When the British Woolworth passed from American control in November 1982, most of its staff were shocked. News of the bid battle had only leaked out in the final month when the deal was all but done, with the purchasers running a much more effective PR campaign than the giant company. BBC1s News coverage illustrated that clearly, summarising the deal in their main bulletin with the words "and it does seem that Woolworth will become British-owned".
The Chairman Geoffrey Rodgers, who had fronted the commercials on television in person, had shared news that the economy was tough and that the business had faced challenges, but had balanced this with the headline that "there was good news too" He boasted of the success of the latest Woolco hypermarket format in Newtownards, County Down in Northern Ireland and of plans to open another in Maidenhead to the West of London. The Catalogue Chain Shoppers World was also entering a purple period, having reached critical mass with over fifty stores including a number of new openings in London, and the self-assembly furniture ranges from Homepac and Kwiklok were also a big hit at Woolworth/Woolco, Shoppers World and the new Furnishing World subsidiary.
He was pleased to report that recent acquisition B&Q continued to go from strength to strength. Test-marketing of athletic and leisure shoes at Footlocker in Tamworth and Milton Keynes and Wimpy-like fast food at Burgermaster was also off to a good start. He was particularly pleased by a recent improvement in the perfortmance of the overseas subsidiaries, including 35 branches in the West Indies, 5 in Southern Rhodesia (Zimbabwe) and a huge department store in Nicosia, Cyprus.
Just weeks after sharing the glad tidings, Rodgers was sent on his way along with all but one of the Directors of the Company. With the longest service, at forty-two years since he had begun as a learner straight from school in the new, iconic store on the Promenade at Blackpool, he was allowed to say a brief and emotional farewell, thanking colleagues for their help and loyalty. Within days the new bosses had contradicted virtually all of the recent progress updates. They claimed that, with the exception of B&Q, all the other new initiatives were loss making. Shoppers World was a millstone, the Footlocker Brand had been given back to the Woolworth US Kinney subsidiary as "useless" and Furniture World would either be closed altogether or rolled into B&Q.
The biggest surprise was the decision to close and sell several of the largest stores, including some that had been claimed to be the finest and most profitable in the land. Profits were highest in Scotland, where the Edinburgh flagship dominated the Royal Mile in a prime position on the corner of Princes Street. It was closed not to be sold to another retailer but to be broken up into smaller units. The dominant store in Argyle Street, Glasgow, which had been lovingly rebuilt and renewed after a major fire in the Sixties, faced the same fate, closed followed by the branch in Dundee. Further south, the Oxford store in Cornmarket, which had been designed by a world-famous architect and helped on its way by a man who became Prime Mniister was summarily closed and sold. After resisting the scheme for twenty years, the City's mayor had admitted after opening that it was "a Woolworth's worthy of Oxford". Taking an external perspective, with hindsight the sacrifice of a number of under-valued freehold properties was a shrewd move by the new owners. The cash allowed them to pay off the borrowing required to make the acquisition much more quickly than orginally planned, freeing them to move ahead at pace. But it soon became clear that store sales were addictive and, having agreed to part with a few prime assets, the Directors received increasingly generous offers to sell many more for redevelopment.
Most stores embraced the instructions of the new owners to give every inch of every store a thorough clean, to relay every display and counter to make the gangways wider, while also removing clutter like plinths and cardboard display stands from the aisles with enthusiasm. For a while, as painters were sent in to add a red stripe above the cornice line of the wall counters to create a distinctive new look, and as new department and direction signs arrived and completed the jigsaw, morale started to recover. But it soon became clear that the harder a team worked to clean up, the more likely it was that someone would step in to buy the building, putting them all out of work.
In Autumn 1984 every employee sat in a training room in front of a new TV and video to see a film called 'Customer Care' fronted by the new chairman, John Beckett, who had made his fortune selling British Sugar. His message seemed to make sense. He promised to turn the company round if everyone helped. Days later word spread like wildfire that not content with closing Shoppers' World on the day its new catalogue was released and advertised on TV, he had now sold the Slough store where 'Customer Care' was shot. A venture capitalist had paid 'too much to refuse'. Everyone in the film, from the Manager with a Barclaycard to the boy with the trolley and girl with the smile would be losing their job or begging a nearby branch to "giv'us a job, gov'nor".
