House of Fraser’s new chief executive, Alex Williamson, has been building his top team since his arrival at the department store chain in August.
The newest recruit, as Drapers revealed last week, is former managing director of Fenwick’s Bond Street flagship, David Walker-Smith, who is taking on the role of chief product and trading officer.
This followed the appointment last month of Reiss chief digital officer Simon Pickering as buying and merchandising director for clothing and accessories. Internally, Williamson promoted Gary Slattery, retail director since 2016, to executive director for retail, and Gary Monk, transformation director since 2017, to executive director for operations.
At the same time there were a slew of senior departures: Peter Gross, chief operating officer since 2008, chief information officer Julian Burnett, and executive product and trading director Maria Hollins.
Williamson is due to reveal his strategy for the ailing department store group next month, so does he now have the right team in place for a turnaround?
Walker-Smith’s arrival on 12 March has been largely welcomed by the industry.
“Walker-Smith has good experience of buying,” said Moira Benigson, founder of executive search company The MBS Group. “He also brought his own handwriting to Fenwick and that worked very well, so he will help develop House of Fraser’s own labels. Product has been a major struggle.”
TRP recruitment managing director Shelley Pinto said he would elevate the store environment: “House of Fraser needs to go upmarket, as customers want that ‘wow’ factor. It is all very well having premium product, but it needs to be a premium destination.”
Stephen Selby, managing director at Success Appointments, feared the amount of personnel change could prove disruptive to the business: “Change is not always a good thing – even if it is for a good reason – if you are lacking continuity.”
However, Mamequa Boafo, senior analyst on the clothing team at Global Data, argued the “immense array” of high street experience held by Pickering and Walker-Smith will stand House of Fraser in good stead during the restructuring of the management team: “It is a step in the right direction, particularly when their current CEO does not have much of a retail background.”
House of Fraser needs to go upmarket, as customers want that ‘wow’ factor
Shelley Pinto, TRP recruitment managing director
Yet the task the new team faces is daunting. In addition to tough trading conditions, last month HoF had supplier credit insurance withdrawn from one provider. It also hired Rothschild to refinance £225m of its £390m debt package and is seeking rent reductions from landlords.
These measures follow from problems with a £25m ecommerce platform upgrade in April last year, which one supplier described as like “someone turning the tap off” on sales. Announcing the Christmas trading results in January, Williamson said the ”trajectory of our web business is now back on track.” He added that, as part of its transformation programme, HoF made savings of £10m in 2017, and that “good progress” has been made in securing a further £16m in savings for 2018.
One agent told Drapers he advised against one of his brands expanding its range in HoF because of the credit insurance issues. Another said she does not work with HoF because the retailer is no longer aspirational.
Independent analyst Nick Bubb said Chinese owner Sanpower will need to dig deep to ensure HoF’s future: “The business needs more money just to keep going. The risk is still that the banks will require more new equity to be injected than the Chinese are willing to stump up.
“It is possible the business can continue to limp along without a radical restructuring, but the chances of success are pretty low.”
Priorities for the executive team should include investing in its systems and its online proposition, while ensuring it gets the product right, says Boafo. “They’ve struggled in terms of innovation of product. Online investment is also very important because that is the way the retail industry is going, and the in-store customer experience is essential to drive footfall.”
One HoF supplier remained confident the new team can revive the business: “Individuals of Walker-Smith’s calibre would not be joining a company if they did not feel there was a strategy and confidence to take the company forward.
“The appointment of [Williamson] was a brilliant move. It is a stroke of genius to bring somebody in who is thinking out of the box rather than in the box, because those people in the box do not seem to be doing a very good job of it anywhere else.”
The Drapers Verdict
Like many of its counterparts, HoF is struggling to catch up with a rapidly changing retail environment. Its success or failure will hinge on the executive team choosing the right strategy, executing it swiftly and receiving the financial support it needs from Sanpower. As noted by one supplier HoF is one of the UK’s largest multi-brand retailers, so many businesses are depending on Williamson and his team to get it right, if not the effects could spell disaster for the wider fashion industry.