People, product and places are dominating the retail headlines this week.
It is interesting how much activity there is at the highest level of the country’s largest retailers. Last week Phil Clarke, the boss of Tesco who started as a shelf-stacker, was removed and replaced by Dave Lewis, who has spent his career at Unilever. No promotion from within at Tesco anymore. Isn’t that a poor indictment of the previous management of Sir Terry Leahy? While Tesco is mainly a grocer, it has a huge business in clothes via F&F, but getting the food offer right will be higher up Lewis’s agenda. Consumers go to Tesco for provisions first and fashion second.
Over at the struggling Morrisons - a grocer that restricts its clothing offer essentially to its Nutmeg kidswear line - former Tesco finance director Andrew Higginson has arrived as chairman. He was at Poundland after Tesco, so presumably he is clued up with the consumers’ demands for low prices. A new chairman often is there to bring a new direction, so Higginson’s appointment will undoubtedly put pressure on Dalton Phillips, the Bradford-based supermarket’s chief executive.
Phillips was the successor to Marc Bolland, who left Morrisons in 2009 after a three-year stint to take the top job at Marks & Spencer. In a boardroom shuffle that would fit in well on the deadline day of football transfers, Alan Stewart, Marks & Spencer’s finance director, has just been headhunted by Tesco (the news broke just days after Stewart was promoted in Bolland’s most recent reorganisation).
Bolland’s tenure at M&S has not been outstanding and his future has been the subject of speculation for well over a year. Also in the corporate firing line is Michael Sharp at Debenhams, who as chief executive has struggled with the problem of how to pull the department store group out of its trademark spiral of discounting. Another business trying to find a new place in the UK market (although it thrives overseas) is Mothercare, now under the direction of Mark Newton-Jones. Whatever his plans for the maternity and kids’ specialist, he will have to find a new finance boss as the previous incumbent, Matthew Smith, has moved over to Debs.
While this band of strugglers try to find new ways of working in today’s fast-moving, price-sensitive market, Next shows everyone how it should be done, giving notice this week that it expects group sales to grow by 7% to 10% this year. You don’t have to be a retail guru to know that this can only be by gobbling market share from others. Our report about the reorganisation in readiness for the imminent departure of product director Christos Angelides to Abercrombie & Fitch suggests there will be a seamless progression at Next.
Meanwhile, over at Paddington, M&S is finally pressing the button on doing more business directly with factories rather than dealing with long-standing suppliers like Dewhirst and Courtaulds. It is ironic that M&S chose to hire Mark and Neal Lindsey, who were instrumental in streamlining Next’s sourcing strategy some years ago, to achieve this. It comes as a surprise, however, to realise that M&S was still using “middle men” suppliers and it underlines the rather sad realisation that on so many fronts the UK’s largest retailer of clothes by volume is still playing catch-up as slick rivals like Next and Primark motor off over the horizon, taking market share with them.
Finally, I read the latest news about the-future-of-the-high-street initiatives with a jaundiced view. All the small-scale help in the world would not be as beneficial to independent retailers as a proper and long-overdue reform of business rates.