Muttering turned to outright anger when, despite earlier denials, the company announced its withdrawal from Ireland. The Woolworth News really had accidentally spilled the beans three months early. Since then the Republic's 270 employees had worked night and day on the facelift, scrubbing and dragging counters into place, only to discover that their stores had been sold from under them and their jobs had gone. John Beckett's only concession had been a few punts extra to go quietly.
For a while all trust evaporated. It would take two years - and a shock hostile takeover bid from a competitor perceived to be worse than the new owners - to get the majority of Managers and Staff back on-side.
You can see the story unfold as it happened in 1984 in the movie below. We've called it 'The Kingfisher Blitz', because, as many people observed at the time, more stores were lost between 1982 and 1988 than had been destroyed, damaged or even grazed by enemy action during World War II between 1939 and 1945. It's presented in the latest HTML5 format, meaning it will play on most devices, but won't take any precious bandwidth unless you click it. The full film is tightly compressed at around 80Mb. Closed captions (subtitles) are available if you enable them in your browser, and if you wish you can click the full-screen icon in the bottom right corner of the Player widget while the 6½ minute film plays.
After the takeover, John Beckett put three former British Sugar Directors in key Woolworth roles. Rodney Lund took on Buying, while Mulcahy held the Finance and Systems portfolio, and Nigel Whittaker became Personnel Director as well as Company Secretary. Other than Lund's brief spell early in his career at Mace (an Irish-owned independent supermarket franchise), none of the sugarmen had any retail experience.
Initially Beckett had to rely on Consultants to develop a strategy to take the Woolworth brand forward, prompting him to bolster the team. As Retail Director he hired Richard Harker from Asda, where over time he had managed a number of portfolios at Board level. Colin Brown, the Deputy MD of Wholesaler Makro and a former Director of Littlewoods was engaged as Commercial, Marketing and Distribution Director. The new joiners took responsibility for testing and refining the strategy. They established store trials and a communication package for Executives, Buyers and the Stores. Roger Jones, the former joint-MD, proved invaluable as an interpreter and guide as the new Directors tried to make sense of the Woolworth bureaucracy and jargon. To complete the jigsaw, real-estate expert Brian Pickering, who had worked at W. H. Smith and M & S, took control of the real-estate at the helm of a resurgent Woolworth Properties Ltd.
The new Cornerstone Strategy proposed by the Consultants and refined by Lund and Brown was an easy sell to the staff, being essentially to "simplify things and do them better" It would accelerate the roll-out of Food and Delicatessen and improve the Clothing. Every Woolworth would carry a core range. Extra ranges would be added according to store size. A multi-core approach promised a bright future in- and out-of-town at Woolco and the City superstores. 'The Woolworth Mall' was launched as a proof of concept in the giant store in Reading Berkshire (No. 111), alongside tests of a medium-sized destination store in nearby Maidenhead (Store 202), and alternative versions in Bedford, Orpington, Stockport, Goole and East Kilbride. The results were respectable, but single-digit growth wouldn't win analysts around to investing heavily in Woolworth when the return from B&Q or acquiring further under-valued businesses was so much higher.
By mid 1985, faced with clamours from major investors, Beckett lost patience with Cornerstone. One Director had outshone the others. As well as being a shrewd FD, Geoff Mulcahy proved an imaginative Systems Director. He had found the money to give the Store and Supply Chain systems a major overhaul, which had dramatically reduced the money tied up in stock, while improving availability to the customer, and control over margins as old stocks and poor sellers were cleared. As well as saving cash, the reforms delivered labour savings which allowed the headcount to be reduced gradually through natural wastage.
Mulcahy was identified as a CEO designate for the parent company and moved to the helm at F.W. Woolworth, as Executive Chairman. He was encouraged to shake-up the Board, bringing in people to help shape a better long-term strategy.
Mulcahy showed he had more strings to his bow as he selected his Board. Rather than rushing into changes, he lined up new people to step in as existing contracts expired or Directors were ready to move on.His former colleagues from British Sugar were the first to go, Rodney Lund exercised his generous share options when the new role he had accepted as MD of Superstores was cast into doubt by the early results of the Cornerstone multi-core strategy, while the Woolworth Holdings parent company needed Nigel Whittaker as its rate of acquisitions accelerated.
