Peter and Christa Peters have had more than 30 years of business and phenomenal growth, here’s why.
This is a dream small business story. It’s the kind of ‘out there’ vision just about all small business owners hope are awaiting them when they open the doors of operation for the first time.
For the Peters, the dream came true and believe it or not, they are so happy with what they’ve got, they don’t want any aspect of their business to change.
In all my years of writing small business success stories, this is the first time I have heard anyone admit to complete satisfaction with their business.
So, what’s this business from heaven? It’s called Peter’s of Kensington and to radio listeners in Sydney, it’s a name most of us have heard, as the shop has been advertised on radio by the most famous media voice in Australia – that of John Laws.
Even if you never heard the ads, using your knowledge of Valvoline and Mortein commercials, that voice announcing, “Go to my good friends at Peter's of Kensington”.
And then let me tell you, the day I went to the shop for this story, the people had come – literally wall-to-wall people – for Peter’s late January sale. Late January sale? Who has a sale in late January?
Well, its not common practice, but Peter and Christa are not common business types, they seem to have developed a business style founded on old-fashioned principles. For example, they close down for a month just after Christmas and that’s why they have a late January sale, but this is typical of their overall approach, which is decidedly unmodern, as the upcoming story will show you.
In 1977, Peter was a bored accountant at a very good Sydney firm (I will avoid boring accountant jokes, but I am not finding it easy!). Christa was an acting Class Eight public servant in the Department of Defence. They were living in the Sydney beachside suburb of Maroubra and Peter decided one day that he wanted to open a shop.
Christa stayed gainfully employed until they were sure the new business would work, while Peter was set to run a gift shop of all sorts. This ‘of sorts’ description will be explained a little later but for now, lets focus on how they selected their shop location.
Defying the rules
Peter says the shop they settled for was on Anzac Parade in Kensington, being the only available between Maroubra and Sydney’s CBD. There was no thought of going to nearby Bondi Junction, a busy shopping nexus. There was no assessment of rivals. And get this, even though Peter was an accountant, there was no business plan!
Like many of us, that old-fashioned drive just to want to be in business meant Peter threw out the door all the sensible business practices you’d expect at least an accountant would have adhered to.
Another common old-fashioned mistake he made was to go into business without money. He admits, “We had $2000 when we started – $1000 for fixtures and fittings and $1000 for stock”.
I know it was 1977, however, $1000 for stock was not a princely sum. To get around the problem of a shop and possible supply of stock, the Peters opted for big and bulky cane baskets which were fashionable in the swinging ‘70s. Anyone who can remember that way back will have visions of cane basket and chairs, bean bags and palm trees.
Palm trees were very popular and Peter cashed in on the trend, selling palm trees like there was no tomorrow. He recalls: “The fella who was bringing the palms was bringing a hundred a day. We were only making a dollar a tree but it was great business.”
Listening to their customers
Asked how the little shop in Sydney’s Kensington, which was not a popular shopping area, did so well, the Peters were not exactly sure, but Peter did point to the 100 or so young girls across the road who worked in the national Panasonic building, saying “these girls got us on our feet”. Christa said they were always going to shower teas, weddings, 21st’s and setting up flats or even homes.
What products did they move into next after they had palmed and basketed Sydney’s eastern and southern suburbs? Christa said they would talk to their customers who would tell them what they wanted: “Our good customers would come into the shop and ask for things like Liadro figurines and the Peters would go off and find the products.”
It sounds old-fashioned to ask customers what they want, but that’s exactly what modern day surveys are all about.
Listening to their customers resulted in another innovation which was a real winner for the business. When an adjoining shop came up for lease, as it was a former milk bar with all the fittings and equipment, the Peters decided to create a coffee lounge in the shop.
At Easter time, as Kensington was close to the showground, the country customers would spend hours in the shop, would always be asking for somewhere to eat or to have a cup of coffee and so another line of business was born. It was also a nice trick to prevent their customers from leaving the building.
No cash flow problems
Did they ever have debt problems in these early days of growth? “No, we didn’t borrow at all. We simply put all the money we made back into buying more stock. We did not even have a car for the first five year,” says Christa, showing her modernity.
I asked whether they went to work by cab? They both laughed, replying “bus!” for obvious reasons, they confess they have never had cash flow problems, which is the number one killer for small business and given what you’ve just read, I think you can work out why.
Nowadays, Peter’s of Kensington stands on a site straddling three wide building sites, has two shopping levels stocked with some of the most exquisite ‘gifts’, both affordable and hard to afford, and an underground car park.
It’s like a mini department store, stocking everything from Bunnykins bowls to Waterford Crystal, from Tag Heuer watches to French perfume. It’s the place to go if you’re looking for gifts, but as Christa has noticed, “People, unlike in the ‘70s, spend more on themselves than on gifts” and given what you can buy at Peter’s of Kensington, our modern day selfishness is somewhat understandable.
How did they grow their business from one shop to two then three and then four before moving into a substantial two-floor building? The plan of ploughing back profits and keeping costs contained were crucial to the expansion of the business.
“Even now, we never take business lunches,” explains Christa.
Peter unashamedly admits to not following his mates who have good businesses and go sailing or play golf a couple of times per week. He insists “the moment you stand back from your business you are not successful”.
Their old work ethos attitude is summed up by Peter’s comment about how he felt when they established the coffee shop within the gift shop. “It was a place we could go for a cup of coffee too ... and we didn’t have to leave the building.”
But they eventually left the building, permanently. In 1998, after a fairly animated discussion with the landlord out on the street, Christa recalls Peter looked pretty hot under the collar, which was out of character. (Peter might have rejected accountancy but he does not placidness of a man who counts money for a living!)
Her observations were right. He stormed into the shop and announced he was going to buy a building and left. Some hours later, he returned and calmly informed Christa, “I’ve got our building”.
Fortune worked in their favour that day as National Panasonic had vacated the building across the road and the landlord was looking for a tenant, not a buyer, but Peter of Kensington was not to be denied.
Within two years, they admit they had outgrown their building! Didn’t the recession of the ‘90s slow them up? Peter says, “We grew stronger during the recession. Between then and now they had acquired two adjoining building sites to create the extraordinary business they have today”.
They have had offers to go public while other business experts would love them to franchise the Peter’s of Kensington operation. But they have said, “We could never do another store justice”. You must see why I argue that the Peters’ business style is unmistakably old-fashioned. They said when it comes to marketing, it simply hasn’t been a case of word of mouth advertising.
No, when it came to getting themselves exposure they were defiantly very modern in 1984 and very astute in establishing a product association with the nation’s number one walking talking advertising personality, John Laws.
How could they afford it? Peter explains, “Well, he was a lot cheaper in those days, but before he started mentioning us, he came to the shop to see us – it’s been a good association. He is a friend.”
The couple admit occasionally they get to work, walk around the store, walk around the coffee shop – which is always full whenever I’m there – and go into their office and as they say “sometimes we have to pinch ourselves”.
Belief in their products
Looking at why it happen all so successfully for the Peter’s of Kensington, you would have to accept that Anzac Parade is an important commuter road for Sydney, so there’s good passing traffic and Kensington always offered good parking facilities.
But it was something that dragged people from all over Sydney and out of the bush to come to Peters. It was clearly good old fashioned service. It was always something else when both Peter and Christa said to me at different times in the interview – “We never stock anything in our store that we would not have in out own home”.
When it comes to a business philosophy, that’s an oldie, but a goody. They believe in the products they are selling. I guess looking at the Peters and their Peter’s of Kensington, as far as small business goes, with apologies to Jack Nicholson, this is as good as it gets.