For most of the 20th century Smithson’s was one of Britain’s most successful department stores, but by the mid-1990s, it had become dull. Still profitable, thanks largely to a series of successful advertising campaigns, but decidedly boring. The famous were careful not to be seen there, and its sales staff didn’t seem to have changed since the store opened in 1908. Worst of all, its customers were buying fewer and fewer of its own-brand products, the major part of its business,
and showing a preference for more fashionable brands.
But now all this has changed, thanks to Rowena Baker, who became Smithson’s first woman Chief Executive three years ago. Since then, while most major retailers in Britain have been losing money, Smithson’s profits have been rising steadily. When Baker started, a lot of improvements had just been made to the building, without having any effect on sales, and she took the bold decision to invite one of Europe’s most exciting interior designers to develop the fashion area, the heart of the store. This very quickly led to rising sales, even before the goods on display were changed. And as sales grew, so did profits.
Baker had ambitious plans for the store from the start. ‘We’re playing a big game, to prove we’re up there with the leaders in our sector, and we have to make sure people get that message. Smithson’s had fallen behind the competition. It provided a traditional service targeted at middle-aged, middle-income customers, who’d been shopping there for years, and the customer base was gradually contracting. Our idea is to sell such an exciting variety of goods that everyone will want to come in, whether they plan to spend a little or a lot.’ Baker’s vision for the store is clear, but achieving it is far from simple. At first, many employees resisted her improvements because they just wouldn’t be persuaded that there was anything wrong with the way they’d always done things, even if they accepted that the store had to overtake its competitors. It took many long meetings, involving the entire workforce, to win their support. It helped when they realised that Baker was a very different kind of manager from the ones they had known.
Baker’s staff policies contained more surprises. The uniform that had hardly changed since day one has now disappeared. Moreover, teenagers now get young shop assistants, and staff in the sports departments are themselves sports fans in trainers. As Baker explains, ‘How can you sell jeans if you’re wearing a black suit? Smithson’s has a new identity, and this needs to be made clear to the customers.’ She’s also given every sales assistant responsibility for ensuring customer satisfaction, even if it means occasionally breaking company rules in the hope that this will help company profits.
Rowena Baker is proving successful, but the City’s big investors haven’t been persuaded. According to retail analyst, John Matthews, ‘Money had already been invested in refurbishment of the store and in fact that led to the boost in sales. She took the credit, but hadn’t done anything to achieve it. And in my view the company’s shareholders are not convinced. The fact is that unless she opens several more stores pretty soon, Smithson’s profits will start to fall because turnover at the existing store will inevitably start to decline.’
letter my friend topic
Department store magic