It takes more than well marketed merchandise to cook up a winning business. Ron Baskin discusses the blend of ingredients at King of Knives with Sarah Stowe.

Behind the 25 year old King of Knives business is an experienced retailer, franchisor – and amateur magician – Ron Baskin.

Ron Baskin has been in retail all his life and has been involved in a variety of brands, from Sunglass World to King of Knives, from Danoz to the Specialty Fashion Group home of labels such as Katies and Millers.

Baskin joined his business partner Maurice Joffee in 1987 and helped build the King of Knives business until in 2004 the company was sold to Retail Cube.

Three years later he bought back the brand and was at the helm again. When we meet in the Sydney head office, in a nondescript light industrial area not too far from the airport, Baskin ushers me into the showroom filled with appealing kitchenware items from the smallest silicone cupcake mould to a hefty set of serious knives. Well known brands include Bismarck, Circulon and Leatherman.

Showing off the broad selection of brands and products lining the showroom walls, Baskin explains that the retail outlets do not just appeal to a female consumer. “These are boys’ toys; knife block sets are massive as gifts – a set of knives is always a big deal.”

Customer choice

Thanks to the Masterchef influence, customers are getting younger, he says. The stores have always catered for the older consumer, now they are as young as 16. The merchandise on offer is tempting too – much of it exclusive to the King of Knives chain.

“This is a massive advantage because you can’t go in to a department store and come out with our goods.”

When it comes to competing stores, Baskin believes there is no other chain catering for the same market. “It’s not lifestyle, it’s kitchenware but also gifts. In the kitchenware business everyone has a niche. Choices are limited because there is very little opposition. House and Matchbox are more about tabletop and crockery. Everything here is in the kitchen. We’re in the food preparation and gift business.”

Selling online

A portfolio mix of both international names and exclusive brands is also a distinguishing factor when it comes to the question of online sales. “The reality is online is getting bigger and no-one will be able to fight it.”

However, King of Knives is investing in its online offer, turning to web experts to build a top class site. “We’re getting an extreme amount of help to make sure it’s top line. The back end too, the process and the delivery. It’s not a cheap operation, and it needs to be maintained – it’s a full time job.”

Right now the website generates sales for the stores, and more importantly, drives traffic to the stores. Baskin’s approach to balancing the bricks and mortar and online elements is to ensure that orders placed through the website are either delivered direct to the consumer, or available for customer pick up from their local store.

Either way, the outlet which is in the customer’s territory is credited for the sale.

A flexible franchise model

Keeping a steady eye on the market and their own business is important for franchisees, who need to alert the franchisor of any problems they can’t handle. Although business assistance could be turned down by the franchisee, it never has been.

“The biggest lesson I’ve learned is that problems can occur very quickly and can come from anywhere, so you need to be prepared and flexible to make quick decisions,” says Baskin. He is extremely confident in the franchise model.

“We’re very lenient as a franchisor,” he says.

There are two specific ways in which King of Knives is a model geared to the franchisee, despite having a high proportion of company-owned stores (out of the 59 Australian outlets, only 13 are franchised).

1. “We are able to achieve the best prices in the marketplace due to our dominance in the category. Franchisees are able to purchase at the same price as negotiated for the company stores and on the same terms.”
2. Franchisees who buy direct from the franchisor’s exclusive brands buy at good margins. “We try and achieve market leading margins for all King of Knives stock.”

While some franchise systems insist on a high level of control over franchisees and their business choices, at King of Knives franchisees are given a high level of autonomy – backed up by franchisor support. Franchisees control their product line up from an approved supplier list, with a swift delivery guaranteed.

“Each store’s merchandise is customised to its client base,” says Baskin.

Add to this the online sales strategy and franchisees appear to be well catered for. “We supply franchisees with what they want,” says Baskin, “We treat our franchisees like gold.”

More about Ron Baskin

• Baskin got into retail straight out of school. He joined a department store in South Africa as a management trainee, and then left to open a sunglasses operation which he sold when he emigrated to Australia. “I started Sunglass World in 1982 then bought into King of Knives. When I sold Sunglass World, which became Sunglass Hut, there were 81 Australian stores and 20 in the US. “Retail Cube Group bought King of Knives in 2004 and I bought it back in 2007.”

  

• As the interview winds to a close, Baskin asks, “Can I show you a magic trick?” Baskin became interested in magic about 15 years ago.”I haven’t met anyone who doesn’t like magic, and occasionally I use it in business. It’s a great ice breaker to say, ‘what if you choose a card and I can guess which one it is?'”