You began your career very conventionally, in audit. Presumably you felt no great entrepreneurial stirrings in those early days?
No, I suppose not. I came out of university in the mid-1970s and, like now, it was not a great time for graduate employment. The big eight, as they were then known, were the only organisations hiring in any great numbers. I was influenced by my parents too. My father had his own business and had a really tough time of it. My mum got very ill and I didn’t want to be a burden. So I elected to play it safe and went to Arthur Anderson, which was a terrific firm, and I don’t feel I lost anything by doing that. Quite the reverse, actually. During my three years in audit and four years in consultancy, I got a great, rounded understanding of business.
Was there any point along the path into financial management when you were conscious of developing a broader business mindset?
I have always been of the view that the finance function is the most important function after the trading entity of a business. To my mind, finance people contribute most when they are actively involved in commercial decision-making. Reviewing monthly management accounts is all fine and dandy, but that’s history, frankly. You want to influence the future direction of a company rather than just comment on its past.
You spent the biggest chunk of your career at Selfridges, working alongside a charismatic CEO in a business that, by definition, had to be fleet of foot. Was that a very demanding environment?
I joined Selfridges in the very early 1990s and it was an old fashioned, fuddy-duddy store – a real Grace Brothers. Not much money was spent on it. Then in 1991 we started this huge refurbishment programme, opening up the space, moving the emphasis towards fashion and becoming a house of brands. The aim was to completely rejuvenate the place. It was an exhilarating process to be part of. At the beginning, everyone pooh-poohed us, but in the 13 years I was there the business became something really fantastic, which is what you see on Oxford Street today.
Married with this exciting process, presumably you had to grapple with the usual financial challenges, like keeping an iron discipline around cash?
We spent £93m over a five-year period. That was the capex bill. Previously Sears, as the owners, were spending around £5m annually. In order to keep that level of investment going we had to look very carefully at where we were spending, how we were spending, what the sales uplifts were, and all the rest. It didn’t happen overnight. We had to change people’s shopping habits.
A lot of people who should have been shopping at Selfridges were shopping in Knightsbridge. Mohammed Fayed helped us a fair bit there, of course, but we still had to change perceptions and that took time. In that sense, while we did have to keep financial discipline, we were actually being incredibly entrepreneurial. We had to believe that there would be this halo effect at the end of it all. And ultimately that is what happened.
What are the particular challenges of working in retail?
Retail, to me, is fascinating. I am a consummate shopper. I love that environment. What I like about it in particular is that you know almost immediately if you have screwed up or if you have succeeded, and in many cases you can make changes quickly.
The customer is in there, every morning, telling you what they think of your store. If you don’t get it right they will walk out and go somewhere else, or go online. There is more product out there than anyone needs. The consumer is understandably promiscuous. The fact that a number of retailers these days are not only going into administration but are disappearing, like Comet, is evidence that after a period of time, if the sick don’t get better they die, and new things come along.
How did the shift to CEO happen? Did you always have the feeling that you had what it takes to take charge?
I had always hankered after running a business and with a business like Selfridges, what’s not to like? When the opportunity did arise, I was fortunate. Our chairman came to me a year or so before the chief executive was due to leave and said: “you are the only possible internal candidate, but right now you are Dr No, the finance director, and we need to help you become the natural choice for CEO.”
I took on more responsibility for capital projects and went off to Harvard for courses. They gave me an external coach to help me understand how I was seen from the outside, so when the change came it was no real surprise to anyone and I felt confident taking over.
Post-Selfridges you have been involved in a few turnarounds. What lessons have you learnt?
I have been around the block a few times, so I don’t get too freaked out taking on these turnaround things. Earlier in your career you tend to worry about the impact on your CV, but you need to remember you didn’t create the problem – you are simply trying to solve it. The other thing is that I aim to operate at the sunnier end of the turnaround spectrum, with the wounded but not dying, if it is possible to make that distinction at the outset.
For me, it is an interesting challenge. You are able to do more things quickly. A company I was involved in a few years ago was Blacks, and that is a business that now has a future. Unfortunately, to get it to that point we had to take it through a pre-pack, which isn’t great from an equity point of view and for some of the suppliers. There were 4,500 people working for this company, so I am not put off by these things, but it is very hard work.
At the other end of the spectrum you are now also involved with ASOS, which is a fantastic success story. What are the challenges for the finance team in an explosive situation like that?
ASOS is a terrific business. It’s a fantastic British success story in the new world of internet retail. I joined as non-exec seven years ago when turnover was about £30m. It’s now £550m and that alone is a challenge. How do you keep the wheels on the truck as it zooms off down the hill? It’s a great tribute to the team, that while they have gone on this land grab for customers, brands and territories, the finance systems and logistics have been able to keep pace.
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