The Company Secretary would have his hands full as approaches were made to add Laskys to Comet and Share Chemists to Superdrug. Before long he stepped up to become Chairman of B&Q. When the picture was taken Colin Brown and Richard Harker had already indicated that they would not be seeking re-election. This opened the door to hire Mair Barnes, a Store Director at House of Fraser who had risen to become Buying Director to take charge of the merchandise, and Mike Sommers to take on the Marketing Porfolio with the brief to formulate an alternative strategy. Jonathan Weeks was the hard-hitter needed to reshape Distribution and the Supply Chain, while Don Rose, a rising star from Lunn Poly Travel Agents (now known as TUI) would work wonders on everything from staff morale to management development as HR Director. David Defty took over Mulcahy's day-to-day Finance Responsibilities at Woolworth's while Chris French stepped briefly into the Systems Portfolio before handing the reins to Dan Bernard, who joined from Nabisco. The long-serving Roger Jones had established himself as a trusted adviser to both Mulcahy and Brian Pickering, who relied on his encyclopaedic knowledge of the store estate and its managers.
When Mulcahy took control staff morale was at an all-time low, falling back even further after he announced that the chain would be withdrawing its Food Offer altogether, removing new Delicatessen Counters in around fifty stores when they were less than two years old. But the decision reflected two difficult choices that Mulcahy had made.
Small store, big profit. Big store, small profit.
Research revealed that the huge difference in size between the smallest and largest Woolworth stores was a huge cost-driver. This had forced Mulcahy to face the fact that the best way to save Woolworth would be to sacrifice its superstores. This would also raise funds for diversification. Repurposing the largest freehold properties could be very lucrative for purchasers:
The decision to grow ever-larger had been an emotional one for the previous management, wanting to show a track record of growing both the number of stores and the amount of retail space. For Mulcahy the decision to withdraw was driven by cold empirical reality. Put simply the smaller High Street stores delivered massively more profit per linear foot or metre of shelf space or per square metre of sales area, and their sales and profit per employee were also an order of magnititude larger.
As the graphic on the right illustrates, averaging around 4,000 square feet (circa 375 m2), the 300 smallest local High Street shops were under 5% of the size of the largest city centre branches like Bull Ring, Birmingham, which had been rebuilt from 1960-64 into a massive 120,000 square foot (c11,100 m2) megastore. Many other big city branches had received the same treatment, in locations as diverse as Aylesbury Buckinghamshire, Shrewsbury Shropshire, Harlow New Town Essex and Wolverhampton in the West Midlands. The largest of the Woolco stores were larger still at 150,000 square feet (14,000 m2). Even the slightly smaller Woolco in the Middlelton Arndale, Lancs., was twenty times the size of its predecesor at 17-19 Long Street, which had traded profitably from 1955 until the Woolco opened in 1971. Little wonder that the Woolco was subdivided into four shops shortly after it was sold in late 1985, which remains the configuration nearly forty years later.
Such huge stores carried a lot more lines than the High Street, and added complexities like charge-cards, hire-purchase and home delivery for appliances, furniture and carpets. A century earlier Frank Woolworth had made millions by selling 'a lot for a little' and accepting 'strictly cash only'. Mulcahy's decision to withdraw from the huge locations drew on the Cornerstone results. Even heavy investment in grocery and delicatessen had failed to stop the rot, as had concessions like 'Electronic World' from Comet, or a Superdrug shop-in-shop.
Mulcahy's second decision related to the Merchandise, concluding that there were far too many SKUs (Stock Keeping Units or items), partly because there were too many different departments, with the company entering many new markets but rarely leaving ones that were in decline, but mainly because it didn't "bury its dead" in cutting to clear products that hadn't sold as well as expected. He resolved to focus in on the ranges, challenging each one in turn and deciding which ones deserved to stay and which needed to go. Over time many new elements were added to Operation Focus which came to be a catch-all for the new strategy that would tranform F.W. Woolworth's into 'Woolworths'.
