The news that Stuart Mitchell is to step down from his role of chief executive at value retailer Wilkinson has put the store’s recent success, and immediate future, in the spotlight.
After almost six years at the helm of the UK’s eighth biggest privately-owned retailer, Mitchell said he was leaving to “pursue other opportunities”. He leaves a company on a crest of success achieved during his tenure, often unheralded.
Following consistent expansion over the past decade, the company now operates more than 360 stores, and turnover has more than doubled since 2000, surpassing the £1.5bn mark in 2009/10.
Sales remained flat in 2010/11 as a result of the tough economic climate, but the general trend at the company has been of good growth, according to Neil Saunders, managing director of consultancy Conlumino.
Successful strategic initiatives have included a programme of store refurbishments, which is due to complete by 2013/14 and the expansion of ranges and own brand products. Private label products have been taking an increased share of sales in recent years and accounted for 45% of group turnover in 2010/11.
Mitchell has positioned the company very strongly on the high street, taking advantage of recent developments such as the demise of Woolworths. It is a good generalist, and does well across a number of home categories, especially in DIY and gardening, says Saunders. “It’s carved out a good niche for itself, and is of course very value-focused, which has done very well in these difficult times.”
As the company enters a phase of maturity, its key challenges include getting more out of existing stores, developing products, and increasing relevance and footfall.
Competition on the high street continues to intensify, with the growth of discount retailers such as Poundland presenting extremely price-focused competition with some product overlap, while supermarkets also pose a continuing threat.
Other mixed goods retailers in out-of-town locations have also been putting pressure on Wilkinson. For example, in 2010, 99p Stores introduced a new Family Bargains out-of-town format, with 10 stores established by summer 2011.
Wilkinson has a well-established large-scale discount format which is likely to continue to draw customers across the board, but tackling those challenges will be imperative for whoever takes on the role of chief executive.
Ideally the candidate should be “a seasoned retailer”, says Saunders. “It should be someone who has been successful at developing a mature business, and has possibly previously led transformations of stores or merchandising – those are the things [Wilkinson] needs at the moment.”
What they don’t need is a “bean counter”, he adds. “The company needs lots of creativity and energy around the retail front, because that is where the challenges and opportunities lie.”