Chris Tiso has kept the ethos of his family business alive after teaming up with a stock market giant to secure its future, finds BQ editor Peter Ranscombe.
Climbing the stairs of the head office of Tiso at Leith in Edinburgh is like stepping back through time. On the walls, photographs record the outdoor clothing and equipment retailer’s achievements, from stores opening through to taxis carrying its livery. At the top of the stairs, a cabinet displays some of the family’s historic climbing equipment. It’s a sharp contrast to the shop that occupies the ground floor of the head office.
Customers are greeted with a broad range of bright and modern equipment, from jackets and boots through to tents and camping stoves. Whether you want specialist gear to tackle a Munro or just a new pair of shoelaces for your approach shoes, the store’s staff know each and every product inside and out and are ready to offer the legendary levels of advice that have come to define Tiso’s shops and set them apart from their competitors.
That contrast between the old and the new feels like it’s at the very heart of chief executive Chris Tiso’s business. The company was founded in 1962 by Graham and Maude, Chris’s mother and father, in the back room of a boat shop on Dundas Street in Edinburgh before moving to its own premises later that year on Rodney Street.
By the time it celebrated its 50th anniversary as a family business, Tiso had grown to encompass 16 stores throughout Scotland and the north of England, with around 300 staff working for the core business and its sister brands Alpine Bikes, Blues ski shop and fellow outdoor specialist George Fisher in the Lake District.
Then in November 2013 a controlling stake in the company was sold to Bury-based JD Sports Fashion, the FTSE 250 listed company that owns outlets including JD, Scott and Size and which had bought outdoor chains Blacks and Millets out of administration in January 2012.
Tiso’s sale of a controlling interest came as a surprise to many in the Scottish business community and sparked fears that the brand and the levels of service for which its staff were famous would be eaten up by the stock market giant.
Jump forward two years and those concerns haven’t come to pass. Tiso is still a formidable presence on many Scottish high streets and retail parks and it all appears to be business as usual. So how has Chris managed to retain the ethos of a family business after becoming part of a much bigger operation?
“It’s difficult to put your finger on what makes something special – but this business is special,” he explains. “Our customers feel that, our suppliers feel that and the people who work here feel that. It’s slightly intangible because it’s made up of so many different things, but it could be summarised by saying ‘We are a Scottish family business’ and we felt it was important to our suppliers and our customers and our team that we continued to operate on that basis – but just with a big, rich, elder brother down in Bury.
“I know that was important to JD too. Peter Cowgill, JD’s executive chairman, could see and identify with the values and the DNA of Tiso and he was keen to see that preserved too. Frankly, I don’t think the deal would have been done if there hadn’t been a meeting of minds.”
That meeting of minds came against the backdrop of seismic shifts in the outdoor retail market, with companies such as stock market-listed Blacks Leisure and its Millets subsidiary falling into the hands of administrators after struggling against increased competition. Online sales also sent shockwaves through the industry, as a younger generation of customers emerged.
“The outdoor retail landscape has changed beyond all recognition in the past ten years,” explains Chris. “I’ve been sitting in this chair for 22 years. So I’ve seen it go through phenomenal change in my adult lifetime, but none more so than in the past decade.
“Ten years ago, very clear polarisation took place in the market, but what’s followed on from that is the market becoming more crowded and fiercely competitive, leading to some very aggressive discounting – which is inevitable in a market that’s over-supplied – and that in turn has led to consolidation. There came a point where I had to choose whether I was going to be a part of that or not. If I’d chosen to continue to go it alone then I would have had to accept the risks that would have come with that – consolidation would have continued around us and eventually we would have been squeezed out or not able to do a deal on our own terms because we would have run out of options and time. I didn’t want that to happen to this business on my watch.
“So we brought in KPMG Corporate Finance to help us find a strategic partner and we looked at a number of options – including venture capital and private equity – but I didn’t feel they were right for us. An introduction to JD was effected. They had already bought Blacks and Millets out of administration, which I thought demonstrated an enormous commitment to outdoor, and that gave us confidence and reassurance that they were taking a strategic approach. I met with Peter Cowgill and we established an immediate rapport. We quickly determined that there was a deal to be done and actually it was pretty straight forward.”
