UK RETAIL CEO TRACKER 2020 - Overall CEO turnover reached a seven year high in 2019, with Retail CEO churn increasing 25% on the previous year - AWS
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UK RETAIL CEO TRACKER 2020 Overall CEO turnover reached a seven year high in 2019, with Retail CEO churn increasing 25% on the previous year.
UK RETAIL CEO TRACKER REPORT 2020
2020 KORN FERRY
UK RETAIL CEO TRACKER
BY SARAH LIM
2020 marks a new dawn for the UK. Following
on from 2½ years of political uncertainty, the
resounding election result in December 2019
sees the start of a new chapter both for the
country, and the economy. At the end of 2019,
we saw the FTSE 100 up 12% over the year;
the biggest annual gain since 2016 (the year
of the referendum), with one in five Britons
expecting to be richer by the end of 2020.
(YouGov report, 23 December 2019).
Despite the challenges ahead in ‘getting Brexit done’,
there appears to be renewed confidence that we enter AUTHOR
the next decade with greater optimism. Maintaining this Sarah Lim
level of confidence, and ensuring there is forward visibility Managing Director & Sector Lead,
on the plans for a well-managed exit from the EU is going Retail, EMEA
to be critical for the ongoing transformation of the Retail
Korn Ferry International
industry, which saw the toughest year in living memory
in 2019, surpassing even that of the 2008 crisis. CONTRIBUTOR
As we head into a new decade, one thing is for sure; Zoe Duke
Retail will change unrecognisably over the next ten
years and so those who lead our industry will need to
do so too. This is the 8th Annual UK Retail CEO Tracker
report, which tracks the changes in CEO moves across
the industry, category by category and year on year.
We hope you enjoy reading it.
3
2020 UK RETAIL CEO TRACKER
7 YEAR HIGH
IN THE TURNOVER
OF RETAIL CEOS
At the start of 2019 we predicted a higher number
of changes of Retail CEO in the year ahead, and
so this indeed proved to be the case. During 2019,
the last twelve months saw the greatest level of
CEO churn in Retail since 2012; increasing 25%
on the previous year.
Introduction
For the Retail sector, 2019 was the most difficult year in over
a decade; perhaps longer. At a macro level, the UK economy
slowed during the second half of 2019, from 0.3% GDP in the
third quarter, to a predicted 0.2% GDP in the fourth quarter
of 2019, yet Retail has suffered far more acutely in the past
year than other industry sectors.
The past year saw a perfect storm, created by ongoing digitalisation and
changes to consumer shopping behaviour; wavering consumer confidence;
continued uncertainty throughout the year over Brexit; a pending general
election toward the end of the year; ongoing challenges of rent and
business rates; and rising costs as a result of the weakness of sterling.
All of this compounded to create Retail’s ‘Annus Horribilis’ in 2019, resulting
in profit warnings, a further spate of CVA’s and a number of high profile
high street names finally going into administration, including Debenhams,
Mothercare, Clinton Cards, Karen Millen, Jack Wills, LK Bennett and
Bonmarché, to name a few.
It is perhaps not surprising therefore, that the sector response has been to
change out the CEO. The industry has seen an unprecedented number of
changes at the top over the past year, with CEO change rising 25%, from
44 in 2018 to 55 in 2019. This is the highest churn since 2012, when the
number of changes was 56 in a single year.
The Annual Retail CEO Tracker tracks changes in CEO appointments
year-on-year which have taken place in the last 12 months, analysing
over 200 retailers/brands operating across the UK and Ireland, across
all categories. It covers all major brands and retailers, online and physical
retailers, for companies whose revenues are at least £50m per annum, or more.
