The departure of Simon Calver from Mothercare highlights the challenges associated with bringing in a CEO with little traditional retail experience.
While retailers are placing more importance on multichannel capabilities, the departure of Simon Calver from Mothercare highlights the challenges associated with bringing in a CEO with little traditional retail experience.
As online shopping and services such as click & collect become increasingly important, companies are heavily investing in the area and this includes human capital. Businesses want leaders with knowledge in these areas that can help them implement an effective integrated multichannel strategy. However, general retail knowledge is still crucial.
In April 2012 Mothercare hired Simon Calver, an ‘online expert’ that was previously at Lovefilm for seven years – a subscription based film service that offers film streaming and DVDs through the post. However, under two years later and half way through leading Mothercare’s turnaround plan, part of which was using his e-commerce knowledge to develop the retailer’s multichannel business, he has resigned with no reason given.
Coming from his CEO role at Lovefilm he no doubt had knowledge in driving a company forward and an understanding of online. But he is not an online expert in a multichannel retailer, nor is he an expert in retail. Mothercare still has a large store estate and the intricate relationship between stores and online takes some deep understanding of the retail business to effectively manage – something that is entirely different to the Lovefilm streaming and subscription film business.
Concerns around the rate of progress of Calver’s strategy were highlighted in the latest results. While online sales were up 6.4% in the 40 weeks to 4 Jan 2014, in the last 12 weeks of this, where the crucial Christmas trading period fell, sales were down 1.0% - blamed on a weak toy market and a decision not to repeat the previous year’s free delivery offer which impacted elc.co.uk sales.
While there is no denying that understanding multichannel is crucial for the majority of retailers, indepth expertise does not need to lie with the CEO. Yes the CEO of a retailer needs an understanding of multichannel but this is needed alongside an understanding of finance, logistics, merchandising and every other factor that is relevant to retail. This, combined with a team of experts in each of these areas that can work alongside and advise the CEO, works more effectively than a CEO with expertise in one specific area and comparatively little experience in some of the other core fundamentals of retail.
- Carly Syme is an analyst at Verdict
Mothercare chief executive Simon Calver exits
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Comment: Calver's Mothercare exit prompts the question - what skills does a retail chief need?