Prompted by a suggestion from his Retail Director, Richard Harker, inspired by his time at Asda, Mulcahy also enforced new rules about promotions and seasonal stocks. To avoid cannibalizing their regular sales, the Buyers were in the habit of building most of their promotions from 'Special Buys' - items that were not normally stocked. Sometimes bin-ends from suppliers could prove very saleable, but often there was a reason why the supplier was prepared to offer them at such a large discount, because, put simply nobody wanted them. Mulcahy insisted that far more promotions should be on listed goods, and that any item that was not on the planogram must be cut to clear and fully sold through before the promotion ended. The full cost of the clearance would be charged to the Buyer, impacting his key performance indicators and any bonus he might have earnt for the year to date. The same principle would apply to seasonable goods. During the 1970s it had become company policy to carry a full range through until the last day of each season to maximise sales, then store the surplus away neatly until the time came to relaunch at full price the following season. One of the reasons that the Company had come close to running out of cash during the inflationary years of the 1970s had been because so much of its money was tied up in excess stocks. In its heyday the Company had achieved twelve stockturns a year, meaning that the average item was sold within a month of arriving in the store, often before the supplier's invoice had even been paid for it.
By 1985 the salesfloors alone carried twelve weeks forward stock, with many stores carrying almost as much again in the stockrooms, consisting of out-of-season goods, new items not yet due to go on sale, and large reserves to fill up from or because orders had not been tightly controlled. The stockturn had fallen from twelve to under two-and-a-half times a year, meaning that the average item was in stock for almost five months, financed from the company's cash reserve for most of that time. When Mulcahy took the helm, despite the savings he had made further up the supply chain and by improving store ordering, the stores still required £240m for stock, with a further £140m in Distribution Centres or further up the supply chain - taking £380m of the Group's working capital, at an annual cost in interest charges of over £44m.
Until Mulcahy implemented the Price Change System during 1984, counter-intuitively inflation had benefitted the stores, as their excess stock appeared to appreciate in value while remaining unsold. It may be that this was the reason why Store Managers preferred to carryover goods left at the end of a season despite the work involved to squirrel them away. Mulcahy instructed that with immediate effect all clothing must be cut to clear to make sure everything was gone by a specified date or be given away to charity. The same rules applied to every seasonable range, from Easter Eggs to Christmas Decorations. A stock preview system allowed the Buyer to estimate how much stock was left well before the end of the season, while there was time to adjust the price or increase the marketing, or occasionally to add the item to a regular non-seasonable range as part of a planogram shelf-layout.
By allowing stores to claim "mark down" on the goods, they would not incur shrinkage when items went out of date, or were cut in price at the end of the season (although it was deducted from the store's semi-net profit via the gross and net margins). The accounting system offset the cost of clearing the remainders and damages against any increases in price caused by inflation, promotions ending or supplier terms changing. By carrying over less stock, store labour costs fell, cash takings rose and the level of shirnkage diminished significantly. Out-of-season items no longer got broken on the way to or from the stockroom. Neither did they get damp, mouldy or pilfered while in storage. Taking a corporate perspective Mulcahy aimed to reduce the capital employed on stock by 25% (£90m), and reduce interest repayments by £10m as well as turning more stock into cash in the current year, and opening the new season with a cleaner, more saleable stock.
Mulcahy knew that the higher the rate of inflation and of bank interest, the more benefit a retailer would derive from a clear-as-you-go policy. He didn't need to have worked in the trade for a lifetime to be able to teach Woolworth a trick or two about using money to make money!
Behind the scenes Mulcahy's new Directors were already making their mark. Mair Barnes and Mike Sommers proved a powerful combination, initially coming up with new elements to bolster Colin Brown's cornerstone, before shaping these into a fully-fledged alternative strategy. At the heart of their innovations was an exclusive licence for the Ladybird Clothing brand, which made its first appearance in the Cornerstone Proof of Concept stores, along with a re-imagined range of toys, kids play and fun learning which later came to be known as Chad Valley. There was also a rethink of the Record Department, which became 'Entertainment', got new bright red fixtures from SDS, an enhanced range of storage and blank tapes and - just too late for Cornerstone the range which some think was the salvation of Woolworth's, pre-recorded video, marketed as 'a film for the price of a blank tape'. Although not publicly credited at the time, many of the store design and range development ideas in the updated strategy were built in collaboration between Sommers, Barnes and a bright, young designer called Crispin Tweddell who had recently joined the leading agency, Fitch Associates. Almost forty years after playing a pivotal part in the turnaround at Woolworths, Tweddell and his team at Piper Trust continue to inspire retail and investment projects today.
