It’s that time of year in the jobs market when retailers that have encountered difficult trading in the run-up to Christmas reflect on what went wrong and what they could do better.
Last week, Paula Nickolds paid the price for a poor set of results at John Lewis Partnership, and this week brought the news that Kevin Keaney is to step down as chief executive of The Works to be replaced by chief financial officer Gavin Peck.
In the context of a cut-throat market, results during the festive period were hardly a disaster for Keaney. Many retailers – John Lewis included – would have been ecstatic with like-for-like sales growth of 1.5%, but taken over a longer period it’s clear to see why it was felt a change was needed.
Like-for-like sales during the first half of the current financial year to 27 October fell 1.9%, while pre-tax profit for the same period dipped further into the red at £-4.3m as increased promotional activity weighed heavily on margins.
Keaney has been in post for nine years now which is a good stint for any CEO. During that time sales have grown significantly, in part due to aggressive store expansion but also driven by the development of its online business, a widening of the product offer, and the success of its Together loyalty scheme.
Profit margins, on the other hand, have been more difficult to maintain, unsurprisingly perhaps given The Works competes directly with Amazon in some of the web giant’s most established categories.
Keaney has spent his entire career in retail with businesses including Somerfield, M&S and Animal. Former colleagues describe him as a fine people person and born leader and I’ve no doubt we’ll see him back in a prominent retail role once he’s taken a break.
Peck, meanwhile, appears a natural successor. He joined The Works in April 2018 as chief financial officer having previously led the commercial function during a seven-year spell at Card Factory.
The two businesses share a number of similarities: both are positioned at the value end of their respective markets and have grown their store estates rapidly in recent years. The pair have also been taken public, back in 2014 in the case of Card Factory and 2018 for The Works. Wren was in post for both IPOs and should, therefore, be comfortable with the important responsibility of dealing with investors.
A qualified accountant with a degree in economics, we can expect Wren to keep an expert eye on the cost base as The Works reins in its store expansion in the short term to focus on delivering improved performance in its existing estate.
With retailers’ Christmas results still filtering through, conversations about future strategy will continue to be had in earnest in the weeks ahead. The departures of Nickolds and Keaney will surely not be the last before the month is out.