UK Retail CEO Tracker 2019 - Korn Ferry

UK Retail CEO Tracker 2019Female CEO appointments on the rise, against a backdrop of fewer overall CEO changes in the past year.

2019 Korn Ferry UK Retail CEO Tracker

Britain remains at the centre of an economic and geopolitical storm, and most within Retail have never had it so tough. Consumers have never been more demanding. Competition from new entrants continues unabated and the talent required to lead our industry through transformational change is in short supply.

Our Retail landscape today seems to be split into two: established bricks-

and-mortar retailers struggling to compete in a new world, and pure-play

online retailers who continue to enjoy phenomenal growth, limited only

by their own capacity and resources.

There has never been a more pressing time to develop the next generation

of CEOs who are reflective of the consumer base – agile, diverse and

digitally savvy. This is the seventh Annual Retail CEO Tracker report, which

tracks the changes in CEO moves across the sector, category by category

and year on year. We hope you enjoy reading it.

Author: Sarah Lim

Managing Director & Sector Lead, Retail, EMEA

Korn Ferry International

Contributors: Zoe Duke & Sacha Trimbee

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UK RETAIL CEO TRACKER REPORT 2019

Introduction

At a macro level, the UK economy grew modestly during 2018, with figures likely to show growth of about 1.3% for the full year once released. For the Retail sector, 2018 proved to be one of the most difficult years on record, with a drop in retail sales, an increasing number of CVAs, rising costs due to the weakness of sterling, and the ongoing threat of a no-deal exit from the EU.

Yet irrespective of the unpredictability of both the political and economic landscape,

and seismic change at a sector level, the Retail sector has made a significant

breakthrough in the ratio of female to male CEOs appointed in the past year.

While the overall number of CEOs changing seats dropped from 50 to 44 year

on year, nearly 25% of those CEOs appointed to the sector were female, up from

18% in the previous year. This is the most significant improvement in female CEO

appointments since the Annual Retail CEO Tracker was first published in 2012.

The Annual Retail CEO Tracker follows changes in CEO appointments, analysing

over 200 retailers/brands operating throughout the UK and Ireland, across

all categories. It covers all major brands and retailers, online and physical,

for companies whose revenues are at least £50m per annum or more.

Despite the political backdrop and headwinds in the Retail sector, CEO changes were down 12% from the previous year. Of the newly appointed CEOs, a quarter were female, representing the most significant improvement since the Annual Retail CEO Tracker was first published in 2012.

2019 UK Retail CEO Tracker

WOMEN RISE TO THE TOP

changed seats, down from

50 the previous year

of newly appointed CEOs in

the Retail sector were female

44 CEOs 24%

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2018 HIGHLIGHTS:Five notable findings from this year’s Annual Retail

CEO Tracker:

• There were significantly fewer CEO changes last year

(44) compared with the number in the previous year

(50) – down 12%.

• The percentage of female CEOs appointed has increased

dramatically to 24%; almost one in four CEOs appointed

in the past year were female.

• 37% of CEO changes saw the former CEO in place for

less than three years. In a significant number of these,

the CEO had been changed twice or in some cases three

times in the past three to four years.

• 46% of newly appointed CEOs came from a functional

background in Commercial – either Sales or Trading/

Buying and Merchandising. There was a marked drop-off

in the number of appointed CEOs from a Finance

or Strategy background.

• 55% of all retail CEO changes occurred within the Fashion,

Luxury, Apparel and Department Store Sectors. Yet of the

21 CEOs appointed, only five were internally promoted,

raising the question of whether Fashion and Apparel

businesses are doing enough about succession planning.

Macro factors affecting the Retail sector

• Brexit uncertainty may be a contributing factor as to

why businesses are being more cautious about making

CEO changes.

• The sector continues to undergo seismic transformation

with the shift from high street to online.

• There is a well-publicised uneven playing field from

a taxation standpoint between pure-play online and

traditional bricks-and-mortar retailers.

46% of newly appointed CEOs came from a functional background in Commercial – either Sales or Trading/ Buying and Merchandising.

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CEO changes in the past 12 months

Compared to the previous year, 2018 saw a significant drop of 12% in the number of Retail CEO changes, with 44 announced changes of CEO versus 50 in 2017. Out of the CEO changes announced, three are yet to be appointed/announced (Clarks, House of Fraser and N Brown).

