In his four years at the helm of Selfridges, Paul Kelly has spent as much time as possible on the shop floor finding out what makes his staff tick. He takes Drapers on a tour of the retailer’s London flagship
When Paul Kelly took on the role of chief executive at Selfridges just over four years ago, Drapers rang round other execs in the industry to find out what he was like. But we got surprisingly little feedback. After meeting Kelly last week at Selfridges on London’s Oxford Street, the reasons for the mute response were obvious - we asked the wrong people.
If we wanted to find out what Paul Kelly was really all about, we should have visited Brown Thomas in Dublin, which he headed for a decade, and simply asked the woman running the Mac counter or the guy selling Tommy Hilfiger. It seems Kelly is a retailer who still spends almost half of his time walking the shop floor talking to staff and customers.
Taking a tour with this imposing Irishman - Kelly is well over six foot tall - is a real insight into what fires him up. “It’s hard to say how much time I spend out here, but it’s a lot,” he smiles. “If you don’t put in the hours on the floor, how can you know what’s happening in the business? If you don’t like the shop floor you shouldn’t be a retailer, because this is where the action is.”
Before the tour kicks off, he apologises that he might not always maintain eye contact as we chat. “I’m always watching what’s going on because I don’t want to miss anything. That’s what I love about the shop floor - the staff come out with absolute gems. Most days I learn something that can improve the business and help people do their jobs better. That’s what our job upstairs should be all about.”
The ‘job upstairs’ has been keeping him busy for four years. When the Weston family - which also owns the Holt Renfrew department stores in Canada - finally bought Selfridges in 2003, it had been eyeing the company for several years. Kelly, one of its trusted executives, had been running Brown Thomas for 10 years.
When given the opportunity to take the helm at Selfridges, he had no misgivings. “I like looking forward, not back. The day I left Brown Thomas we were having our annual party. No one knew I was leaving - at the end of the night I just said goodbye. That was the past and I had to get on with the future.”
He admits there were some in the industry who felt that running the 100,000 sq ft Brown Thomas store had not prepared him for the job at 550,000 sq ft Selfridges. “I didn’t understand what the fuss was about. It may be big, but it’s just a shop full of customers and staff - what’s the difference? Brown Thomas had four stores in Ireland, plus the BT2 young fashion stores, and Selfridges has four stores in the UK, so there wasn’t much difference to me,” he says.
Kelly says that although he and the Westons had obviously looked closely at Selfridges before buying it, there was still a huge job to do when they took over. “We needed to get to know our people and make sure we had the right team doing the right jobs. We needed to instil sound retail practices. It’s taken a while to get things running the way we like them, but last year was fantastic - we recovered from the malaise that set in after the London bombings in 2005. In terms of turnover and profit, the past two years have been the best in the business’s history.”
Selfridges posted sales of £538 million in the year to January 31 2006 and Kelly says its profit margin should be the envy of retailers around the world. “Like-for-like sales and profits are 20% up this year, so we’re hoping for another record year,” he says. “Our targets are all about raising the bar.”
Kelly attributes this success to getting the basics right and says everyone in the business is now focused on the customer. “It sounds like something all retailers say, but it really is that simple. Too many retailers get so tied up with other stuff that they just don’t think about it.”
This customer focus also had to be applied to Selfridges’ other three stores, in Birmingham’s Bullring, Manchester city centre and the Trafford Centre. Birmingham in particular suffered poor trading in its first year. Kelly says: “Early in my time I was at a managers’ meeting. Someone said: ‘I don’t know what it is about Birmingham - the shoppers don’t get it. They don’t understand what we’re doing.’ I said: ‘It’s you that doesn’t get it!’ We needed to work out what people there wanted. Now menswear and womenswear are running brilliantly.”
But Kelly is not happy with brilliant - he’s a driven man. “There’s a word that keeps me awake at night and it’s complacency. I’m always driving to do better.” An avid Manchester United supporter, he likens his work ethic to that of Irish football legend Roy Keane, the former captain of Manchester United and Irish international who demands the same high level of commitment from everyone he works with.
