Time Group Profile

Evolution has always been the key to survival, and this is equally applicable in the fiercely competitive world of business. In a dynamic environment, pulsating with new product development and fluctuating markets, companies must be ready to acknowledge that bullish inertia is the one thing that won't keep them ahead of the pack. They must evolve to exploit the conditions - grow a new business arm, sever an outdated head - and always be on the lookout for the opportunity that their competitor has missed.

It must be comforting for the 1,300 staff of the Burnley-based Time Group that their management has opted for this approach rather than simply choosing to 'rock on'.

Faced with hostile market conditions and, in glorious PR speak, a corresponding 'levelling off' of sales, Time has recently made the decision to reposition a significant part of its business and launch The Computer World retail brand.

Consisting of over 150 shops, TCW (is that the first time this abbreviation has been used?) marks a significant step for the firm as it moves gently away from selling own-brand PC 'bundles' and enters the competitive 'add-on and PC peripherals' fray. For the layman this basically means that Time-owned stores will now promote other brands than their own (with an obvious Tiny addition), focusing, for example, on providing products such as Kodak digital cameras, Hewlett Packard printers and Mr Paper's Computer Paper (or whoever makes that sort of thing). Cynics could argue that the group is following the lucrative example of PC World, but that's not a clever thing to say in Time's offices on the beautiful Burnley Riviera.

"We'll be operating in a different arena," contested group marketing manager Brian Trevaskiss, as the sides of his initially upturned mouth 'levelled off'. "They've got a stronghold in out-of-town retail parks and we'll be the only dedicated specialist tackling the high-street market - we see that as something that clearly differentiates us. And besides that, we aim to major on providing a friendly environment and a personal, informed service for our customers. That's something that we think isn't available at PC World."

Claws and associated cat-like noises aside, Trevaskiss and Time are taking a big (and potentially risky) step with their decision to enter the 'more traditional' retail race. But according to our subject, they potentially had little choice:

"We have our eyes wide open on this," he contends. "PC sales have suffered and we know there's probably not going to be a massive increase in the market. We have to wait for the uptake of second and third time buyers, so in the meantime we need that consumable side of the business to keep us going."

His case seems well founded. According to Colin Middlemiss, the group's PR manager, British PC ownership has peaked at around 45 per cent of households, somewhat disappointingly less than the American model of 60 per cent. This means that the computer-literate public now has its fingers caressing an ample amount of keyboards and gleefully inserting its floppies into an adequate number of base units. Its initially wild hunger for new PCs has been satiated, leaving it anxious to exploit the potential of its existing equipment. Thus the demand has switched to peripheral goods and the profits of the manufacturers have gone into free fall (a trend borne out by the demise of Tiny and the fact that last year was the first year in its history that Time failed to record a profit). It was therefore clear to the Burnley boys and girls that Time had to move on.

"I think that we saw the decline in PC sales before the rest of the market did," stressed Trevaskiss. "It was that realisation that led to the decision to start stocking peripheral/consumable products and that was about 18 months ago. That went OK, but not quite as well as it could have gone and that's when we started having a debate about how we could go forward.

"We thought 'Well, would you go out thinking that you could buy these products from Time Computers when the name was so closely associated with our PC brand?' It was at that point that we started to research potential names. We wanted a brand that stated 'we are everything to do with computers, we're not just a PC manufacturer' and we thought The Computer World summed that up pretty well."

Trevaskiss added that the fortuitous arrival of Tiny in the brand stable (following its well-publicised stumble into administration) acted as a further catalyst for the retail reaction, as it provided the opportunity for the new store to immediately offer more than one brand of PC. "It was at that point that we thought we should let everyone know about what we were doing and launch this thing publicly," he explained. "But it would have happened with or without Tiny on board."

Certain industry analysts have speculated that the arrival of Time's arch-rival would prompt wholesale change at the firm, potentially with the merger of both brands into one home-grown market leader. Perhaps they could call it Timy, or Tine. This was an idea that Trevaskiss quickly put paid to with a polite laugh: "I think having two separate brands will give us the opportunity to position them in a way that we like and a way the consumer will like." Explaining this further, he noted, "At the moment, Time is more prominent as a performance brand, whereas Tiny has always been at the 'family value' end of the market. There are differences and I think we can exploit these."

"PC ownership is approaching 50 per cent, but 80 per cent of the ABC demographic are owners. This means that the lower earning households still offer a potential market and they're obviously looking for value. I think we can easily tailor one of our brands to appeal to them - it could be Tiny, or we could develop an offshoot brand. We'll do what we need to to meet that market."

So a further evolution appears to be in the pipeline (they're like the U2 of computers), but not everything is set to change. Trevaskiss is keen to emphasise that the direct sales sides of the operation will continue for both manufacturing brands, although the previous flood of national press advertising support may subside to a more modest flow.

"We're looking into strategy right now," he confided. "But I can say the market probably won't see the same volume of Time and Tiny activity as has been seen in the past. The market isn't necessarily there for straight PC sales, so we might have to look at how we go about attracting that business and maybe be a bit more creative with our media."

But fear not media owners and buyers the cruel wind of change that brings this decreased spend is simply clearing the way for a £10m budget aimed at unleashing The Computer World upon the consumable-addicted masses. The brief is up for grabs and the Time Lords are currently cogitating over which agency has the most compatible operating system.

"We need to stress that we're the only true computer specialist with a high-street presence and so far the agencies seem to understand this. Because of the shift in focus we're also obviously looking for more of a concentrated retail push. We want to get to the stage where we're not driving PC sales via our advertising. What we want to do is create foot-fall to the new stores and, hopefully, it will become self-perpetuating."

It is clear that Time has arrived at a crossroads in its history. They've struck a deal with the devil (well, Tiny anyway) allowing them to secure prime high-street locations, and they've marched off down retail Route 1 in the belief that it leads to the Promised Land. The group is hoping that this diversion will pump up their turnover from the £150 million they amassed last year to an altogether more muscular £300 million within the next 18 months to two years. It's a colossal task and a huge culture shift for an established PC brand champion.

"It is a huge change for us," admitted Trevaskiss earnestly. "The re-branding of the stores in itself is a massive task, which we're trying to do as quickly as possible. We've got a deadline of June, but that date could come and go, as we won't launch nationally until we're completely ready. It's obviously a big cultural change as well, as we shift from a manufacturer that retails to becoming a retailer through and through that also happens to manufacture. We want to be up there with the very best retailers, full stop."

Analysts will be eager to ascertain if this change in strategy proves fruitful for the firm as it adapts to the maturing PC market. Its thoughtful approach to the problem (compared to Tiny's frenzied price cutting reaction) has ensured its survival until now, but not its continued profitability. This is something it is attempting to put right with the high-profile creation of a new Retail World. Will it work? I don't know, but I think Time will tell - at least they should do if we ask them nicely. Keep logging on to find out.