A Strategy for Longevity: Deirdre Kinloch Anderson of Kinloch Anderson

Name: Deirdre Kinloch-Anderson OBE – Kinloch Anderson
Sector: Retail & Manufacturing
Market: Global – based in Scotland
Founded date: 1868

Deirdre Kinloch Anderson married into the family firm. Her husband Douglas is the fifth generation of the Kinloch Anderson family to run the family Highland Dress and Scottish clothing business, which started as a tailor’s shop on Edinburgh’s George Street in 1868. Renowned in the 19th century as Scotland’s premier civilian tailors, they then developed into military tailoring for all the Scottish regiments. In 1903 the Company first supplied the Royal Family – to King Edward VII. In the 1960s they expanded into ladies’ clothing primarily for export, and in 1979 they won the Queen’s Award to Export making 100,000 skirts a year.

The firm now has four divisions: Retail, Manufacturing and Wholesale, Corporate and Brand Development. In the 1980s the Kinloch Anderson Manufacturing Units in Edinburgh and Ayrshire made skirts and other clothing items for many other brands as well as for their own. Today kilts, skirts and specialist clothing items are made in their Edinburgh premises whilst arrangements are in place in Japan, Taiwan, Korea and China for high-end manufacturers to produce Kinloch Anderson merchandise made under licence. Peter Kinloch Anderson, one of Deirdre’s sons, lives in Shanghai as Director of Brand Development for China and the Far East where there are over 300 Kinloch Anderson shops and concessions in department stores and shopping malls.

Issues like control and quality are vital in a licensing arrangement, which makes this a challenging role in a challenging market, but like Deirdre, Peter finds the family name a real business advantage. As she says, “From a sales perspective it’s a huge plus factor to have the name of Kinloch Anderson, but you still have to have the knowledge, you have to earn the respect, and you don’t get that unless you have proved you are able to do the job in your own right.” And she would know: her own involvement in the business began in a sales role, followed by a stint as retail manager, and then she ran the corporate division, and became a director in 1995. And she has clearly loved every minute of it even documenting her insight into the Company in a book entitled “A Scottish Tradition”: “We’re a lifestyle brand, we put our life into it – and we get a fantastic life out of it. The people we meet, the places we go, the travel and the contacts. For example, in Korea we work with another wonderful family business, so it’s a family business working with a family business internationally and that has helped us to proceed successfully and with mutual understanding.”

Deirdre’s daughter-in-law, Jo, handles the media, PR and promotion, and her daughter Claire’s role is in sales and marketing – both are covering for maternity leave. Actually it’s an ideal opportunity for them to spend some time with the Company without a long term commitment in order to make sure it works well for all parties concerned. Her son John is CEO. “The new generation are the best for modern technology. Everything changes so fast. But the stimulus and excitement of change is what motivates the next generation.”

So what is the secret of Kinloch Anderson’s success, both as a business and as a family? From a business perspective, it’s clear that the Company has been able to reinvent itself with each generation, as its approach to manufacturing proves. And that appetite for innovation is still alive and well: the company is exploring the possibilities of online retail, developing a new retail venture with Brooks Brothers in New York, and launching its own whisky range to capitalise on its strong Scottish brand. And all of these decisions have been made for the long term: “If you’re into five or six generations, that sort of legacy leads to longer-term thinking – not just next year or two years’ time. We think more in terms of developing the business, rather than just simply profits. It’s a strategy for longevity.”

As for the family, there are clear definitions of roles, and no-one gets a job they haven’t earned: “We believe we have to be there on the basis of our own ability, not our name. And when we’re in business together we need to work in a business relationship and not as father, son, mother and daughter. Actually we work really well together.”

The shareholding structure is very clear too: even though it’s such an old business, there are very few shareholders. In fact, Douglas’s father bought back many of the shares, to ensure that there would always be a majority shareholder, able to set strategy and make decisions. And the same will happen in the sixth generation, with Deirdre’s son John taking the controlling stake. But because there is clarity about the future, there are very few disagreements: “We don’t really have family squabbles about the business. Most family tensions arise over money – when the shares get spread out over the family who might want to take their money out and then begin squabbling. We’re not going to have that. According to statistics only 1% of UK family businesses are into the sixth generation. So we’re really something special and highly motivated to keep it that way.”