Mothercare CEO Simon Calver reveals his turnaround strategy
Earlier this week I attended an in conversation with event at the Institute of Directors where we were treated to the insights and experience of Simon Calver, CEO of Mothercare. By Emma Gamble
As well as discussing his 7 years at LOVEFiLM Simon was reflecting back on the 18 months since he took the helm at turnaround business Mothercare.
A new father of a 6 month old baby in early 2012 Simon had experienced what Mothercare had to offer first hand and had been thoroughly unimpressed. After his experience he pro-actively tracked down the head-hunter working with Mothercare at that time and announced ‘I’m your guy’(yes -sometimes we get the call as opposed to calling you). After a few meetings he had managed to convince the key stakeholders that despite his mostly digital background that he would be the one to lead the business back to greatness.
In his talk earlier this week Simon was unable to discuss financials but with Mothercare’s interim results released this morning, we can see that overall the group has moved back into the black with the international arm delivering the profit. Even after 18 store closures last year, the UK has yet to deliver.
At present around 25% of its’ UK sales are now made via their website either for home delivery or through the increasingly popular option of click and collect. Upon questioning, he stated that the route to survival would be through product differentiation and using their 230 UK stores as a competitive advantage. ‘Restricting price comparison is important’ emphasising that growing the proportion of Mothercare own label across toys, travel and clothing, would be a key part of future strategy.
Simon felt that ‘the supermarkets are by far the biggest threat to Mothercare due to their entry level price points’, with no mention, surprisingly, of Kiddicare or John Lewis.
Mothercare currently has no loyalty scheme, a point that was not lost on an audience that seemed to be filled with relatively new parents. Simon outlined the journey of the first time parent and spoke of the obvious opportunities for Mothercare to communicate with parents through weaning, first birthdays, potty training etc. We were told that their ‘CRM and database capability is being worked on’ and to ‘stay tuned’ regarding a loyalty scheme.
The old fashioned mystery shopper scheme was shown the door after Simon joined Mothercare, being condemned as a far from accurate way to measure customer satisfaction. Instead a programme called ‘My Customer’ was introduced with customers being able to deliver real time feedback to stores and an updated store feedback score available to Store Managers every hour. On a five point scale, Mothercare debuted at 60% of customers grading ‘highly satisfied’ (the highest score of 5). Understandably this was not good enough and was a shock to many of the Store Manager population. Through analysis and some intensive in-house re-training, they raised that score to 78% within 12 months and are now aiming for the high achievement industry benchmark of 80%.
When asked about how he is establishing his new team, Simon reminded us of an industry leading quote which sorts the truly great business leaders from those too entrenched in their own failings, ‘First division people hire first division people and those in second division hire third division people’.
This is a good note to finish on as I have seen prime examples of the latter in the Retail Industry through ten years of Executive Search and sadly it is more common than most would think. Don’t be afraid to hire brighter and better people than you, if you lead them and look after them well they will only make you look good!
Simon Calver has recently published a book on his time as CEO of Lovefilm ‘Success the LOVEFiLM Way: How to Grow a Fast Growth Business in Fast Changing Times’. It promises to be a good read.
Emma Gamble, Director of Gamble & Yeates Executive Search in Retail.
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