Don Rose was also beginning to make his mark at HR, meeting many people across the organisation to try to define what the problem was. He pinpointed three areas for urgent attention:
To Rose, leadership was the key. Discussions with store staff had revealed a recurring problem. Long-serving managers were aloof and dictatorial. At morning inspections they barked orders at under managers, staff and section supervisors, without any direct contact with the staff, who got their orders second-hand and knew that any feedback they gave would be watered down. At staff meetings managers stood at the front and told them what to do, rarely answering questions and never allowing discussion of their orders. This top-down approach also applied between Head Office and the Store Managers. Recent Chairmen and Senior Directors had resorted to the pages of Woolworth News to talk directly to staff but also got no feedback. The quickest way to improve morale and productivity would be for management and staff to work more collaboratively, with managers leading by example.
He established a leadership programme with the Management College at Henley. 1,200 Managers from the Stores and the Centre attended a week-long course in each of three successive years.
The invitations were carefully planned. At each of the thirty sessions there was a mix of managers from the stores, head office functions like Buying, IT and Finance, Distribution Centres and Supply Chain. Some would be old friends, others new acquaintancies with very different perspectives. They exchanged notes and learnt some new tricks, before preparing an action plan and presenting it to a Director of the Company on the final day.
Despite initial cynicism before attending, feedback was almost universally positive. Most attendees put their commitments into action straight away on their return and their people noticed. Little-by-little the culture began to shift, gradually becoming more collaborative and less confrontational. Before long even the customers started to notice a difference.
Over time Henley helped the in-house HR team to conduct an audit of the whole company's management, calling people in for psychometric testing and sometimes interviews when they applied for new roles, and helping the more senior people to put together personal development plans. With the audit complete the Henley team also assisted with a Company succession plan, providing one-to-one coaching for those identified as the 'leaders of tomorrow'.
With steps in hand to update the management culture and leadership style, Rose made the organisation's 30,000 store staff his top priority. An attitude survey conducted shortly before the Kingfisher takeover had highlighted the fact that both staff morale and self-esteem were at an all-time low, yet despite a less than generous benefits package, overall staff-loyalty was extraordinarily high. New joiners and particularly Saturday staff rarely stayed for long, but after a while weekday full-timers seemed to fall in love with the company and stay until they retired. At the takeover, overall one in three employees had served for more than ten years, one in four for long enough to get a certificate and gift as a thank-you for twenty-one years, and one or two people in most stores had either completed or would soon complete forty years with the Company, more-or-less their whole working lives. Rose saw both challenges and opportunities:
The HR Director spent time in-store chatting with the staff, sometimes on formal visits and occasionally incognito. When visiting the writer, a first store manager in 1985, Rose rather gave the game away by entering his name as Mr. D.H.G. Rose in the Refund Book. The Manager was called as there was no receipt, and apologised for the short wait. In keeping with company policy for small amounts, he gave an immediate refund without requesting an address. As Rose pocketed the £1.99 for his "unwanted gift" he enquired "How's it going, what's it like working for Woolworth's these days?" seeming taken-aback by the reply "It's greatly improved since we got a new Personnel Director. He's making a big difference", and asked no further questions before making a bee-line for the exit. On more productive chats he found that the longer-servers had three pet hates about their service with the company:
Rose took all three pieces of criticism head-on, adopting the mantra "smart uniforms, not scruffy overalls" in the Board Room, and highlighting the boost in both morale and self-esteem this would bring. He explained that this would also improve public-perception of the staff, and, taken with the other measures in progress, would boost the quality of customer service given in-store. The shot above, supplied by the PR team as an example of store staff looking smart, showed what he was up against. The overalls had been invented in the Winfield days, at the height of the Seventies love of nylon. The Board agreed and work started in earnest to design and manufacture uniforms to be proud of. The Company was able to make this one of the first tasks of its new garment technologists, brought in as as part of plans for a major upgrading of the children's clothing offer. Initially much of the work was done under-wraps to co-ordinate with other projects to define new store formats as an alternative to the Cornerstone Stores. But when they were revealed Rose's new outfits were a big hit with the staff, going on to deliver the improvements in morale and self-esteem he had hoped. The team behind the uniforms had come up with a series of different variants to suit people of different ages and builds, as well as considering the job roles that those people did.
