralph) in his chairman’s report of December 1981. After detailing the reasons why Burton had fallen behind the British clothing retailers in general, he outlined measures to retrieve the situation. First was the curtailing of the company’s manufacturing activity. Second was the application to other company chains of retailing methods evolved by the Top Shop sector, and third was the shedding of all the loss-making activities.

Draconian measures saw Burton emerge with its sights set on retail selling with different divisions specializing in different market areas. Two new chains of shops were added, Principles for Women in 1984 and Principles for Men in 1985, specializing in high-quality clothing, and Debenhams’s chain of 67 stores and the shops of John Collier were acquired. The parent company changed its name to The Burton Group plc in 1985. Principles for Women and Principles for Men merged to become Principles in 1990. November 1990 saw the retirement of Sir Ralph Halpern, the man who had transformed the firm of Burton almost beyond recognition. The company continues to develop new retailing initiatives.

Principal Subsidiaries

Burton BV (Netherlands); Burton Capital BV (Netherlands); Burton Fashion Holdings Ltd.; Collier Holdings Ltd.; Debenhams plc; Montague Burton Property Investments Ltd.