Mothercare shocked the market today by unceremoniously sacking chief executive Mark Newton-Jones and appointing a former Kmart and Tesco executive in his place.
Newton-Jones, who had led Mothercare for four years, was informed of the board’s decision to oust him and bring in David Wood this morning, according to chairman Alan Parker.
While the abrupt nature of his departure and his replacement’s arrival is a surprise, perhaps it shouldn’t be.
In less than a year, the specialist retailer has gone from reaching a “watershed moment” in its transformation, to making redundancies, issuing a profit warning and pleading with lenders to defer covenant testing.
So, will Wood be the answer to Mothercare’s woes?
Wood comes from Kmart where he was in charge of its grocery arm. Mothercare has said that he is credited with its turnaround, transforming it into a sustainably profitable business. Before that, he spent nearly a decade at Tesco in roles varying from chief marketing officer to commercial director of its Hungarian operation.
He’s clearly a capable operator – Mothercare would very much like to become a sustainably profitable business following the recent slashing of its profits forecasts – but so too is Newton-Jones, who a year ago seemed to have begun to get Mothercare back on track and before that started Shop Direct’s notable turnaround pre-Alex Baldock.
“I know where we are trying to get to – I have operated where we want to be”
Today Wood cited his experience at Tesco during troubled times as evidence of his capabilities.
“I cut my teeth at Tesco,” he said. “I know where we are trying to get to – I have operated where we want to be.”
That isn’t just idle talk. Wood succeeded in multiple, varied roles during a time when the grocer was going through the mill.
One person who knows Wood termed that achievement “remarkable”, and said that he was “very well-liked, very easy to get on with”.
“He has a real ability to take people with him and is creative and positive,” they added.
No strategic shift
Mothercare HQ is no doubt in need of some positive thinking right now, but it needs a whole lot more besides.
Battling through a major crisis at Tesco and managing a turnaround at Kmart puts Wood in good stead to turn Mothercare around, if indeed that’s an achievable aim.
The retailer does not intend to change its strategy, which it maintains faith in. Indeed, Newton-Jones has done a lot of heavy lifting over his four years, slashing store numbers and attempting to create a business fit for digitally savvy parents to be.
“There are always contextual challenges. Let’s focus on what we can control”
Reducing its store estate to focus on regional catchment areas, sharpening its focus on preschool children and parents-to-be and a more customer-centric approach through better use of data.
Instead, the retailer is relying solely on its new boss’ operational and executional prowess. Parker described the new chief executive as a “Premier League manager for a Premier League job” this morning and told Retail Week that, this time, “what’s going to be different is David Wood”.
He blamed “delivery and execution” problems for Mothercare’s woes and praised Wood’s talent for execution.
Asked if the retailer’s lifespan had perhaps run its course and it could not battle the competition any longer, Wood replied that Mothercare’s strategy made “eminent sense”. “There are always contextual challenges,” he added. “Let’s focus on what we can control.”
Unfortunately for Mothercare, a good-on-paper strategy only goes so far. In this market, getting the problem child off the naughty step may prove too difficult a task.