4
UK RETAIL CEO TRACKER REPORT 2020
Macro factors affecting the sector:
• Continued political and economic uncertainty relating to Brexit
• Digital transformation; physical stores to online and increased use of
AI and robotics
• An uneven playing field relating to taxation between bricks and mortar,
and online retailers
• Business rates and cost of rent continuing to have serious impact
• Other costs – labour, currency and preparation for Brexit
• Fragile consumer confidence and potential impact on consumer
spending, but hopes for improvement during the year ahead
25% 55
rise in CEO change in 2019 changed seats, up from
24
internally promoted
44 the previous year CEOs this year
5 notable findings from this year’s Annual Retail CEO Tracker:
• There were a significantly higher number of CEO changes last year (55) compared
with the number in the previous year (44) – up 25%
• 38% of CEO changes saw the former CEO in seat for less than 3 years. This is another
increase on the previous year
• 21% of newly appointed CEOs came from a Finance background last year, compared
to only 15% in the previous year
• The percentage of female CEOs appointed has remained strong at 23% of the
total, but the number of women running publicly quoted retail companies has
significantly dropped
• More CEO changes occurred within the sectors of Fashion, Luxury and Apparel
than in any other category. Of the 20 CEOs appointed, 12 were internally promoted,
showing a reversal in trend on the previous year
7 year trend in number of Retail CEO changes
2019 saw the greatest number of CEO exits in 7 years, reaching 55 exits in the full year.
2012 2013 2014 2015 2016 2017 2018 2019
56 44 32 45 41 50 44 55
5
OVERALL CEO appointments by sub sector
SUMMARY
CEO changes in the 43% 8%
last 12 months
Compared to the previous year,
2019 saw a significant rise in the
number of Retail CEO changes, 13%
with 55 announced, versus 44 in
2018. Like last year, the sub-sector 6% 9%
with the most significant number 21%
of CEO changes was Fashion,
Luxury and Apparel at 43%
(see further note below).
Fashion, Luxury and Apparel Pureplay
Of the total number of CEO exits,
Department Store Grocery
there are 9 CEO seats presently vacant,
Home and Garden Other
for whom a replacement has not been
announced; 1 will not be replaced
(Bonmarché); 6 are yet to be confirmed
if the CEO will be replaced on a like-for-
like basis (Boden, Harvey Nichols,
Jigsaw, Monsoon Accessorize, Argos Specific sector note – Fashion,
and Topshop) and 2 are yet to announce Luxury and Apparel
details of the new CEO (Matchesfashion
and Ted Baker). In 2019, more CEO exits came from
Only 7 of the 55 companies who changed the Fashion, Luxury and Apparel
out their CEO are owned or part-owned sub-sector – 20 in total which
by private equity/VC funds including represented 43% of all CEO changes.
Alteri (Apollo), Apax, Bridgepoint,
Of the 20 CEOs appointed in Fashion, Luxury
Paloman Capital, L1 Retail & Electra,
and Apparel, 12 of the 20 were internally promoted,
highlighting the ongoing shift away
including New Look (Nigel Oddy), George @ Asda
from the Retail sector by private equity
(Steph Strike), Charles Tyrwhitt (Luke Kingsnorth),
investors. 25 of the companies are
Figleaves (Jenni Burt), N Brown (Steve Johnson),
private/family/member owned, and the
Oasis (Sarah Welsh), Office (Kerry van der Merwe),
remainder are either publicly quoted,
Sweaty Betty (Julia Straus), Ted Baker (Lindsay
or part publicly quoted companies.
Page – promoted and then exited later in the year),
Many changes were driven as a result of Warehouse (Paula Stewart). This is in stark contrast
poor trading performance for example to last year, where 75% of the CEO appointments
Shoe Zone, M&S (Clothing and General in that sector came from outside the company.
Merchandise), Office, and/or Owner/
The 8 CEOs appointed externally were: Clarks
Founder intervention, for example at
(Giorgio Presca), Hotter Shoes (Ian Watson),
AO.com, Boden, Superdry, Charles
Joules (Nick Jones), LK Bennett (Darren Topp –
Tyrwhitt, Clarks, Ted Baker; and/or
who returned to the brand), Marks & Spencer
broader CEO succession planning,
(Richard Price – to start later in 2020), Net a Porter
for example at SSP, Topps Tiles or
(Nicola Brandolese), River Island (Will Kernan)
River Island.
and Stella McCartney (Gabriele Maggio).
