Distinctive Weddings

Thursday 07 May 2009

'Eight weeks ago, the first customer rang up and asked: 'Are you financially solvent? Will you be here by the time our wedding comes around?'. "I was shocked when I got the call, but you just have to answer them and tell them what the situation is."

The frank exchange is a rude awakening from what Oisín O' Reilly imagined back in 2007, when he launched his Wedding Planning business into the height of the Celtic Tiger boom. Back then, weddings were the domain of the superlative -- the biggest, the brashest, the most impressive -- with average spends nudging the €30,000 mark and six-figure bashes dominating the social pages.

Less than three years on, O' Reilly's would-be clients have good reason for caution. Ireland's wedding industry was worth €900m in 2008, by 2010 it's expected to be worth just half of that.

Collapse

The cataclysmic collapse has already claimed hotels and bridal shops. Wedding Planners are the next likely victims, particularly fledgling ones like the business recently set up by O' Reilly and two partners.

"We're further than we thought we'd be despite the recession," he says, embracing the 'Beat the Recession' theme with enthusiasm. "The world changed, so we took our old business plan, threw it out the window and started anew."

The re-invention of O' Reilly's Distinctive Weddings began about 13 months ago, when the company decided to move from the "mid to low" end of the weddings market to the pure "mid" market. The move saw the elimination of budget wedding "packages" in favour of an a la carte menu, which appealed more to higher earners.

The strategy is a direct challenge to the traditional wisdom of lowering prices in a recession, but the youthful O' Reilly insists it's working. "The number of customers we have has fallen by 20pc but our revenue is up 30pc, so we're doing less work for more money," O' Reilly says.

Higher Earners

"We're going after the higher earning professionals now, in their late 20s to early 30s. In that market I don't think demand for Wedding Planners will ever cease [even in a recession]. "They understand that time is money. It takes seven weeks of full-time work to plan a wedding, and they see hiring someone else to do that as simple economics."

Despite the premiumisation of Distinctive Weddings core business, the company is straddling the other side of the economic fault-line too and launched "Bridal Masterclasses" in March. For a "nominal" sum of €20, women can learn everything from how to negotiate with suppliers, to how to ask the right questions to photographers, and how to do their own stationery.

Distinctive gets the door revenue, and also stands to pick up some business from brides who realise that the DIY approach to some areas isn't going to give them the results they desire. "We're hoping to take the courses nationwide within the year," says O' Reilly. "There's going to be a major downturn in the industry and we'd rather be at the front of the trend."

Distinctive has also moved into the events management space, and has recently secured a year-long deal that equals the company's entire turnover in 2008. As well as changing its target market, Distinctive has performed radical surgery on its business operations, starting with cash flow. "Twelve months ago we'd have paid our creditors within seven days; our creditor-days are now pushed out beyond 80," says O' Reilly. "Things are so uncertain that you need a reserve of cash to be able to deal with an emergency if it arises."

At the same time, Distinctive Weddings has moved to get money in from their clients faster, asking them to pay a slightly larger deposit and commit to monthly direct debits, rather than paying a nominal deposit and then paying quarterly.

All of O' Reilly's new customers are also asked to take out "wedding redundancy insurance", a recent arrival to the Irish landscape which covers the cost of a wedding-in-planning if the bride or groom is made redundant, further minimising the risk to Distinctive Weddings.

Then there's cost cutting. With just three full-time and two part-time staff, contracting work is a significant part of Distinctive Weddings operations. "In our early days we'd have been well willing to pay €45 an hour for a virtual secretary. I wouldn't be looking at anybody over €20 an hour now," says O' Reilly.

"It's the same across contractors, there's a real shift in what we're willing to spend and where we're willing to spend it." Distinctive Weddings also takes advantage of "affinity" schemes run by business lobby group ISME, which gives them savings of 60pc on phone bills, and substantial savings across other services.

"We're much more rigorous going back to suppliers who wouldn't fall into those categories and saying any chance you're going to reduce costs?" says O' Reilly. "We've given you this much of a spend over the last two years, would you be prepared to reduce the costs by 10pc over two years and bring it up when things recover. "People are very receptive to it, it's a buyers market, you just need to push."

The company also took a decision to slash its 2009 marketing spend by 75pc, and is now heavily reliant on online marketing and networking. "We get 40pc of our business from referrals," says O' Reilly. "We would know a solicitor and an accountant, if anyone's looking for those, we give them their business cards, if they know anyone looking for a Wedding Planner or Event Manager they give them our cards." The revenue enhancements and cost cuts pushed through by Distinctive Weddings are well and good, but there are still major challenges in the wider market that the company can't control.

"Hotel closures are huge, I'm seeing one a week," says O' Reilly. "More than one colleague has suggested we should be looking at doing due diligence on hotels to make sure that they're in a financially solvent position before we allow a booking to go in."

Swine Flu

Then there's swine flu, which O' Reilly rates as a "bigger challenge than the recession". The Lusk-based company kicked off its "emergency pandemic plan" 10 days ago, and has stocked up on anti-bacterial agents and masks to allow people to continue working.

But if a pandemic led to major gatherings such as a large weddings being banned, then all the masks and bacterial agents in the world couldn't assuage the impact on O' Reilly's enterprise. Despite the not-insignificant challenges, the young entrepreneur remains undeterred.

Eight weeks ago, the caller asked him if he'd still be in business for her wedding, and he ultimately replied 'yes'. But will he still be in business in, say, 10 years? "I hope not," he says. "I set up this business to make a profit, to develop it to a certain level and then bring it to market and sell it on."

- Laura Noonan, Irish Independent