Kelly explains: “We are now in pole position in the world in terms of our branded offer, and it’s harder to stay in pole position than it is to be pushing from below. But that’s the challenge. It’s all about consistency in everything we do.”
As we stroll through the women’s ready-to-wear designer floor, he is visibly proud of the area, which opened earlier this year. “When I got here we were dabbling in designer ready-to-wear clothes with no real depth - they were just thrown on rails,” he says. “Now we can have pretty much any brand we want.”
He speeds past the Marc by Marc Jacobs area that opened four weeks ago, mentioning that it is the brand’s number one sales area in the world, even beating sales on its home turf in New York. “We have a fantastic sales guy in there, and it helps that womenswear is trading its socks off at the moment,” he says.
Surprisingly for a business that has such a strong concessions offer, Kelly is a firm believer in the power of own buy. “Before we got here it was very concession-based. Everybody talks about the risk of own buy, but if we’re doing our jobs properly we should have already de-risked it. We want to do the right thing for the business, so we don’t have a fixed strategy on the balance of concessions versus own buy.”
There are 3,000 staff employed at Selfridges’ Oxford Street store and because part of it is always being refurbished, there can be up to 300 contractors and architects working in parts of the building at any one time. “It’s great to see projects such as the menswear floor come to fruition - to see things that you fought tooth and nail over for more than a year ago become reality. A lot of our planning is in the detail,” he says. “We spend hours making sure that a fixture has a drawer. It’s about making it easier for whoever will be selling it to the customer.”
Getting the mix right for shoppers is what influenced a change of policy on large one-off events such as Bollywood and Las Vegas, which made the store famous across the world. Kelly says: “They were great, but my misgivings were that if you keep doing them they go stale, and a one-off event in May meant that if you weren’t in the store in May, you missed out. We talked about doing something regularly on a smaller scale, and we’ve ended up with events such as the Surrealist exhibit that’s in store now. It attracted 7,500 people last Saturday. We have a permanent space called the Ultralounge, which we can configure for these things.
“It’s not just about selling stuff - it may make you think or make you smile. The Ultralounge is 3,000 sq ft of valuable space that we keep for events all year, so in some ways it’s a bigger commitment than what we did before,” he says.
Commitment - that word again - and Kelly brims with it. He is certainly committed to the Weston family, who own Selfridges, having worked for them since 1984. Until he joined Selfridges, his whole career has been in Ireland. He says: “When I was a lad I worked part-time in a department store in Dublin. I finished my school certificate and somebody told me to become an accountant, but I just couldn’t stick it. It’s great that I can understand numbers, but it bored me senseless. So I got a full-time job as a trainee manager for a department store. That was taken over by the Dunnes department store group. Dunnes also owned supermarkets, so I was flung into a whole new world of retail.”
When he joined the Westons’ empire he ran the chain of boutiques originally called Gay Wear, later renamed A-Wear. In the late 1980s he was given the chance to move into the department store business and eventually got the opportunity to run Brown Thomas.
He says: “When working for the Westons you are part of their retail family. The fact that Alannah works here as creative director shows the family’s commitment to the business. They are hands-on retailers, which suits my style.
“Why would I want to go anywhere else? I have a saying: ‘Do a job you love and you never have to work for the rest of your life.’ That’s how lucky I’ve been. The Westons do not buy businesses, take everything out and sell them on - they take decisions for the long term, which makes them great to work with.”
PAUL KELLY ON …
… New stores
“We still own the site that Selfridges’ previous management bought in Glasgow and we have made no firm decisions on whether we will go ahead with that or not. If the time is right and the opportunity presents itself, we may still do it. But we have more than enough work here in London to get the Oxford Street store exactly how it should be before turning our sights elsewhere.”
… Primark on Oxford Street
“Every time I have been into Primark, a customer stops me and asks me for help. I’ve been pulling (managing director) Arthur Ryan’s leg about it. Something about me must just say ‘shopkeeper’, even though I don’t think my look is very Primark.”
… Irish retailers
“Ireland is such a small place, so retail over there has always been ultra-competitive. If there’s a guy selling something down the road for £4.50, you need to sell it for £4.25. It’s this mentality that makes Irish-trained retailers very quick on their feet, which has served them well when they have ventured overseas.”