The second element of the new HR Director's strategy was to acknowledge anbd reward staff loyalty and long service. Some of the steps were relatively inexpensive and addressed things that had simply been overlooked. The gifts given for twenty-one and forty years service were updated and improved, and steps were put in hand in hand for every one to be presented by a Director or Senior Executive.
Communication around the staff Christmas bonus was also sharpened so that it was clear to all that - following principles established by the Founder more than a century earlier - the reward grew acccording to the length of service, roughly equating to a day's pay for each year of service, meaning that the very longest servers picked up two months extra wages as a bonus, while new joiners had to make do with a token couple of days. But the step that did the most to make the long-servers feel valued was to revisit the staff grading structure to increase the rewards for people regraded as a senior sales assistants. The qualification wasn't length of service but it certainly helped. Rose also worked with Nigel Whittaker at Kingfisher and his opposite numbers at the other Operating Companies on enhancements to the Group Pension Scheme to make it fairer for the longer-servers in the stores.
Rose thought out-of-the-box to tackle the "old-fossils complaint", linking it to another goal to secure and retain a new generation of younger store staff. After exploring options with the Department of Employment and the parent company's contacts in Government, he embraced the new Youth Training Scheme, getting Woolworth accredited as a recommended employer and establishing a two-year programme designed to engage, inspire and educate the new joiners. He made it policy to invite long-serving employees to do one-to-one coaching and mentoring for YTS recruits. Long-servers became friends as well as trainers, helping their charges out of many-a-scrape. It proved to be a two-way street which was every bit as educational for the old-hand as for the recruit. The long-servers liked the scheme, hoping it would be a stepping stone to becoming a senior assistant and earning more. At last perhaps their long service was earning them some respect.
The most radical element of Rose's strategy, which drove the most long-term change, was a new training programme for the stores, designed for everyone from the Store Manager to the most junior assistant in the Stockroom. Linked to rewards, it would see every employee getting refesher training in the basics like Induction, Systems and Secondary Selling during Company time, and being encouraged to prove that they had developed specialist knowledge about the products ranges in their own time. Excel badges, as shown on the left, became a symbol of recognition as part of the staff uniform. Each time a training element was passed a further star was added to the badge until there was a full set of five - four for the basics and the fifth for specialist knowledge of one of the product stories (or an area behind the scenes like the stockroom, office or staff kitchen). Getting five stars qualified colleagues for a permanent pay-rise, over and above any annual increase the company was making that particular year.
Rose and the HR teams worked closely with the Buyers, Systems Department and Retail Operations Team to compile a comprehensive suite of training tools, while the project team chose third-parties to design artwork that would create a contemporary feel and a light-hearted house style, that covered everything needed to make employees effective and well informed about trading law. They chose well. The packs were smart and stylish, and the design seemed to hit the spot perfectly, appealing to both long-servers who liked that way the books shared many of the hacks they had picked up down the years, and the youngsters who found them interesting and not too academic.
Initially colleagues were allowed to set their own pace. Rather than applying pressure, Rose had wisely relied on the financial incentives of one or possibly two significant pay rises to get enough people to engage. But the same did not apply to Store and Section Managers and Staff Supervisors. All were left in no doubt that the number of colleagues engaging with the process and passing the test would considered a measure of how well the staff were trained and managed. Using their new leadership skills Store Managers would need to persuade people to participate, rather than telling them they must. They should lead by example by making sure their own skills were up-to-date, and make tests available on demand when colleagues felt they were ready.
The store management teams were encouraged to adopt a 'train the trainers' approach, helping their longest servers to get through both EXCEL and EXCELLENCE, if they wanted to. Unofficially they were advised to conduct tests 'sympathetically', doing their utmost to help their most loyal people to 'get through' and make it into the senior grade. It was noted that, once armed with a pay-rise, it would be possible to get the seniors to lift the load by training and in some cases testing the rest of the staff, freeing their managers for other work while overseeing the process and ensuring that youngsters' tests were far more rigorous.
To qualify for an EXCELLENCE badge colleagues had to show mastery of all of the product stories or ranges, rather than just the one they worked on the most regularly. They would need to be able to answer customers' questions, place orders, fill or set-up displays and conduct stock counts and inventories, as well as doing any routine paperwork relating to :
For many this proved a tough stretch, with the longest servers finding the Entertainment portfolio particularly challenging because of the product knowledge required. Mentors fared the best, along with those whose children were also on the staff, drawing on the relationship to get to grips with subject and over the hurdle. Those Store and Deputy Managers who liked the Entertainment Department often made it their mission to get the longest-servers to help out on the counter from time-to-time and give it the benefit of their attention to detail. This could come in particularly handy at inventory time when eveyrthing needed to be counted.As a quid-pro-quo they were helped through the test.
