“I was present… I don’t think I was actually involved.” Jeremy Corbyn’s risible comment on the latest controversy to engulf him could apply equally to the former top brass at Homebase and House of Fraser.
Tough trading conditions and radically changing shopping habits acknowledged, the urgent restructuring necessary at the DIY specialist and the collapse into administration of the department store group were ultimately down to bad owners and poor leaders.
The reasons for Homebase’s fall from grace are well documented. Previous owner Wesfarmers’ arrogance in parachuting a management team into a UK market it was unfamiliar with and abandonment of previously popular product lines cost it financially.
More to the point, it is now costing 1,500 people their jobs as new owner Hilco and chief executive Damian McGloughlin seek approval for a CVA as part of their turnaround efforts.
“In each case there was a fundamental dereliction of duty – a failure to anticipate shopper needs and desires”
At House of Fraser, former owner Yuan Yafei failed to come good on his promises to invest in and expand the business. Just a few years back, while it may not have led the pack financially, House of Fraser was home to all sorts of multichannel innovation that other retailers looked to for good ideas.
At the turn of the year, Yafei maintained his Sanpower business was “fully committed to its long-term investment in the UK retail market, and to continuing to provide all the necessary support to ensure House of Fraser’s success as the leading UK premium department store chain”. All hot air.
HoF has spent its time since living hand to mouth as an inexperienced retailer, Alex Williamson, who can’t be blamed for its demise, was thrown in at the deep end.
In each case there was a fundamental dereliction of duty – a failure to keep abreast of and anticipate shopper needs and desires.
The toughest climate
The collapses have dominated headlines and retail has been cast as an industry in crisis. This is the toughest climate many have known, but high-profile failures risk obscuring the success stories and great leadership demonstrated across the industry in businesses old and new.
Think of Primark boss Paul Marchant. He keeps a low media profile but speak to anyone in fashion retail and it’s usually not long before they’re paying tribute to the sustained success Primark has delivered under his leadership.
The fact Primark doesn’t even sell online is further testament to his merchant skills. During his time at the business, Primark has also quietly led the way in setting ethical standards. He’s been present and involved in a good way.
Similarly, Asos chief executive Nick Beighton typifies a new generation of retail leader – a lot less brash than the traditional old guard but all over a changing customer and retail landscape. He too has taken a lead on ethics through initiatives such as addressing modern slavery.
Over at Iceland, there’s Sir Malcolm Walker. It’s hard to think of anyone in retail whose presence has been felt to better effect in their business. He’s battled through thick and thin to build, rescue and rebuild Iceland – his spirit is all pervading at the retailer.
“House of Fraser’s new owner Mike Ashley didn’t become a billionaire by being an absentee landlord”
So what of Homebase and House of Fraser’s new owners and leaders?
McGloughlin brings plenty of experience from DIY market leader B&Q and those years of operational expertise could be applied to good effect at Homebase.
Hilco has sometimes proved a controversial player in retail, seen by some as a ‘corporate vulture’, but its revitalisation of HMV won it a ‘turnaround of the decade’ accolade.
House of Fraser’s new owner Mike Ashley didn’t become a billionaire by being an absentee landlord. He even remained a sole trader right up until 1999. House of Fraser gives him the chance to realise a long-term ambition of owning a department store business and building his premium brand operations.
The future success of both retailers is uncertain. But in the circumstances, each now has the best chance they are ever likely to have to carve out new purpose and resonance with shoppers, with leaders likely not just to be present but actively involved.