Retail CEO turnover spikes in challenging year for sector
Retail chief executive turnover reached a seven-year high in 2019 as the sector faced one of the toughest 12 months on record.
The rate of chief executive churn increased 25 per cent on the previous year as the retail industry struggled with low consumer confidence, Brexit uncertainty, changing shopping habits and rising overheads.
The latest research showed that some retailers responded to the challenges by swapping out the chief executive, as the number of companies that appointed a new boss increased to 55 in 2019 from 44 in 2018.
In total, 38 per cent of the chief executives that left their roles last year had been in the job for less than three years. In 80 per cent of those cases, the change was driven by company performance, according to Korn Ferry’s latest UK Retail CEO Tracker.
There were several high profile chief executive departures last year. Superdry founder Julian Dunkerton returned to the fashion chain in April, ousting the then-chief executive Euan Sutherland.
Ray Kelvin, the founder and chief executive of upmarket brand Ted Baker, was forced to resign in March following allegations of harassment, which he denied. His replacement Lindsay Page then stepped down in December after the company issued another profit warning.
Meanwhile, M&S’s head of clothing and home Jill McDonald was pushed out after failing to turn the beleaguered department’s fortunes around.
Korn Ferry managing director Sarah Lim said: “The past year saw a perfect storm of challenges for retail, resulting in profit warnings, a further spate of company voluntary arrangements and a number of high-profile high street names going into administration.
“As we head into a new decade, one thing is for sure; retail will change unrecognisably over the next ten years – those who lead our industry will need to do so too.”
The career trajectory of new chief executives has also shifted over the last year. In 2019, the number of new bosses from sales, trading and merchandising backgrounds fell from 46 per cent to 34 per cent, while those with retail or operations experiences dropped from 22 per cent to 13 per cent.
Meanwhile, the number of chief executives promoted from a finance role jumped from 15 per cent to 21 per cent as retailers focused on strong financial management, debt restructuring and investor relations.