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 - AWS
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 2020 - Overall CEO turnover reached a seven year high in 2019, with Retail CEO churn increasing 25% on the previous year - AWS
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
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.

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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 - AWS
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.

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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 - AWS
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
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
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).

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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 - AWS
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.

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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 - AWS
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

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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 - AWS
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.

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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 - AWS
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

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UK 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.

                                                                                                                  11
Internal 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

12
UK 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).
                                                                          13
OVERALL 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.

14
UK 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

                                                                                                                                  15
About 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
 •	Assessment and Succession
 •	Talent Acquisition
 •	Leadership Development
•	Reward and Benefits

Visit kornferry.com for more information.

                                                                         © 2019 Korn Ferry. All Rights Reserved.
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