The back story of T2
"The story of T2’s success is a lesson in how to turn a high volume, old-fashioned supermarket product into a boutique operation, where customers are willing to pay more to treat themselves with a feel-good experience."
Sydney Morning Herald
Today's 'tourist' excursion was to Doncaster Shopping Town - well the weather was pretty ordinary and our guests wanted to do some food shopping as they are going to cook for us this evening. Thank you James and Fiona. Well Doncaster is pretty upmarket, and one of the shops there is T2 - a glamorous tea shop which I thought was Australian, and since it is really a rather different kind of shop I thought I would do a post on it. An Australian success story, thought I and very suitable for the blog, having shown it off to our overseas visitors. And it is - sort of. But there were lots of twists and turns to the story I discovered as I read about it. I learnt most from two articles in the Australian Financial Review, supplemented by various other little things I found here and there. The first AFR article was Maryanne Shearer's story, the second Jan O'Connor's. (All will be explained.) Maryanne is on the left and Jan on the right.
The story begins in Brunswick Street, Fitzroy where these two ladies - decided they would go into business together. First of all they tried homewares, but it died a death. Then they had the brainwave of tea - everyone was doing coffee - it was the beginning of Melbourne's coffee boom (1996) so they thought they would do tea. The design was very different, elements of which are still retained today. for the design of the shops is one of the things that makes them so distinctive. The pink and the black still feature strongly and maybe the Chinese newspapers too, although I'm not sure about that.
If you read about it today, you will learn that the founder was Maryanne Shearer and she had an unnamed business partner. In fact Jan O'Connor is rarely mentioned, although I gather that newspapers of the day (1996) credited her with most of the design ideas, and maybe even the initial idea. Whoever it was, the two stumbled along - they stumbled because neither of them were particularly good at finance and they had cash flow problems. Eventually Maryanne Shearer's now husband Bruce Crome stepped in and provided finance. Now I don't understand finance myself, but it seems that there was an acrimonious dispute about who owed who and who had to repay what and by when, with the end result of it all being that Jan O'Connor was bought out by the other two in 2001. I suspect it's not a pretty story really and from that time O'Connor is rarely mentioned as other than 'a business partner.' I think she now has another business but is still rather bitter about it all.
For in 2013 Maryanne Shearer and now husband sold the company to Unilever - massive global company and Britain's largest tea company, for an undisclosed sum, but believed to be somewhere between AUD$57-80 million. Shearer stayed on as Managing director for a while but left in 2015. I'm not sure what she does now. Maybe she just spends her money.
Well she has written a book about T2 - the story, how to drink tea, recipes, etc. It's very glossy and I think you can get it in their stores.
So a bit of a saga really, and I forgot to mention that they actually sold half of the company to somebody else in 2007 before the sale to Unilever, but this was unsuccessful and they bought back 25% of it. I would not like to pass judgement on what actually happened. There are always two sides to every dispute, but it was certainly not a friendly parting of the ways between the two ladies. That much is certainly true.
Unilever has apparently done well out of the whole thing and the last figures I saw said that there were now 65 stores in Australia, New Zealand, the UK and USA - all in trendy places. And of course they have plans to expand further and also into tea related products such as biscuits.
I must say I like their stores - they are visually very appealing. In the words of Maryanne Shearer:
"we needed to create a visual experience so when the customer walks in they smell it, they taste it, they look at it.’’
And this is indeed what you get. The first thing you are confronted with is a table laden with small bowls of tea leaves and a whole lot of ancillary products. You can pick up the leaves and smell, you can taste a small selection of their teas and you can then explore the shelves.
Then there are the products they sell - the beautiful teapots and cups and other stuff for making tea. They are good places to go at Christmas - lots of nifty ideas - and luxury tea, beautifully but simply packaged.
For the tea is expensive. I am not a tea drinker and so I have not ever bought any tea for us, but I have bought it as presents at Christmas, and I am tempted sometimes by all those beautiful looking tea leaf mixtures in the bowls. Their website will give you the full rundown of their over 200 teas. But I do think that they have been very influential. For almost parallel to the massive growth in coffee in Australia there has been a huge growth in tea sales. Well I don't have statistics for this but going on the massive range in the supermarkets, and the increasingly large selection in cafés I can only assume that the tea market has grown too. No other company has managed to compete with T2 at the luxury end of the market though.
A last, slightly negative note. I also found a website that allowed people to comment on their experience working at various companies and I found one for T2 since the sale to Unilever. An almost unanimously negative experience it seems. Long hours, no rewards but targets and sales spiel they felt guilty about. But again - this is personal and people are more likely to complain than praise aren't they?
Anyway - all very interesting.