6
UK RETAIL CEO TRACKER REPORT 2020
Top CEOs to watch
Top appointments ‘to watch’ over the next
year: Ken Murphy, who steps into his first
CEO role when he takes over the reins from
Dave Lewis at Tesco later this year; Thierry
Garnier, who took over as Group CEO of
Kingfisher Group in September with a brief to
turnaround the ailing fortunes of the Group;
and Dame Sharon White, who will join the
John Lewis Partnership in early 2020 to lead
the John Lewis and Waitrose businesses as
part of its new merged partnership structure.
The other key Grocery sector appointments to watch
will be Mel Smith at Ocado Retail, who took the helm as
the newly appointed CEO of the new Ocado/M&S joint
venture in the summer of 2019. This promises to be a
game changer for M&S, as Ocado transitions out of its
longstanding partnership with Waitrose later this year.
Within Fashion, attention will be on high profile
turnaround agendas: Nigel Oddy as he steps up into
the CEO role at New Look; Ian Grabiner as he seeks to
make Topshop relevant again; and Will Kernan as he
looks to rejuvenate River Island’s fortunes and put
digital at the heart of its agenda.
In Department Stores, many will be watching to see
if Stefaan Vansteenkiste, the non-retail restructuring
expert, can perform the miracle needed at Debenhams,
and Richard Price when he arrives later in the year to
take on Jill McDonald’s former role at M&S.
Percentage of ‘Vacant’ CEO seats
Notable other appointments within Home & Garden
beyond Kingfisher Group in the last year were: Nick
Roberts who joined Travis Perkins as Group CEO in
July; David Wood, who leads the charge at Wickes
and its carve out from Travis Perkins, with a planned
IPO on the cards for Q2 2020; and Rob Parker at
Topps Tiles, who succeeds long-term CEO Matt 15%
Williams as his internal successor.
Pureplay CEO changes continued apace last year, with
the appointment of Nicola Brandolese at Net A Porter;
Sarah Miles at Feelunique; Steve Johnson at N Brown;
Jenni Burt at Figleaves; Nick Devlin at Naked Wines;
Claire Davenport at notonthehighstreet; and Ross
Clemmow at Wiggle.
Finally, it will be interesting to watch those retailers
85%
whose founders returned to the helm in the past
year. Whilst largely fashion sector led, this wasn’t
exclusively so. Ones to watch include AO.com with
John Roberts return a year ago; Julian Dunkerton
at Superdry; and the combination of Founder and Filled
Executive Chairman in Johnnie Boden and Julian Vacant
Granville at Boden.
7
Changes in female CEO appointments Female representation
at the top
There was no material increase in the number of
female CEOs appointed last year to the year before;
11 newly appointed in 2019 versus 10 in 2018, out of
the 47 confirmed CEO appointments – just under
25% of the total.
77%
MALE
11 female CEOs were
appointed in the last 12 months.
23%
FEMALE
First time CEO
49% 51%
No
Yes
8
UK RETAIL CEO TRACKER REPORT 2020
In the last 12 months, the 11 female CEOs appointed
were: Steph Strike at George @ Asda; Sarah Miles
at Feelunique; Jenni Burt at Figleaves; Dame Sharon
White at the John Lewis Partnership; Claire Davenport
at notonthehighstreet; Sarah Welsh at Oasis; Mel Smith
at Ocado Retail; Kerry van der Merwe at Office; Louise
Hoste at Spar UK; Julia Straus at Sweaty Betty and
Paula Stewart at Warehouse.
Of these 11 appointments, with the exception of Dame
Sharon White, Julia Straus and Claire Davenport, all
were ‘step up’ candidates into their first true CEO role.