In the longer term EXCELLENCE had two major benefits in-store. First the overall level of product knowledge in-store was improved, and many colleagues learnt about several extra product stories on top of the one they regularly worked on, with some even asking if they could swap for a change of scene. It also encouraged some of the younger employees from the era when the business was taken over to stay and become the long-servers of the twenty-first century. In 2008 the business still had almost 1,000 employees with more than forty years service, and a little under 3,000 who had completed twenty-one.
One of the weaknesses identified in the management audit that Rose undertook in conjunction with experts from the Management College at Henley, was that very few Store Managers had any external perspective. Most had worked their whole careers for the Company, often joining as Saturday Staff and getting jobs as 'Learners' or Management Trainees in a tradition that stretched right back to the Founder. Until the mid 1970s virtually every management job holder at Head and Regional Office, the Central Accounting Office and the Distribution Centres had been promoted into the role from Store Management. This meant the end-to-end operation was well understood throughout the chain. The Buyers had a clear picture of who the customers were and what was most likely to tempt them, as well as what sorts of things the stores would be able to cope with. But the flip-side was that it also made the organisation highly resistant to change, and closed-minded to new developments in the retail industry. From 1970 onwards the Board had consciously brought in some outsiders to develop new ranges and to strengthen the Personnel Department, just as the specialist Finance team had always hired qualified accountants for key roles and Management Services (IT) had brought in programmers and technology specialists to complement the Analysts and Project Managers who had been plucked out of the line to work on special projects like decimalisation, store labour planning and the centralised ordering system.
The launch of Woolworths' Leadership '86
Sixth formers can win an Outward Bound Course, a trip to London, £50 for themselves and £100 for their school.
In the medium term Rose would encourage Retail Operations to experiment with hiring in some Store, District and Regional Managers from other retailers to strengthen the team, as well as helping Executives to head-hunt the best buyers, marketeers, logisticians and accountants from the retail industry and beyond for the central roles. But a key element of his leadership programme was to help the existing managers to gain external perspective as part of their training. The vehicle he chose was unusual, launching 'Leadership '86', which was a training programme and competition for Schools and Colleges. Store Managers would to add retail industry insight into Schools' Careers Days, as well as giving talks and one-to-one coaching to students considering a career in retail. The Company also offered paid work experience for any sixth-former who approached their local Store Manager either at school or in-store, and created a national competition, complete with a pack of useful materials, which captured teachers' imaginations and attracted many entries and some positive media comment.
Rose's idea proved very popular in a surprising quarter. After engaging with his contacts at the Department of Employment, the HR supremo had an invitation to 10 Downing Street, and left with strong support and a promise of help from none other than the Iron Lady herself, Prime Minister, the Rt. Hon. Margaret Thatcher, PC MP. In keeping with a promise made at the meeting, 'Mrs T.' later entertained all of the winners to tea at Downing Street, and followed it up with a number of personal appearances in the stores, doing a decent job of persuading a following press-pack that she regularly bought her stockings and "knick-knacks" at her local Woolies in Grantham!
Some believe that it was out-of-the-box thinking like the foundations that Rose had laid for Leadership '86, and his work on boosting workforce morale and skills in the Retailer's High Street Stores, that helped the chain's new owners become the first major British company ever to resist a hostile takeover bid. The 'Welsh Wizard' was fondly remembered by some long-servers long after he departed for pastures new, and remembered as one of the most able and influential Directors they had met.
You can read more about Excellence and other initiatives during the Kingfisher years to raise staff morale in our 'Lighter Side of the Eighties Feature', and meet Don Rose and the team in our 'Eighties Movers and Shakers Video'.
1986 was to prove a momentous year for Woolworth Holdings. Despite a fall in sales and profit at Woolworths because of closures and asset disposals, overall results were good, with B&Q surging ahead and exceeding City expectations, and Comet's performance already on-the-rise ahead an imminent campaign of store openings. Having delivered Part One of the turnaround at Woolworths, in April John Beckett decided to retire and exercise his share options. He was only 54, but claimed it had always been part of his life plan. He handed the reins to Sir Kenneth Durham, who would be taking on the mantle as a part-time Chairman, with Geoff Mulcahy running the business day-to-day as Chief Executive. Durham would be stepping into the role gradually as he withdrew from his previous responsibilities.
