So now we finally know who the new CEO of Debenhams is. Ian Cheshire is right to have been picky about the appointment and Sergio Bucher is not an obvious candidate. His background is digital (Amazon) and brands (Puma and Nike), although Cortefiel and Inditex feature early on in his CV. There were lots of candidates with mainstream retail experience who clearly would have been “safer” options.

Debenhams is certainly not one of the industry’s most fashionable retail brands, literally and metaphorically. Nevertheless, it is a big player (£2.9bn sales) and has defended its market shares remarkably well. While performance may have been unexciting, it needs to be judged in context. Its peer group (M&S, Next, BHS, HoF etc) has not enjoyed plain sailing either. The market itself has been depressed, burdened by the growing weight of overcapacity. So what will Sergio inherit?

Debs has a great beauty business which continues to trade very strongly, built around strong brands, mix and supplier relationships. It is the clothing side where the real challenges lie, particularly with womenswear. Designers was a great idea, is now in its mid-twenties, and needs re-invention. The value proposition needs re-engineering. Reducing some discount days is fine as far it goes, but does it change fundamental perceptions and expectations?

This appointment will be just as critical for Ian Cheshire as it is for Sergio Bacher. This is a retail market unlike any I have ever see. The rear view mirror has become almost irrelevant although life being what it is, most leadership teams are using it as their main navigation tool. Sergio is clearly an unconventional choice but he will bring a totally different perspective to the business, and one likely to question and challenge everything. This exactly what Debs needs – reinvention to carve out its own identity and set its own agenda.

** We advise retailers, investors, suppliers and landlords on retail strategy, forecasts and competition. Get in touch at admin@retailtalksretail.co.uk 

Steve Rowe has passion and humility, a down to earth style and is clearly a company man. His will be a very different brand of leadership – more collegiate, more approachable and more commercial. His analysis of the business is honest and is 100% necessary. But he also exudes confidence. He has had many years, under a variety of CEOs, and this morning makes it clear that he is is very much his own man.

Unsurprisingly, change of approach is focused mainly on clothing and specifically, womenswear.  He makes it clear that executing will take time and money – lower profits can be expected. A turnaround on this scale cannot come free.

Becoming customer driven is easy to say and harder to do. M&S hasn’t been for many years and he is determined to change this. While I still think the core customer is a little older than he does, he clearly understands she is older than has been reflected in Marks’ body language. M&S is going to be far more commercial – ranges will be edited, price promotions will be cut and service levels on the shop floor will be increased. It will put far more pressure on the buying teams and leave them less room to hide behind proliferated ranges. If he delivers on the plan, this will be the most radical change in the way M&S goes to market on clothing for many many years.

Marks is biting some critical bullets here and I applaud a great start by Steve Rowe. This is just the beginning. He has wasted no time, is demonstrating genuine ambition and taking risks. This is all 100% right. As ever in retail, strategy is one thing and execution another. The latter is everything but I am more encouraged about prospects for the business than for many years.

** We advise retailers, investors, suppliers and landlords on retail strategy, forecasts and competition. Get in touch at admin@retailtalksretail.co.uk 

This week has produced 3 threads to the ongoing BHS story. The first session of the Select Committee promised to be relatively uneventful – submissions from the main actors heading the regulatory environment around pensions. It turned out to be incendiary, underlining how culpability in this saga will have few boundaries. Regulators who don’t regulate and offer no protection whatsoever until it’s too late beggars belief. And clearly, responsibility puts politics and politicians right in the frame. The regulatory framework here is simply packaging – a box ticking exercise with no power or will to act.

Then we have the parties interested in buying BHS as a “going concern”. What does “going concern” actually mean? This is a business that has made losses for the past seven years. Granted, lots can be done to rearrange the deck chairs and even change some. However, the key reason BHS is in this position is its sales line, not cost line. I suspect “going” will be short lived, just long enough to sell the pile of stock still in the business at an attractive margin. It will be attractive because of the price paid for it, not because of its tremendous allure to shoppers.

The third thread is a positive – the brilliant #Save BHS campaign just launched. I believe sales have held up very well since the administration began and this should provide solid support and a lift. It reminds me of when C&A announced its last year of UK trading back in 2000. After five years of annual losses around £50m, a series of clever and imaginative promotional campaigns ensured it went out with a very successful bang.

There is much to learn from this story, and the need is pressing. The idea that BHS is a one off in our industry is naive – it is probably closer to the norm than not. Retailers need to start investing in their people as assets, not view them simply as costs. And politicians need to show some will and deal with this issue properly, instead of papering over the cracks.

** We advise leading companies, investors and landlords. If you think we can help you, get in touch at admin@richardtalksretail.co.uk

The news that Forever 21 is closing its Westfield Stratford store comes as no surprise. It is just the latest in a very long line of US apparel retailers who come here with grand plans, spend loads of money opening macho stores, and then watch the losses mount. Virtually every store they have opened is far too big. This particular unit is a great example, nearly 70,000 feet spread over three floors. A unit half that size would have been much too big, and this is not wisdom after the event. It was very obvious from the start.

Westfield Stratford follows many other locations, and there will be more. The issue the overseas brands face is that we already have far too many good UK brands for the market to support. Coming here with an unfamiliar name and a UK market learning curve, the cards are stacked against. We have the most intensely competitive fashion market in the world. Of course, one can cite Zara and H&M as success stories but a) they are from small countries where an international culture is already in the retail DNA and b) they are truly outstanding apparel retailers,

Anyone from abroad coming here needs to do some homework. Hiring a real estate firm and lawyer is not going to help you sell. And if you think you already know how to do that here, study some history, and look at the all the other guys who thought the same. The smart ones saw their mistakes, cut their losses and left quickly. Some of the less smart ones are still here, racking even more losses. Avoid joining that club.

** We advise leading retail businesses here and overseas. If you are looking at the UK market, get in touch at – admin@richardtalksretail.co.uk

This morning’s trading statement from Next will no doubt be viewed in a very negative light, wrongly in my opinion. This is not to say that it’s figures are positive but given the market it trades in, they certainly should not be regraded as negative. And this calls into question how company performance is viewed.

The massive structural change taking place in retail means no retailer’s performance will compare favourable with its own historical record. Of course not recognising the scale and implications of this structural change makes it difficult to gauge company performance. There is no question that Next faces some major strategic challenges but so too does every other player in a market which is changing much faster than they are.

Christmas was a disaster for clothing – yoy declines in sales value, significant price deflation and weak volumes too. This has continued into this year. The weather has made things worse but it is not the key driver. Next will have gained market share over the quarter covered by its statement. Lord Wolfson is right to warn of 2016 being the toughest year since 2008. I forecast this halfway through last year and it is turning out even tougher than I expected.

The structural change we are seeing is driven by far too much capacity and until this begins to reduce materially, there will be no sustainable growth in clothing. It will take much more than the administrations of BHS and Austin Reed to trigger the reset of supply and demand needed to return the market to favourable economics.

** RAH advises leading companies, investors and landlords. If you think we can help you, get in touch at admin@richardtalksretail.co.uk