Those who know me know that I’m passionate about the UK as a nation of shopkeepers. There’s nothing I love more than speaking to and learning from a true merchant – someone who deeply understands their customer and is passionate about their product.
Stuart Machin, CEO at M&S, is one such leader. Stuart began his career on the shop floor as a teenager, and is now using the lessons he learnt as a merchant to steer M&S through this exciting phase of growth. Clearly, Stuart believes in the benefits of merchant experience for future leaders: last month, the retailer announced plans to refresh its early careers programme to encourage participants to learn from the shop floor.
“I want others to benefit from the experience retail can offer – just like I did,” Stuart wrote in a blog post. “And I want M&S to recruit its next generation of leaders, armed with the same knowledge, skills, and entrepreneurial spirit I picked up from working my way up the retail ladder. That’s why we’re reshaping our recruitment to put our stores and M&S colleagues up-front, as well as attracting the very best graduate talent.”
This is an exciting development – and one that feels increasingly necessary in the fast-moving fashion and general merchandise space. When once news cycles were defined by the collapse of high street titans such as Debenhams and Arcadia, today’s headlines tell a story of rapid consolidation from listed retail groups. Frasers Group, Next and JD Sports are leading the shift: between them, they’ve made 15 major acquisitions of high street fashion brands in the past two years.
The success of listed UK retail groups is certainly a good thing, and many of the moves we’ve seen over the past year have saved companies from bankruptcy or administration. But what does this mean for the talent and leadership landscape? As the market consolidates, where will our retail leaders of the future come from? And specifically, will there be enough expert merchants to spearhead our industry into its next chapter?
I’ve always believed that some of the best fashion retail leaders are merchants first and foremost. Gained through experience on the shop floor as well as in head offices, merchants have a firm grasp on how take the fundamental retail principles and apply them in a fashion or general merchandise context.
“Through experience on the shop floor as well as in head offices, merchants have a firm grasp on how take the fundamental retail principles and apply them in a fashion or general merchandise context.”
Indeed, many of the fashion’s most impactful leaders started out as merchants. Dawn Mello, for example, was a retailer through and through and served as fashion director and president of Bergdorf Goodman. She was the woman responsible for putting Gucci back on the fashion map in 1989 and hired another merchant, Tom Ford, as creative director who was to go on and become one of the most iconic brand owners and retailers of the past thirty years. Similarly, Rose-Marie Bravo was Chief Merchant at Saks Fifth Avenue before being made CEO at Burberry which she ran from 1997 to 2005, paving the way for the brand to become a global fashion player. Angela Ahrendts followed Rose-Marie, and she too was a retailer from DKNY and Liz Claiborne. And Burberry’s current CEO, Jonathan Akeroyd, developed his retailing skills at Harrods from 1989 all the way through to 2004 before being made CEO of McQueen and then Versace. All of these leaders learnt their skills on the shop floor, and then in the buying offices of department stores around the world.
But, over the past decade, the decline of department stores has shrunk the number of training schools and progression pathways available to retail leaders. And now, the retail sector is shifting once again, as listed fashion groups dramatically ramp up their acquisition strategies. Frasers Group has built a diverse portfolio of fully-acquired retail brands, spanning from Savile Row tailor Gieves & Hawkes to fast fashion behemoth Missguided. The group has more than 40 brands under ownership, and in recent months has deepened its influence in fashion ecommerce space, increasing its stakes in Boohoo and ASOS, among other retail brands like AO and Currys.
“Over the past decade, the decline of department stores has shrunk the number of training schools and progression pathways available to retail leaders.”
We’re seeing a similar trend play out at Next. This year alone, the business has snapped up three retailers (FatFace, Reiss and Cath Kidston), adding to its roster of brands which includes Joules and Made.com.
Elsewhere, JD Sports – which owns its namesake sports business as well as a string of others including Size? and Go Outdoors – accelerated European expansion over the summer with the acquisitions of MIG and Iberian Sports Retail. And M&S’ push into third-party brands has included buying Jaeger and giving a financial injection to Nobody’s Child. M&S also took a majority stake in The Sports Edit which enables them to sell their own sports brand, Good Move, alongside Adidas, Nike and Under Armour.
We are already feeling the impact of these changes on the talent landscape. I spend my days talking to retail leaders, and it’s clear from my discussions that the number of roles available in the sector is beginning to shrink as companies restructure and combine newly-acquired teams. Over the summer, for example, Frasers Group announced two separate rounds of redundancies to “streamline processes” following a “period of significant change”.
If the retail industry becomes too dominated by a small handful of large groups, where will all our future leaders come from? If mid-sized retailers – which represent crucial stepping-stone opportunities – become absorbed by major companies, the sector will need to create new pathways to the top.
It is very important that companies in our sector follow the lead of Stuart Machin at M&S to make sure that they put together the best graduate training programmes to make world-class merchants, who will become our future leaders. I’d love to hear from readers on this topic – how do you think our changing retail landscape will impact talent?