Thirteen of the 44 companies that changed CEOs were owned or part-

owned by private equity/VC funds including Permira, Advent, Bain Capital,

Blue Gem, Baring Private Equity Asia, Lion Capital and Bridgepoint.

Fifteen of the companies were private/family/member owned, and the

remainder were either publicly-quoted or part publicly-quoted companies.

Many changes have been driven by: • ownership change, for example at Belstaff, Farrow & Ball,

Ideal Shopping, Nisa and Jigsaw;

• owner/founder transition, for example at Boohoo, Office,

Oak Furniture Land and The Range;

• broader CEO succession planning, for example at Selfridges

or TM Lewin; and/or poor trading performance.

Overall Summary

of CEO changes were in the Fashion,

Luxury, Apparel and Department

Store sectors.

55%

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Specific sector note

In the past year, 55% of the CEO changes (24/44)

were in the Fashion, Luxury, Apparel and Department

Store sectors. Only five of these were internal

appointments: All Saints, Hobbs, Oasis/Warehouse,

Selfridges and Whistles. This inevitably raises two

questions: (1) to what extent is this a result of extreme

sector stress, and (2) is this sub-sector of Retail so

poor at succession planning compared to others that

76% of the CEO appointments in the sector had to be

made externally?

CEOs to watch

Notable ‘ones to watch’ of the bigger CEO appointments

made in the past year include the following:

• John Lyttle, who takes the reins as first-time CEO

at Boohoo in March 2019, with the co-founder joint

CEOs transitioning to Executive Chair and Executive

Director roles respectively;

• Sebastian James, who joined Walgreens Boots

Alliance in September 2018, effectively as the CEO

for the Boots business, with a brief to reinvigorate

the brand and make advances in digital;

• Alex Baldock at Dixons Carphone, with a significant

job ahead of him to turn around the fortunes of

the mobile business and to fully integrate Dixons

and Carphone;

• Henry Birch who took over from Alex Baldock

as CEO of Shop Direct.

CEO Changes by Sub-Sector

Fashion, Luxury & Apparel

Grocery

Home & Garden

Department Store

Pureplay

Other

5%

18%

7%

9%

50%

6%

of all new CEO appointments in the Fashion,

Luxury, Apparel and Department Store

sectors, were made externally.

76%

Of the rest

Key Grocery sector appointments in the past 12 months

were Jason Tarry as UK CEO of Tesco, Kari Daniels as

CEO of Tesco Ireland, and Ken Towle as CEO of Nisa

(part of The Co-op Group).

Notable appointments within Home and Garden in

the past year were Anthony Davey at Farrow & Ball,

Javier Quiñones at IKEA UK, Tim Stacey at DFS and

Terry King at Oak Furniture Land. The Screwfix and

B&Q CEO roles changed again this year (both internal

moves), with John Mewett’s appointment at Screwfix

and Graham Bell’s appointment at B&Q.

Key online CEO appointments in the past 12 months

were Henry Birch at Shop Direct, John Lyttle at Boohoo

and Barrie Seidenberg at Notonthehighstreet.

Thirteen of the 44 companies that changed CEOs were owned or part-owned by private equity/VC funds.

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increase in appointments

of female CEOs from 2017

Increase in female CEO appointments

While the overall number of CEOs appointed dropped over the past year, there was a significant percentage increase in the number of female CEOs appointed – over 24%, up from 6% in the previous year. This is the highest number in any year since the CEO Tracker started in 2012.

6%

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In the past 12 months, ten of the 41 CEOs appointed

(24.3%) were female. These were: Helen Wright at

Belstaff, Melinda Paraie at Cath Kidston, Liz Evans

at Fat Face, Suzanne Harlow at Jack Wills, Barbara

Campos at Joseph, Erica Vilkauls at LK Bennett, Barrie

Seidenberg at Notonthehighstreet, Anne Pitcher at

Selfridges Group, Kari Daniels at Tesco Ireland and

Helen Williamson at Whistles.

Of these ten appointments:

• Only three are proven former CEOs – Helen Wright,

Liz Evans and Barrie Seidenberg;

• The rest are ‘step up’ candidates in their first true

CEO role – either from a divisional MD role, or

from a functional role in Commercial/Buying and

Merchandising.

