In March last year I wrote an armchair CEO’s review of the situation at the top of Mothercare. Simon Calver had been replaced by Mark Newton Jones and my general thrust implied that Mr Calver had been a seed of digital business acumen that had fallen on barren ground.
Looking back on Mark Newton Jones’s success in turning around this business against some very strong headwinds, I think my conclusion should have been subtly different. Simon Calver was pushed out after a slew of bad results around Christmas trading. Like many other retailers that Christmas, Mothercare had panicked and slashed prices way too early. This had nothing to do with whether Simon Calver was a digital CEO but far more to do with his experience of retail and his ability to override the retail ‘experts’ (obviously I wasn’t there so I am being very presumptuous!). One of my points was that it is not good enough to just shove in something or someone “digital” and expect that everything will turn out rosy.
The results announced today do seem to bear this out but probably the narrative (narrative - noun: to post-rationalize facts to fit a nice story that humans will believe is true) is really that you need to blend digital skills, techniques and methodologies with good old sector experience. Mark Newton Jones not only came straight from the most impressive digital retail turnaround in the country – Shop Direct - but also with a long track record of success in retail in general.
So, what has Mark Newton Jones actually achieved? Firstly, let’s acknowledge that some of his success must be seeded in changes instigated by Simon Calver. Secondly it is important to note that it is a messy picture to read with many different markets and lots of currency fluctuations. Thirdly, the company has clearly learned its lesson and it has managed to avoid premature discounting.
However, from our point of view the most impressive element is the on-line sales growth. Over the last 13 weeks it reports a 16.1% rise in digital channel sales with this now accounting for almost 32% of their total sales in the UK. Pretty impressive in a highly competitive sector that must be under huge pressure from the one or two competitors like Amazon.