Perhaps sensing that the changeover at the top made the Group particularly vulnerable, (being part-way through a recovery plan and yet to see a return on some of its investments,) Stanley Kalms launched a hostile takeover bid to wrest control of the business, which he claimed had been asset-stripped by non-retailers who had no clear plan for the business, claiming that he could turn Woolies round quickly and return it to profit by, among other things, moving the Pic'n'Mix counter to the back where it would pull more traffic into the stores.
Kalms seemed unaware that Mulcahy had recently canned the Cornerstone Strategy, but not before announcing the oustanding results that his new Directors had achieved in trials of Operation Focus, a new, simpler merchandise mix which had just started to roll out. Mulcahy highlighted the particular success of the Ladybird Brand, Pre-Recorded Videos in the Entertainment Department and the extraordinary results that Mair Barnes had achieved with a more stylish, yet practical and economical new range of Kitchenware. The battle raged on television for weeks, with the ultimate decision falling to investors, comprising principally the merchant banks who had financed the original buy-out, and traditionally ultra-cautious pension funds who were typically won around by takeover bids because they pushed share prices up and businesses to make and forecast higher dividends.
You can find out more about Operation Focus and see some the early stores in our special feature. The Dixons Battle Story and a TV Commercial pitched firmly at institutional investors from the campaign are also available.
Whatever the rights and wrongs of the bid battle, it had accelerated the decision-making process at Woolworths. In quieter times the new look Comparison and Convenience would have been refined and repeated several times before any decision was made on a roll-out. Normally as a minimum a full year's trading was required before further investment could even be considered. But faced with an existential threat the Directors had thrown caution to the wind.
Mulcahy had gathered together every Manager from the Group at Wembley Conference Centre, wined and dined them and painted a picture of a bright future under his leadership. He had won over his audience of Store Managers by calling them 'the independent unbeatable team', and boasting about the sheer amount of retail experience in the auditorium in answer to criticism from Stanley Kalms that the management was weak and inexperienced. The sound-bite was chosen for the BBC News and the next morning's papers.
The CEO went on to promise the investment necessary for a rapid roll-out and turnaround at Woolies, without needing to hold up plans for new B&Qs or Comets. Somehow, with a promised date for their own store's makeover, the sad news about the closures that would fund the renaissance seemed more acceptable. Woolco was sold, the Commonwealth Stores and more than fifty more huge city centre branches all passed un-noticed - sacrificed to save and revive the rest of the chain.
Mulcahy had gambled and won. In progressing Operation Focus at pace, and regenerating 750 of the stores he had backed a winning horse, helping to sustain the chain - and secure himself at the helm of the Group - for the next fifteen years.
The long-serving Chief Executive's next major reinvention plans in 1998-9 would be better thought out, much more carefully planned, equally radical, and widely supported and yet would turn out very differently as one gamble too far.
By the late 1990s, with the chain delivering more than £100m in annual profits, there was renewed confidence with a wave of store openings in towns abandonned in the Eighties and new initiatives to revitalise the chain. Gradually long-standing rules were relaxed to reflect changing workplace practices elsewhere. Uniforms became more practical, with colleagues helping to design a succession of new looks until the perfect solution was found (below). Rules on tatoos, ear-rings and studs for men, tights, skirts and hairstyles for women in-store were gradually relaxed to align with trends elsewhere and a raft of anti-discrimination and employment protection laws. Meanwhile the firm's offices held out for much longer against the trend towards casual dress. Office management still wore suits and ties until 2003 (above, centre), which looked even stranger in the hostile environment of a Distribution Depot (above, right).
Mainchain Managing Director Keith Fleming was quick to spot a good idea in 2000, copying Big W's informal look (above), and inviting staff to choose a new uniform for the High Street stores. They worked with a leading designer, and chose a polo shirt for practicality, a fleece for warmth, as well as either a blue skirt or a pair of trousers. In a bold move, Fleming announced that Directors, Office and Store Managers would all wear the uniforms when working in-store, as part of his new 'colleague culture'.