At a wider industry level, of concern has been the
noticeable attrition rate of female CEOs from the listed
company arena, and/or female CEOs running retail
businesses of significant scale and complexity over
the past year. Those of note include Kate Swann, Helen
Connolly, Angela Spindler and Jill McDonald, to name
a few. Reasons vary, including decisions to ‘go plural’
and pursue non-executive careers; opting to move out
of the limelight of the listed company CEO role and/or
a desire to move out of the Retail sector altogether.
Irrespective, these are regretted losses for the industry.
Today, the only listed company female CEO of scale
remaining is Karen Hubbard; CEO at Card Factory.
9
CEO tenure
38% of the CEO changes made in the past
year saw the former CEO in seat for less
than 3 years. This represents a further
increase on the year before, illustrating
the growing rate of change in CEO
appointments year-on-year.
In 80% of these companies, the change in CEO
has been driven by company performance. These
20 companies are: AO.com, Bathstore, Charles
Tyrwhitt, Clarks, Debenhams, Figleaves, Hamleys
(who have seen their last two CEOs leave in under
3 years), Harvey Nichols, Jigsaw, LK Bennett,
Marks & Spencer (General Merchandise/Clothing
Division), New Look (Executive Chairman stepped
back), Net a Porter, notonthehighstreet, Office,
Signet Jewellers (UK Division), Ted Baker, Topshop
and Wiggle.
34%
of CEOs appointed in the
past year from Commercial/
Sales or Trading/Buying and
Merchandising backgrounds
6%
increase of CEOs from a
Finance background this year
10UK RETAIL CEO TRACKER REPORT 2020
Functional heritage of the CEOs appointed Functional background of CEOs
in the last 12 months appointed in the last year
34% of all the CEOs appointed in the past year
came from Commercial/Sales or Trading/Buying
and Merchandising backgrounds. This was a
marked drop from the year before which saw
46% from Buying and merchandising/Trading
functional route up into the CEO seat. The 15%
Fashion and Apparel sector saw a greater 34%
propensity for CEOs from a classic Buying 11%
and Merchandising/Trading background.
21% came up through the Finance/CFO route into
the CEO seat; – a marked rise from the previous year,
where previously those CEOs from Finance backgrounds 21% 13%
made up only 15% of the total of CEOs appointed.
Notable former Finance Directors include: Ken Murphy 6%
(Tesco), Tony Buffin (Holland & Barrett), Steve Johnson
(N Brown) and Stefaan Vansteenkiste (Debenhams).
This rise is highly indicative of sector stress, at times
where the focus has shifted toward strong financial
Commercial/Buying/Merchandising Marketing
management, debt restructuring, management of
Strategy Finance
City/investor relationships etc.
Operations/Retail Other
15% of the CEOs appointed came from Strategy
backgrounds. Particularly noticeable was the
prevalence of CEOs appointed into Pureplay
roles from a Strategy background, namely
Mel Smith at Ocado Retail (formerly McKinsey),
Ross Clemmow at Wiggle (formerly Bain), Claire
Davenport at notonthehighstreet (formerly Head
of Strategy at Skype & Ofcom), Sarah Miles at
Feelunique (formerly Gemini) and Nick Devlin
at Naked Wines (formerly OC&C).
13% of the CEOs appointed came from a Retail/
Operations background. This was a marked
decrease from 22% in the previous year.
11% of the CEOs appointed had a formative
career in Marketing, representing a 1%
increase from the previous year.
11Internal promotion to CEO
In 2019 we saw a reversal in trend with 51%
of CEOs appointed as a result of internal
promotion, versus 41% in the previous year.
This was a marked increase and was the
first time in 3 years that more CEOs were
appointed internally (51%), than externally
(49%). With a few notable exceptions, the
vast majority of the internal appointments
made were as a result of ongoing
succession planning.
Internal promotion to CEO
51%
INTERNAL
49%
EXTERNAL
12UK RETAIL CEO TRACKER REPORT 2020
Inside or outside of sector?
The trend to recruit FROM the industry FOR the industry
continued in the last 12 months. With the exception of Dame
Sharon White (formerly Ofcom), Nick Roberts (formerly Atkins)
and Stefaan Vansteenkiste (formerly Alvarez & Marsal), all CEOs
appointed had demonstrable experience in a relevant retailer
or brand (online or offline) prior to their present appointment.
