Retail has always been a highly dynamic industry, intensely competitive and fighting for a share of the wider consumer spending pot. This is an industry used to dealing with a constant diet of change. However, the change we are seeing today is far more profound than anything the past has thrown up. We are now seeing by far the most challenging period in retail history. A reshaping of the industry’s structure and economics is unfolding, and most of the real change is yet to happen.

Richardtalksretail is focused on analysing this change, anticipating the implications, and mapping how the key players across the various sectors are dealing with it. The regular Blogs in this public section of the site are a taster of the much more detailed analysis and forecasts in the premium section, reserved for subscribers.

If you want to know more, please get in touch.

What you get

Retail – must get better at retailing

Last week came the John Lewis results for the year ended January 2015. Thursday this week it will be the turn of Next and its prelims. Much was made of the lower JLP bonus announced. Next’s results will not be nearly as strong as those of recent years either. I predicted last year that 2015 would be a significantly tougher year for retail and these results from two of the industry’s winners will be far stronger than the majority which follow from their peers. Moreover, they really reflect much more 2014 than 2015. They underline the implications of a vastly tougher trading climate unfolding right now.

It is structural change which is making life so much tougher. I have analysed this in detail and generated forecasts in the premium sections of Here, I can say briefly that there is huge oversupply in the market – too much space, too many stores, and too many mouths to feed. This is the key cause of price deflation which has become a permanent feature of every sector. With year-on-year prices down by 4% and more every month, customers are quickly learning that generally, it is no longer necessary to buy at full price.  This is not just margin-dilutive but brand-dilutive too. It fundamentally impacts your relationship with your customers.

It became very clear halfway through 2014 that what seemed like a retail recovery had no steam left. The writing was on the wall. Last week’s otherwise excellent Retail Week Live Conference barely mentioned sales ie selling stuff. After a period of frenetic cost reduction the industry is lean but not very mean. In fact it is having to be increasingly generous to generate sales. Retail needs to get much better at selling and this is about better understanding of customers, about relevance, about editing ranges so you do not confuse genuine choice with product proliferation. But beware businesses chasing sales at any cost.

** For more detailed discussion and forecasts of demand, margins and capacity visit the premium content of

BHS – going … going…

…gone. Well not quite yet. Today’s announcement has had analysts and journalists alike trawling the web and calling one another in the hope of establishing some kind of potentially relevant background among the group of individuals who have become the new owners of BHS. The relevance is clearly nowhere close to retailing but looks more likely to be in corporate finance and financial engineering.

My take on the context of this deal goes something like this. Exiting BHS will have been as close to painful for Philip as any business decision will ever be. His purchase of the brand was a master stroke. He saw value and restructuring potential which allowed him to go on and buy Arcadia and try to buy M&S too. The point here is that after wringing the very most out of the business he clearly believes he has reached the point of no return, metaphorically and literally. The business has been losing market share and racking up losses. It also has a £100m pension liability. So with all his skill and nous, he has thrown in the towel. It is not a matter of finding someone with more money and management skills than Philip. This is not a turnaround. Its natural constituency no longer exists. Primark does it much cheaper, Bonmarche has a more relevant model and M&S has a stronger brand (everything being relative).

Can the new owners run a leaner operation than Philip? This is as inconceivable as the idea that BHS can start to win back market share. There will have been a sizeable dowry on the table and this will have been the carrot. This deal is the next stage in the closure of the business. I have been warning for some time about oversupply and casualties across the market. BHS’s departure will be a little protracted but it will go, and there will be quite a few more to follow.

** For more discussion of clothing, capacity and casualties, visit the premium content of

Clothing -room for newcomers?

Last week’s news that George Davies is returning to the UK market follows the news of the first Pep&Co unit to open in a few month’s in Kettering. The market they are entering is getting tougher by the month. 2014 was very much a game of two halves – H1 saw yoy sales growth of 4.1% but following an amazingly warm September and October, H2 produced just 2.0% growth. Clearly, the weather was a major factor but it would be very short-sighted to ignore the underlying picture. The UK clothing sector is hugely over supplied and cannot support the existing players fighting for share.

The clue is in price deflation. Clearly the unfavourable weather delayed sales and many had to mark down to shift stock. Mark downs featured in the run to Christmas on a scale I have never seen before and the myopic might attribute all of this to the weather too. However, the telling trend is the scale of discounting seen in 2015 and out there right now. This is a sector where demand is flaky and lowering prices is not always making any difference.

Does this mean George and Pep&Co will fail? Not necessarily. I believe George to be THE outstanding retailer of his generation, ahead of everyone. No one else has started 3 successful brands as he has. And Pepkor have assembled a heavyweight team underlining how serious they are. Nevertheless, whatever numbers they were both working with before, the market is far tougher now than when they were all last players. It will be X% smaller and tighter as this year unfolds. The barriers to success will be huge.

** For more analysis and forecasts of the clothing market and leading players, see the premium subscription content of

The revolving door at the top of retail

Over the past couple of weeks have seen leadership dominating the retail headlines. Suzanne Given parted company with Supergroup. John Allen was appointed Chairman of Tesco. Then John King stepped down from CEO at HoF, quickly followed by John Browett after two years as CEO of Monsoon Accessorize. Then came news that the CEO of Majestic Wines Steve Lewis has stepped down while Allan Leighton has stepped up to be Chairman of the Co-op and David Potts is now officially the new CEO at Morrisons. In today’s far tougher trading climate the strengths and weaknesses of businesses are far more exposed, and it follows that their leaders will be too.


Until not so long ago, leadership was much less critical. Trading in the slipstream of rising real incomes and growing credit papered over the plethora of structural weaknesses of many retailers – life was relatively easy. Now leadership is at the top of the agenda, where it should be. And the key strategic challenges faced today are quite different, and therefore the skills required to grow effectively in this market are similarly changed.


We will be seeing many more changes at the top. There has been lots of whistling in the dark about how positive this year will be. It won’t. That’s not being negative. But prices are – price deflation is the name of the game. It’s simply a reading of the cold hard facts. The revolving door will be working overtime for much of this year. The need for leaders with strategic nous, emotional intelligence and above all, an understanding of how to sell, has never been greater. There are not many that tick these boxes.

New Look IPO

New Look’s proposed IPO has been a long time coming. Apax and Pemira, its two PE backers, have been desperate to exit for some time but rightly judged trading to be too weak. The appointment of Alistair McGeorge as Executive Chairman in 2010 proved to be inspired. The business had lost its way, and its carefully positioned price/fashion niche had become blurred and challenged. McGeorge did a great job refocusing the business, it’s price and range architecture, and laying the foundations for recovery.

At the end of 2012 Anders Kristiansen was appointed CEO and McGeorge became non-exec Chairman. Unlike so many, this has proved to be a smooth management succession and Kristiansen has driven the business forward. Ranges had been edited down, fashion focus restored, price architecture is far more economically viable and added value has been strengthened to support it.

New Look is a solid business. The end of the volume-driven rise of value clothing post Lehmans was a major strategic challenge to its model. Dealing effectively with that took time but the results are impressive. The mild weather of last September/October was a huge test and New Look was hit more than most. This move so soon after that challenge underlines its strength and how far it has travelled.

** For more analysis of New Look, retail IPOs and the market in general see the premium subscription content of


Sign up today for exclusive access to world-leading expertise in the retail sector.