• Sector-wise, with the exception of Kari Daniels at

Tesco Ireland, all have gone into roles in Fashion/

Apparel/Gifting sub-sectors;

• All ten have come up through a strong background

in Commercial and Trading/Buying and Merchandising

in their former careers.

Seven-year trend of female CEO appointments in Retail

The period from 2012 to 2018 shows a small improvement

in the number of women appointed into CEO roles

in the industry year by year, but, more significantly,

a step-up in percentage terms as a whole.

Female Representation at the Top

24%

76%

Female Male

Seven Year Trend of Female CEO Appointments in UK Retail

Number of women appointed

Percentage of Total CEO appointments

2012

2 5%

4 10%

6 15%

8 20%

10 25%

2013 2014 2015 2016 2017 2018

In the past 12 months, ten of the 41 CEOs appointed (24.3%) were female.

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CEO tenure

More than a third (37%) of the CEO changes made in the past year saw the former CEO in place for less than three years. This excludes Boux Avenue, which had no CEO prior to Michael Kerr’s appointment.

The 16 companies that previously had its CEO for

less than three years were: B&Q, Boots, Charles

Tyrwhitt, Clarks, Crew Clothing, Hobbycraft, House

of Fraser, Joseph, Lacoste UK, LK Bennett, Nisa,

Notonthehighstreet, Pets at Home, The Range,

Screwfix and Whistles. Of these 16 companies,

with a couple of notable exceptions, the majority

have seen rapid change at the top as a result

of company performance/restructuring and/or

friction between investors/owners and the CEO.

In some of these cases, the CEO seat has

changed at least twice in the past three to

four years – at B&Q, Screwfix, LK Bennett, Nisa,

Pets at Home, Hobbycraft, House of Fraser and

Whistles. This churn reflects a combination of

factors, but in particular trading performance

and/or ownership change.

of CEO changes in the last year

saw the former CEO in place for

less than three years

37%

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Functional heritage of the CEOs appointed in the past 12 months:

Of the CEOs appointed in the past 12 months, 46% (19/41) came from a

Commercial/Sales or Trading/Buying and Merchandising background. These

included: Helen Wright (Belstaff), John Lyttle (Boohoo), Michael Kerr (Boux

Avenue), Melinda Paraie (Cath Kidston), Kenny Wilson (Doc Martens), Liz Evans

(Fat Face), Suzanne Harlow (Jack Wills), Barbara Campos (Joseph), Jamie Givens

(Lacoste UK), Erica Vilkauls (LK Bennett), Lorenzo Moretti (Office), Simon Pickering

(Phase Eight), Anne Pitcher (Selfridges) Jason Tarry (Tesco UK), Kari Daniels (Tesco

Ireland) and Helen Williamson (Whistles).

Twenty-two per cent (9/41) came from a Retail/Operations background, including

Graham Bell (B&Q), Michael Stanier (Charles Tyrwhitt), Dominic Jordan (Hobbycraft),

Javier Quiñones (IKEA UK) and Peter Pritchard (Pets at Home). And 10% (4/41) had

a formative career in Brand Marketing, namely: Anthony Davey (Farrow & Ball), Adil

Mehboob-Khan (Liberty of London), Barrie Seidenberg (Notonthehighstreet) and Hash

Ladha (Oasis/Warehouse).

In a marked shift from last year, only 15% (6/41) came via the Finance route into general

management – In 2017, those from Finance and Strategy backgrounds combined made

up 30% of the total of CEOs appointed. Perhaps this indicates a change in view – that

cost restructuring alone will not solve the sector’s issues and that a greater focus

on product, commercial trading and merchandising will be required to navigate the

challenges ahead.

Functional Background of the CEOs Appointed

Operations

Finance

Marketing

Strategy

Commercial/Buying/Merchandising

Other

2%

5%

15%46%

10%

22%

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Internal promotion to CEO

In the past 12 months, the number of CEOs appointed as a result of internal promotion was broadly similar to the previous year – 41% versus 40%.

The year before, many of the internal appointments were

the drafting in of an existing Chairman or NED to be

caretaker of the CEO seat at a time of change. This year,

the vast majority of the internal appointments made

(17/41) were as a result of either internal promotion or an

internal reshuffle. These included Giles Hurley at Aldi UK,

Tim Stacey at DFS, Justin Hampshire at Hobbs, Helen

Williamson at Whistles, Javier Quiñones at IKEA UK,

Terry King at Oak Furniture Land, Hash Ladha at Oasis/

Warehouse, Peter Pritchard at Pets at Home, Anne Pitcher

at Selfridges Group, Jason Tarry and Kari Daniels at Tesco,

and Onur Köksal at Vision Express.

