The new chief executive of LK Bennett, Darren Topp, needs to focus on its core customer and getting the product right to grow the business, industry observers said this week.
HSP LK Bennett
The former BHS boss replaced Robert Bensoussan at LK Bennett last week. Bensoussan, who is an investor in the company and has been interim CEO for two years, will stay on as a non-executive director.
The premium womenswear retailer has also appointed former BHS financial adviser Michael Hitchcock as chief financial officer.
LK Bennett’s turnover fell 1.8% in the year to August 2015, its most recently published results. Its group operating EBITDA increased by £400,000 to £3m.
Analysts said LK Bennett has some “practical struggles” to overcome, and product will be key to getting the business back on track.
“LK Bennett’s results have been up and down,” said Anusha Couttigane, senior analyst at Kantar Retail. ”It sits in the premium to affordable luxury end of the market, where a lot of brands have done well but a lot have struggled, like Whistles, so getting the product right is essential.
“It needs to go back to its roots and focus on shoes and accessories. That’s a growing market in the UK, whereas the wider fashion market is struggling.”
Independent analyst Richard Hyman agreed. “It’s a good brand with a lot of unrealised potential. It hasn’t had much of a clear direction on what it is and who it is targeting. It needs to get the product right.”
He added: “LK Bennett thinks it is a designer brand but it isn’t. [Topp] has to look at its pricing. There are lessons it can learn from Jigsaw – it lost its way but Peter [Ruis, CEO] has put it back on track. It’s about getting the fundamentals right.”
The reaction to the appointment of Topp, who before working at BHS spent more than 20 years at Marks & Spencer in a variety of leadership positions, was largely positive.
Hyman said he was a “good operator with sound retail principles”, while Couttigane said his background and experience with customers of a similar age group to LK Bennett could be valuable.
However, one finance source expressed doubt over whether Topp was the right fit for LK Bennett.
“The business has had many ups and downs over the last few years and the fact that Robert was interim CEO for so long suggests they struggled to fill his shoes. It looks like desperation on both sides as Darren has come out of a bad situation [at BHS].”
He added: “LK Bennett is a very different business from where Darren has worked before. Both BHS and M&S are big corporate firms, whereas LK Bennett is more aspirational and concession based. It makes we wonder why both sides have chosen to go down this route.”