The first of September has hit and fashion retail news is back in full force. The big news that affects most retailers this week is about the living wage. However, the news that has got the industry talking is the departure of Asos.com chief executive Nick Robertson.
In his July Budget, George Osborne announced the national living wage of £7.20 an hour for over-25s would be compulsory from April 2016. This week, Oliver Bonas became the first high street retailer to confirm it will pay the living wage recommended by the Living Wage Foundation, of £7.85 an hour – higher than the chancellor’s – prompting a lot of good feeling towards the brand on social media.
However, former Sainsbury’s boss, Justin King, and the chief executive of Shoe Zone, Anthony Smith, have both raised concerns about the impact this could have on employment practices. Smith even admits Shoe Zone will encourage value retailers to employ younger workers.
And, from a business perspective, why wouldn’t they? Prime minister David Cameron stated on Wednesday that companies will face tough fines if they fail to pay the living wage, so retailers need to address this issue now and decide on a strategy that works for them.
Good feeling and brand loyalty versus higher employment costs: it will be a tough decision for many, I’m sure.
It didn’t come as a complete surprise to the industry – I’ve had many a discussion at recent ecommerce events about when the time would come – but it has prompted me to have a look back at the last 15 years under Robertson’s leadership.
And no one can deny that Asos has completely changed the retail landscape.
Originally launched under the name As Seen On Screen in 2000, the business started with just three people: Robertson, Quentin Griffiths and James Hart.
Today it employs more than 1,600 staff. It has grown from a creative start-up to a corporate machine, known for its innovation and fail fast mentality.
As Asos continues to rapidly increase its international expansion, maybe financial discipline is just what the etailer needs
Over the last 15 years the business has been through turbulent times – the fire in its Barnsley warehouse, a fulfilment glitch that delayed orders, and the arrival and departure of product director Kate Bostock within the space of seven months – but it has not shifted from its place as the leading pureplay fashion etailer.
I’d imagine the reason for Robertson leaving is simple: he needs a break. Although I don’t think someone with his entrepreneurial spirit will be breaking for long.
His right-hand man, Nick Beighton, is moving into the chief executive role, so Robertson knows the business will be led in a way that he approves, and I expect he will stay on as a very active non-exec.
And what of Beighton? While he isn’t necessarily known for innovation, what Beighton is, is a numbers man.
And, as Asos.com continues to rapidly increase its international expansion, maybe financial discipline is just what the etailer needs.
In addition, it must remain customer-centric, and innovate to keep ahead of its competitors and remain relevant to its young customer base.
It’s a challenge, but one that Robertson must believe Beighton can take on.