While Tiso has firmly planted its flag at the premium end of the market, Millets and – latterly – Blacks had been operating in the high-volume space. Yet Chris saw this as an advantage. “It would be fair to say JD was looking for a high-end business,” he explains.
“You need fascias that are strategically placed within the marketplace to complement each other and not compete with each other. It’s not fair to look at how Blacks and Millets were being run or performing prior to JD’s ownership because I think that business had been in terminal decline and indeed it probably went to the best home. I think JD has taken a very responsible approach to working through the turnaround of Blacks and Millets, which is now very much well underway.
“JD is very open and honest about its lack of experience in the outdoor space. We share information all the time. I spend a fair amount of time down in Bury with its senior team.
“Part of the attraction wasn’t just that JD is a profitable multinational company with sales north of a £bn – which obviously brought us financial security and recapitalised the business – but that it also values our combined knowledge and experience.
“JD saw the value in that and we saw that it had a phenomenal well of resources that we could tap into in terms of IT, multichannel and harmonising terms with Blacks and Millets.”
JD Sports Fashion was founded in Bury, near Manchester, in 1981 and listed on the stock market in 1996. The company, which has been led by Cowgill since 2004, has grown to include nearly 18,000 staff working at more than 800 shops, and in April 2015 headline profit broke through the £100m barrier for the first time.
The company may be listed on the stock market but an important part of its story also involves a family business. Pentland Group bought a 57% stake in JD in 2005, giving it a controlling interest in the company. Pentland is a London-based global brand management firm that owns sports labels including Berghaus, Mitre and Speedo. The business started life in 1932 as The Liverpool Shoe Company and was floated on the stock market in 1964 by founders Berko and Minnie Rubin and their son, Stephen.
The turning point for the group came in 1991 when it sold its stake in Reebok for US$770m, ten times what it had paid for the shares in 1981. Stephen and his family took Pentland private again in 1999.
Making a success of the link-up with such a large company is certainly a feather in Chris’s cap. But then again overcoming challenges is nothing new to him. After attending The Edinburgh Academy and then Rannoch School – a private institution on the banks of Loch Rannoch in Highland Perthshire that included large elements of educationalist Kurt Hahn’s outward-bound philosophy and which closed in 2002 – Chris spent a year working on charter boats in the Caribbean before starting a degree in maritime business and law at what is now Plymouth University.
“To put it bluntly, I didn’t engage with the course,” laughs Chris. “Perhaps the course wasn’t what I expected or perhaps a year spent sailing on the high seas made classrooms in Plymouth seem a bit dull or bland by comparison, but I came back up to Edinburgh, quite frankly at a loss for what I was going to do next.”
Chris drifted into the family business, working first for six months as a sales assistant in the busy Rose Street branch in Edinburgh before spending another six months as a floor manager at the Buchanan Street store in Glasgow.
“So I’d completed a year of retail training when my father died and everything changed,” he reflects. Graham was killed in a boating accident in the Caribbean in 1992, which thrust the then 21-year-old Chris into the limelight. “At that point my mother came back into the business as the chairman, with a fairly light touch on the tiller,” he explains. “Looking back, it was quite interesting to see just how much confidence she must have had to allow me to be there with my hands on the wheel aged 21 and with absolutely no relevant experience, knowledge or qualifications. So I really have learned on the job.
“I had returned to Edinburgh in 1991 with nothing else obvious presenting itself and had gravitated towards the family business. I think perhaps there had been an underlying interest there that I hadn’t fully embraced – or perhaps hadn’t acknowledged – because I did find myself drawn towards it in almost a subconscious way. It wasn’t a conscious decision – I didn’t suddenly say ‘I’m going to join the family business and this is going to be my career path for the next 20 years’.”
By stepping up to the responsibility of running the family business, Chris had big shoes to fill. Birmingham-born Graham had been a salesman for Cadbury in Scotland and had fallen in love with the country and with the outdoors. He and Maude wanted to run their own company and identified a gap in the market for quality clothing and equipment. They swapped their Turner kit car for a van so they could bring back specialist climbing and skiing stock from Europe to sell in their fledgling Edinburgh shop. Early supporters included Sir Chris Bonington, who Graham helped to prepare for his Everest expedition in 1972.
