As we near the 25th anniversary of the Drapers Awards on November 26 at Old Billingsgate in London, we are looking back at some of the previous winners of the coveted Lifetime Achievement Award. Today we revisit former Debenhams boss Rob Templeman’s big win. From our archive, here is the Drapers Interview with Templeman after his award in 2011.
He’s been described as a ‘deal-making junkie’, but it’s his turnaround of Debenhams that earned Rob Templeman the respect of his fashion peers and this year’s Lifetime Achievement Award.
As Templeman traces back his successful career, which led to him winning the Lifetime Achievement Award at this year’s Drapers Fashion Awards, it’s clear Sharp has hit the nail on the head.
“The way I structured my deal for Halfords in 2003 with the private equity guys was that if something else came along I wanted to be free to pursue it, because I was watching Debenhams at the time,” he reveals – that trademark twinkle in his eyes – from his office at gambling firm Gala Coral in west London, where he is chairman.
Sure enough, when Templeman acquired Debenhams that same year, he remained as Halfords chairman, becoming non-executive chairman when Halfords later floated on the London Stock Exchange. He continued to be a shareholder while at Debenhams.
Described as a “deal-making junkie” by a mutual industry friend – he laughs when I remind him of the title – Templeman began his retail career in 1975 as a management trainee for carpet retailer Harris Queensway, where he met mentor Phil Harris (now Lord Harris of Peckham and founder of Carpetright) and rose up the ranks to retail operations director.
“Phil and I bought [furniture retailer] Harveys with a bit of private equity money, and built that up from 50 to 300 stores,” he says, “and we acquired a couple of businesses along the way.”
Later in 2001, Templeman, ever the private equity man, “did” Homebase with Permira and sold it two years later to financial services group GUS. “Homebase was the start of private equity coming back into retail because it was such a successful deal. We put in £130m plus debt, and the take-out price was nearly £1bn, so we made six times our money quite quickly.”
The Halfords deal followed (“We made nearly five times our money,” says Templeman) before he broke off his love affair with companies whose names started with H and led a hostile takeover of Debenhams in November 2003 with private equity consortium CVC Capital, Texas Pacific (now TPG Capital) and Merrill Lynch.
Building a team
Sharp recalls the Sunday morning in summer 2003 when Templeman came to his house and said he “had the backing of some aggressive Americans and could carry out a successful takeover of Debenhams”. Sharp says: “I had no idea who he was but he asked if I wanted to be part of his team. By the end of the conversation, I did.” Templeman jokes: “I remember that – Michael was in his pyjamas!”
In the eight years that followed, Sharp was a loyal deputy to Templeman, and many believe no one could have filled Templeman’s shoes better. “Michael’s been fantastic,” says Templeman. “The great thing about nearly all those companies, particularly Debenhams, is that all the people there today have been there for many years.
“People think when private equity comes along, we just remove everybody. I remember staff saying to us in the first week at Debenhams, ‘Where’s the rest of you?’ This is it, the two of us, we said. The rest is you.”
And moving from furniture to fashion wasn’t that hard, says Templeman. “What you’re really doing is managing a supply chain and a customer, so what you need is to make sure you have the right people.
Would Suzanne [Harlow, Debenhams’ group trading director] let me pick next season’s hot dress? I don’t think so.
If you ask people at Debenhams what I brought to it, they would probably say Rob was always the champion of the customer.”
That’s partly because of the priority Templeman places on shop floor staff. “I’ve always been a great believer that the shop floor always knows what’s wrong and they’re often bemused that people at the top don’t ask them,” says Templeman.
He also defied the critics who accused him of paying too much for Debenhams. Debenhams’ £1bn debt has reduced over the eight years that Templeman has been at the helm, and this year the department store cut its net debt by £133.1m over the year to September 3 to £383.7m. Full year pre-tax profit jumped 10% to £166.1m during the period.
“If you look over the last few years, Debenhams is the only one of the big groups that has continued to improve its profits. I was never worried about the debt because I knew the cash generation of the business was there,” says Templeman, giving me a maths lesson on how to expertly dissect a balance sheet.
“We continued to open more stores, to make acquisitions, and we didn’t cut our stock levels. We never made anybody redundant during the recession. We saw it was going to get tough, so we started looking at our supply chain. That’s when we started moving towards own-bought [product], to improve margins. It was a protective move for us because I knew that one or two of those concessions were in trouble.”
A darling of private equity, you wonder if there are any fashion businesses Templeman wishes he’d got his hands on. “I never looked around and thought ‘Oh, I wish I’d done that deal’. But there are a lot of companies I think are fantastic and a lot of people I admire. I think [Ted Baker founder] Ray Kelvin is one of the best product people I’ve ever met and a genuinely nice person. When you look at what he’s built from scratch…”
When asked if he’s ever received one of Kelvin’s trademark bear hugs, he replies: “He always knew that used to wind me,” he says with a heartfelt grimace. “As a person you can’t wish for a nicer guy and it permeates through his team.”
The same could be said for Templeman, who is now keen to give something back to an industry he loves. His numerous pro bono chairman roles include the British Retail Consortium (BRC) and Graduate Fashion Week. “I’d like to encourage smaller businesses to get into the BRC. I think there’s a lot of good to come out of small businesses; all businesses start small. We’ve got to regenerate the high street. We also have the [Mary] Portas review coming out. We have to wait and see the report but anything that puts the focus back on the high street is a good thing,” he says.
Into the future
Looking ahead, Templeman believes China will have an even bigger role to play in the UK retail industry. “There isn’t a very strong middle market in China, but that’s coming. As people start to earn more, they’ll spend more. Commodity prices will go up. I can see that happening in other emerging markets,” he explains. “If you look at fashion, margins have gone up significantly over the past few years, driven by direct sourcing, by strong currency and by people removing some of the middle men out of the supply chain.
“As commodity prices start to move up again, will we see more currency gains? Who knows? One thing I do believe is that we’re going to see reasonable inflation, and whenever you see big price increases or decreases, you get volume movements the other way. So, some of the discounters grew because volumes were growing. Now as prices go up, I look at the middle market and Next’s figures were good and M&S’s weren’t bad. Are people now saying, I’m not going to buy two, I’m going to buy one? It’s something that fashion needs to watch out for.”
As in love with retail as he may be, and given how the landscape has changed in the 30-plus years Templeman has presided over his deals, would he do it all again? He looks me straight in the eye. “Definitely.”
2011 Retires as chief executive of Debenhams; takes up chairman roles at British Retail Consortium, Graduate Fashion Week and RAC
2010 Chairman, Gala Coral
2009 Lifetime award, British Venture Capital Association
2006 Leads Debenhams IPO, then acquisitions of Roches in Ireland, Principles, Faith, and Magasin du Nord in Denmark
2003 Leads £1.7bn Debenhams takeover; becomes chief executive
2003 Executive chairman, Halfords, after it is bought by CVC Capital
2003 Sells Homebase
2001 Buys Homebase with Permira for £700m 1990 Buys Harveys with Lord Harris of Peckham
1975 Management trainee, Harris Queensway
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