How Cath Kidston turned a ‘glorified junk shop’ into a £250m empire

The past 20 years has seen Cath Kidston go from a one-off junk shop to one of Britain’s fastest growing retailers valued at £250million. So how did one woman turn roses into riches?

Designer Catherine Kidston has come a long way. Twenty years ago she used to make customers at her Holland Park junk shop cups of tea – last week she opened a 7,000 square foot flagship store in London’s Piccadilly. The first 180 loyal fans weren’t made a cupper, but were rewarded with £180 worth of shopping vouchers instead.

In prime position next to Fortnum & Mason, the new Cath Kidston department store sells 20,000 product lines displaying Kidston’s distinctive patterns. Other services include a bespoke furniture upholstery service.

The glitzy opening saw flower power and polka dot devotees queue for hours while branded London taxis drove out of a giant Christmas present to signal the store’s opening.

A view of the Cath Kidston store in Shelton Street, Covent Garden, London.

Building the brand

Kidston initially trained as an interior designer under the society decorator Nicky Haslam before branching out on her own. After recovering from breast cancer in her 30s, Kidston opened her first shop in Holland Park, West London, in 1994.

With a start-up budget of £15,000 she switched her attentions from interior design to retail and sold hand-embroidered tea-towels and brightly coloured renovated furniture. Although she described it as a "glorified junk shop", the outlet was a big hit with the yummy mummies of upmarket Holland Park.

When a mistake with an order left her with more duvet covers than she could sell, Kidston transformed the surplus material into cushions, washbags and padded coathangers. This turned into Kidston’s first full collection.

To widen distribution, she started exhibiting at trade fairs and the brand started being sold in other stores. Wider recognition and press attention followed and the brand became known for floral designs as well as “spot and star” and novelty prints including the now-famous cowboy.

By 1999 Kidston had stores in Chelsea, Fulham, Wimbledon and Marylebone. The company grew quickly – offers of brand collaborations (including Millets, Nokia and Roberts), licensing deals and overseas partnerships flooded in and the first round of private investment helped fund further expansion.

Kitchenware products are put on show at the Cath Kidston head office in London

Expanding overseas

It’s not just the UK’s middle classes who love Kidston kitsch – the brand has taken Asia by storm too. In 2006 the company opened its first store in Tokyo, Japan, which saw queues round the block from the beginning. Stores in Taiwan, Thailand, Hong Kong and Korea soon followed.

In 2010 Kidston sold a 60% stake of the company to private equity investors TA Associates. She retained a minority stake and remained as the company's creative director while a new CEO and chairman were brought onboard. The same year saw Kidston awarded an MBE for “services to business” in the New Year’s Honours List.

Currently there are 61 Cath Kidston stores in the UK and 75 overseas, including a store which opened in Shanghai last month. The brand’s stayed true to Kidston’s original vision: “To create practical, everyday useful things that make you smile.”

Bags are put on show at the Cath Kidston head office in London

Making it big

Targeting an affordable yet aspirational market, the designs have moved from a cult to a more popular following. Its best-selling item is a £50 red-spotted day bag – it sells four of these every five minutes in the UK as well as six mugs every two minutes.

But it was the equity investment from TA that allowed the company push forward with expansion plans. The year before TA took control, Cath Kidston's turnover stood at £31million and the store count at 27. Sales passed the £100million mark for the first time in March this year, growing 19% to £105million.

TA Associates is now planning to put it up for sale in the new year with a price tag as high as £250million. The private equity firm called in investment bank UBS last week to explore options for the company which could see Kidston, 55, earn £50million from any deal.

In a statement, the company said: "Cath Kidston is growing rapidly and has exciting plans to capitalise on the international appeal of its brand. In these circumstances it is prudent that the company and its owners should carefully assess the options available to take the company through the next stage in its evolution and UBS has been appointed to help."

The sale’s expected to attract interest from dozens of private equity firms and wealth funds as well as pension funds and other retailers.

More of Kidston’s business story can be read in Coming Up Roses, a book published by Quadrille, in which Kidston offers an insight into what it takes to build a successful brand.