“My father had a tremendous eye for product and was commercially very astute,” Chris remembers. “I don’t think he was necessarily the best leader though because he relied too much on a culture of fear, which can work up to an extent but doesn’t necessarily bring out the best in people.
“So I adopted a very different approach to communication and encouraged people to have a view and not be afraid to express it. I was more inclined to give people responsibility so they had a sense of ownership – in some cases that worked and in some cases that didn’t.”
Chris recognises three distinct phases in Tiso’s growth. Initially when he took over the business, organic growth came one store at a time through opportunities rather than a set expansion strategy. “That started to change, as much as anything, because I’m impatient and I have a restless spirit,” laughs Chris. “I get bored quickly. I was always wanting to be on to the next challenge and doing something new and bigger and better. Initially it was opportunity-led, and then that gave way to my personal ambition becoming the driver.
“As the business became bigger and more sophisticated and I became more experienced then it became more strategic. So there were three distinct drivers to growth – being opportunity-led, then my personal ambition, and finally the more strategic approach.”
That strategic approach brought with it the acquisitions of Alpine Bikes, outdoor specialist George Fisher and the Blues ski shop. From the six shops that made up the chain when Chris took over the business, Tiso has expanded to 17 branches today, with JD shelling out £2m for its 60% stake in 2013 and paying off £5.3m of debt.
Yet just weeks after the deal was unveiled, tragedy again struck the Tiso family. Chris’s elder brother, Donald, who had served as a director of the company for 22 years, died in a climbing accident on Ben Starav near Oban in January 2014. “As a family, we’ve had our fair share of tragedy,” says Chris, who had earlier lost another brother. “My mother always has been and remains my inspiration. She would be anyway, but not least because she remains so positive and optimistic despite losing two sons, which as a father of two children myself is just incomprehensible.
"Donald was a very quiet man, very considered and understated, but widely respected. He preferred to be in the background – that suited his personality – but he was an enormous source of strength for me and at various different times over the course of the past 20 years when we’ve been through some very challenging periods he always gave me tremendous support and wise counsel.”
Despite his family’s tragedies, Chris certainly still has a sense of adventure. He has participated in and led expeditions to the Arctic, Antarctic, South America and even Mount Everest. Nowadays, he enjoys camping, sailing and skiing with his ten-year-old son and eight-year-old daughter, as well as running around Arthur’s Seat in Edinburgh when he can.
He’s also looking to inspire the next generation of outdoor enthusiasts after being elected as honorary president of Scouts Scotland, a position he took up in November 2014. “An old friend who had been involved in Scouting for donkey’s years called me up and we had a coffee and he asked me if I’d be willing to have my name put forward for election – recklessly I said yes,” he laughs.
“Joking aside, I was hugely honoured to be asked and hugely honoured to be elected. It’s a terrific movement. It’s as relevant today as ever and it gives a huge number of children the opportunity to do a range of outdoor activities. It opens up a whole new world for them. What’s not to like about that?
“The official bit is presiding over the annual general meeting, but I also get asked to give speeches and present awards, which is a huge privilege and I thoroughly enjoy it. I’m slowly also making my own expeditions around Scotland to meet different Scout Groups and attend camps. I will continue to do as much as I possibly can to support them.
“I wasn’t a Scout at school – boarding school didn’t leave much room for activities like that, although we did take part in the Duke of Edinburgh Awards scheme, bronze, silver and gold. I was lucky enough to go to a school that embodied the essence of many of the same values as the Scouting Movement, such as serving your community and enjoying the outdoors.”
The passion that has taken Chris on adventures around the world is still burning bright. “I’m really lucky because I get to do a job in which I spend every day working with and talking to people who share my love, passion and interest for the outdoors,” he says. “We get to handle product, which is exciting. It’s not detracted in any way shape or form from my interest in the outdoors – it’s simply an extension of it.”