Internal Promotion to CEO

Internal External

59%

41%

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Inside or outside of sector?

As in 2017, the prevailing trend has been to recruit from within

Retail. Of the 41 appointments made in the past 12 months,

only three came from outside the sector, and all of these

came from Leisure, Gaming or Entertainment. This may be

in order to bring in critical knowledge from sectors which

are both adjacent to Retail, but also considered to be

more advanced in their digital approach. These appointees

were Henry Birch, moving from Betting/Gaming to Shop

Direct, Barrie Seidenberg at Notonthehighstreet (formerly

in Online Travel), and Jamie Martin at Ideal Shopping

(formerly in Broadcasting/Media).

International CEO appointments Similar to 2017, during 2018 the number of CEOs appointed

from outside the UK was low – only six out of 41 (15%).

This is in stark contrast to five years ago when we saw

14 non-British CEOs appointed in the year.

The international (non-British) CEOs appointed last

year were: Melinda Paraie at Cath Kidston (background

at Coach in the USA), Javier Quiñones at IKEA UK

(internal move), Barbara Campos at Joseph (French,

from a Luxury background), Barrie Seidenberg at

Notonthehighstreet (American, from Online Travel),

Lorenzo Moretti at Office (Italian, formerly Nike

and Gap), and Onur Köksal at Vision Express

(Turkish, an internal transfer from the Grand Vision

parent company).

out of 41 appointments came from outside the

retail sector over the past 12 months

out of 41CEOs were appointed from outside

the UK in 2018

36

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Company Name New CEOs announced as appointed during 2018

Aldi UK Giles Hurley

AllSaints Pete Wood

B&Q Graham Bell

Belstaff Helen Wright

Boohoo John Lyttle *

Boots Sebastian James

Boux Avenue Michael Kerr

Cath Kidston Melinda Paraie

Charles Tyrwhitt Michael Stanier

Clarks TBA

Crew Clothing David Butler

DFS Tim Stacey

Dixons Carphone Alex Baldock

Dr Martens Kenny Wilson

Farrow & Ball Anthony Davey

Fat Face Liz Evans *

Hobbs Justin Hampshire

Hobbycraft Dominic Jordan

House of Fraser TBA

Ideal Shopping Direct Jamie Martin

IKEA Javier Quiñones

Jack Wills Suzanne Harlow

Company Name New CEOs announced as appointed during 2018

Jigsaw Chris Stephenson

Joseph Barbara Campos

Lacoste UK Jamie Givens

Liberty London Adil Mehboob-Khan

LK Bennett Erica Vilkauls

N Brown TBA

Nisa Ken Towle

Notonthehighstreet Barrie Seidenberg

Oak Furniture Land Terry King

Oasis & Warehouse Group Hash Ladha

Office Lorenzo Moretti

Pets at Home Peter Pritchard

Phase Eight Simon Pickering

Screwfix John Mewett

Selfridges Group Anne Pitcher

Shop Direct Henry Birch

Tesco UK Jason Tarry

Tesco Ireland Kari Daniels

The Range Chris Dawson

TM Lewin Sven Gaede

Vision Express Onur Köksal

Whistles Helen Williamson

Listing of Retail CEO changes during 2018

*Appointed and announced during 2018 but will start in role during 2019.

Overall outlook for 2019

Despite its challenges, 2018 was a more stable year in terms of CEO changes, with considerably fewer moves than in the previous year. It remains to be seen whether this is the calm before the storm. With 2019 looking to be a year of heightened uncertainty – particularly the first half – we predict a high level of CEO changes. Fasten your seatbelts: a rollercoaster of a ride beckons in 2019…

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About Korn Ferry

Korn Ferry is a global organisational consulting firm. We help companies

select and hire top leaders to grow their businesses to maximise shareholder

return. Furthermore, we help them design their organisation – the structure,

the roles and responsibilities, as well as support how they compensate,

develop and motivate their people. Our approximately 7,000 colleagues

serve clients in more than 50 countries.

UK Retail CEO Tracker 2019 - Korn Ferry

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