International CEO appointments
2019 saw a slight increase in percentage (17%) of international
(non-British) CEO appointments from the previous year – only
8 out of the 47 CEOs hired. Those appointed were: Giorgio Presca
(Clarks), Stefaan Vansteenkiste (Debenhams), Summet Yadav
(Hamleys), Thierry Garnier (Kingfisher), Nicola Brandolese
(Net a Porter), Jose Ramon Finch Castro (O&CC), Gabriele
Maggio (Stella McCartney) and Julia Straus (Sweaty Betty).
13OVERALL OUTLOOK
FOR 2020
2019 was a tumultuous year for Retail, resulting in significant
changes at the top, with more CEO changes than in any year
since 2012.
Whilst 2020 will remain challenging, there is room for cautious optimism in
the year ahead, as Brexit uncertainty lifts under a ‘pro-business’ government.
For the first time in 3 years, retailers will be able to start to plan ahead for
new investment and future growth, as we herald the start of a new decade
of greater prosperity. We predict a slowing in the rate of CEO change in
the year ahead, but a heightened demand for CEOs with greater online
and digital credentials as retailers accelerate their shift to online.
40
At least new Retail CEOs
announced as
appointed during 2019.
14UK RETAIL CEO TRACKER REPORT 2020
Listing of Retail CEO changes during 2019
Company Name New CEOs announced Company Name New CEOs announced
as appointed during 2019 as appointed during 2019
AO.com John Roberts New Look Nigel Oddy *
ASDA George Steph Strike Net a Porter Nicola Brandolese
Bathstore Ian Penney notonthehighstreet Claire Davenport
Boden TBA O&CC Jose Ramon Finch Castro
Bonmarché N/A (Company Administration) Oasis Sarah Welsh
BrightHouse Anth Mooney Ocado Retail Mel Smith
Charles Tyrwhitt Luke Kingsnorth Office Kerry van der Merwe
Clarks Giorgio Presca River Island Will Kernan
Debenhams Stefaan Vansteenkiste Sainsbury's Argos TBA
Feelunique.com Sarah Miles Shoe Zone Anthony Smith
Figleaves Jenni Burt Signet Jewellers UK Neil Old
Hamleys Yong Shen Space NK Andy Lightfoot
Harvey Nichols TBA Spar UK Louise Hoste
Holland & Barrett Tony Buffin SSP Group Simon Smith
Hotter Shoes Ian Watson Superdry Julian Dunkerton
Jigsaw Toby Foreman Stella McCartney Gabriele Maggio
John Lewis Partnership Dame Sharon White * Sweaty Betty Julia Straus
Joules Nick Jones Ted Baker TBA ( Lindsay Page previously
appointed; subsequently
Kingfisher Thierry Garnier exited in the year)
LK Bennett Darren Topp Tesco Ken Murphy *
Majestic Wine John Colley Topshop TBA
Marks & Spencer Richard Price * Topps Tiles Rob Parker
Matchesfashion.com TBA Travis Perkins Nick Roberts
Monsoon TBA Warehouse Fashions Paula Stewart
Morley Stores LTD Nigel Blow WHSmith Carl Cowling
N Brown Group Steve Johnson Wickes David Wood
NakedWines.com Nick Devlin * Wiggle Ross Clemmow
* Appointed and announced during 2019; will start in role during 2020
15About Korn Ferry
Korn Ferry is a global organisational consulting firm. We work with organisations to design their
organisational structures, roles, and responsibilities. We help them employ the right people and
advise them on how to reward, develop, and motivate their workforce. And, we help professionals
navigate and advance their careers.
Our 8,600 colleagues serve clients in more than 50 countries. We offer five core solutions.
• Organisational Strategy
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• Talent Acquisition
• Leadership Development
• Reward and Benefits
Visit kornferry.com for more information.
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