Gadgets galore – and a nice friendly chat with Wendy

Lakeland is cooking up a storm, with profits of £10m. Its secret? Listening to customers. Laura Chesters finds a kitchen Utopia in Windermere

The Lake District's answer to Nigella Lawson, Wendy Miranda, is taking a call from Frank, a customer, who is asking her about what is in the coffee mug she is holding in her photo in the latest Lakeland catalogue.

She takes the call while leafing through a pile of letters sent in from loyal customers with ideas for new products.

Miranda is homeware retailer Lakeland's customer ambassador. Her level of engagement with its customers is quite unlike that of any other retailer. She listens to them, talks to them, takes calls about the holidays they plan and, most importantly, passes on their wants and desires. "I am representing the customers' views at board level," she says.

Lakeland, while probably unknown to anyone who doesn't bake or spend time looking after their household, has a cult following among the house-proud and the kitchen-savvy. Its plastic gadgets and cleaning gizmos are loved by its fans – of which there are many.

Property TV star Kirstie Allsopp describes Lakeland as a "porn shop for those with domestic goddess tendencies".

Whether it is the popular "poachpod" (left) which makes perfect poached eggs, or an over-rack soaking tray, or a cupcake-making machine –Lakeland stocks the must-have items that any self-respecting homemaker and cook needs.

While Miranda is meeting her customers in Lakeland's flagship Windermere store or its adjoining café, 271 miles away in London, the entertainment retail chain HMV is finalising details of a Waterstone's book-store sell-off in a bid to survive; the electrical retailer Kesa is planning to sell its loss-making Comet arm; and Mothercare is closing 110 high-street shops. The contrast with Lakeland couldn't be greater.

Lakeland plans to open new stores – to add to the 54 it already has in Britain. Beside the supermarkets, which have continued to do well, it is one of the few retailers that have managed to turn a healthy profit. Lakeland is coy about its success, but it prides itself on understanding its customers. And this strategy is paying off.

Its latest results filed with Companies House reveal pre-tax profits more than doubled to £10m in 2009, compared with £4.2m the previous year, while turnover increased 5.3 per cent to £141.9m.

The firm was founded by Alan Rayner in the 1960s and started out as Lakeland Plastics – a mail-order business selling agricultural plastics and home freezer-related products. It was a by-product of the Rayner's farming business selling animal feed. Farmers wanted bags to store their meat and bones, and Lakeland's first product – which it still sells today – was the freezer bag. In the 1970s and 1980s, Lakeland blossomed with the advent of microwave cooking; it started to sell products for microwaving and storing, and the rest is history.

The company is run by Alan Rayner's three sons – Sam, 57, the managing director, Julian, 54, in charge of property, marketing and innovation, and Martin, 60, in charge of buying.

Martin Rayner says: "We are quite contrary compared to other retailers. We encourage contact with our customers. We put a big number on the front of our website. We don't hide away. The banks shot themselves in the foot when they stopped taking calls and let people withdraw money from cash machines. They lost the ability to speak to their customers and sell them other products."

Miranda's customer-ambassador role could be the business's not-so-secret secret weapon. "We have been using a customer ambassador for at least 15 years," says Rayner. "Wendy wasn't the first, but people really enjoy talking to her and telling her their views. She has no financial responsibility – she is completely focused on the customer, and reports to Sam directly."

Miranda says: "When I make a decision it affects the catalogue, the buying team, merchandising, it affects everything. But I am allowed to make those decisions. If I want to change the knob on a teapot I can, and I know how to do it. Few retailers allow someone to have my job spec. It just wouldn't exist. Customers often ask – what is our secret? Our secret is that we listen to the customers."

And whether it's complaints about the poachpod (the customer wasn't putting the lid on the pan when using it) or an idea to create a scooper for stews that was better than a ladle (the scrudel) – Lakeland is all ears.

The Windermere head office is like a surreal Utopia – everyone is happy, blissfully surrounded by sheep and countryside, and welcoming. They proudly boast that everyone is home by 5.50pm, everyday.

The buying team is also based in Windermere – unlike many companies, which base their buying teams in big cities. Martin Rayner, the team's boss, says he "loves shopping and travelling the world" looking for new gadgets and gizmos. This year, he has been to Birmingham, Paris, Chicago, Frankfurt, China and Hong Kong.

These days, at the trade shows he visits, the suppliers actually come to Rayner and his team with ideas they have found – a turnaround from a few years ago when Lakeland was just one of hundreds of small businesses vying for time with the suppliers.

But Lakeland's expansion has been slow and steady. In the boom, it did not rush into opening lots of shops and was not swayed into any seemingly good deal that was offered. It only ever opens a shop in a town it wants to be in, and in exactly the right location for the rent it wants to pay. Lakeland is notoriously canny when it comes to negotiating.

New stores are still on the horizon, as is expansion in the Middle East – with a second store set to open in Dubai and another in Muscat, Oman.

But the stores are only one part of the equation. Online and catalogue sales still play a huge part of the business. Rayner says: "At Lakeland, we can offer everything to everybody. If you want to order it from a catalogue and call us and talk to us, you can. Or if you want to go online and you don't want to talk to us, that is fine too. Or you can come into one of our stores."

Kate Calvert, a retail analyst at Seymour Pierce, says: "Lakeland are nice and quirky and innovative. They have done well in helping people by making things easier with the products they sell. Some of their things can be found cheaper elsewhere, but people shop there because of the overall experience. The catalogue, online and the shops is a good easy way for people to choose how to buy. You can flick through the catalogue while watching Coronation Street, then order online afterwards. They have a good niche."

Lakeland has benefited from the trend for celebrity chefs, home cooking and the fact that in recession people are spending on small improvements to their homes rather than big purchases. But Miranda, the Rayners, and the team don't think the business's success is temporary. Miranda says: "We sell products that make everyday life easier. This isn't a fad."

A lot of speculative investors would agree. Lakeland has been courted many times by private equity, and rival retailers have been consistently knocking on its door, hoping the brothers might think it is a good time to make an exit.

But Martin Rayner is adamant that Lakeland will stay a family business. "It is not just our family but the family of the people working here. It is part of our culture. We have lots of approaches but family is what we are about."

Lakeland's customers see it this way, too. Miranda says: "I get handwritten letters and poems – poems two pages long – what an accolade. People trust us and tell us what they think. We get Christmas cards. Our customers think of us as part of their family sometimes."

At the end of the tour of head office, Miranda says she is off to meet a customer in the café who is visiting with her daughters, for a treat on her 90th birthday. And that, perhaps, is the greatest accolade of all.