Anders Kristiansen’s sudden exit from New Look yesterday rounded off a week of shock retail departures.
New Look has performed poorly recently, as UK like-for-likes were down 7.5% and underlying operating profit slumped 60% in its last quarter.
But there is a cruel irony in Kristiansen already having been credited with turning the business around once, after he arrived at a particularly low ebb in 2012 when pre-tax profit had dived 55%.
He has attributed New Look’s problems to a lack of trend authority, laying the financial problems squarely at the door of product and had taken bold steps to remedy that.
“Even if Brait manages to find a UK retailer with all that in spades, New Look still faces an uphill struggle”
As revealed by Retail Week in June, he hired former-Zara director Paula Dumont Lopez to take over as chief creative officer from veteran Roger Wightman and was unsentimental about letting underperforming directors go, as evidenced by a string of departures over the last year.
As it turns out, South African owner Brait afforded him the same treatment.
Finding the next in line
So, with Kristiansen leaving New Look’s Fitzrovia headquarters for the last time yesterday, what type of leader might take his place? And will they be able to turn New Look around?
Headhunter Moira Benigson believes that the new chief executive will need to be a highly experienced leader and will need to know the UK market inside out.
Kristiansen – while a very capable retailer – has neither, arriving at New Look from Bestseller’s Chinese business.
“It was a very big job for him, his first job as chief executive,” says Benigson. “He would have been learning on the job, he was very young when he got it. Everything he was doing he was learning from scratch.
“They need someone who understands UK retail incredibly well. And they will need to be a very, very tough operator because they will have to close stores.”
“The new chief executive will need to be both a highly experienced leader and to know the UK market inside out”
Her view on property is echoed by another headhunter.
“They have far too many stores,” the person asserts. “They are massively overspaced. [Kristiansen] is an operator so he probably likes expanding and at the moment they need to focus on digital and close stores.”
The headhunter adds digital-focused, customer-centric and turnaround experience to the list of requisite qualities for a new candidate.
But even if Brait manages to find a UK retailer with all that in spades, New Look still faces an uphill struggle.
It has become one of the most squeezed members of the squeezed mid-market at an alarming rate, and now operates in a very different market to the one Kristiansen came to in 2012.
The harsh truth is, New Look is not the best at anything anymore.
Primark has cornered price while Zara owns trend authority. Boohoo and Missguided have joined Asos in the speed stakes, while new entrants such as Reserved pile in.
New Look does not even have the residual brand power of fellow Brit player Topshop – still a venerable name despite Arcadia’s troubles.
Of all the above players, it is Zara that has had the biggest effect on the UK high street. Kristiansen knew that and was keen to hire ex-Inditex staff in an effort to battle back against its continuing onslaught on British retail.
But beating a business at its own game is tough. You can’t out-Zara Zara.
Instead, New Look must fashion its own identity and find a new look, if you will.
No comments yet