Inside the retailing jungle

By Selwyn Parker

The abrupt resignation of Sir Richard Greenbury, the doyen of British retailers, as chairman of Marks and Spencers, is the latest illustration of the perils of the sector. And, in particular, of the perils of retailing clothes.

Sir Richard left "Marks and Sparks" in late June - a year before his time - after working his way up through the firm in a 46-year career that he started as a 16-year-old trainee.

He was widely acknowledged as a retailing genius who had his finger on the customer's pulse. In his eight years as chief executive, Marks and Spencers had acquired a reputation as one of Britain's best-run companies, and probably its most innovative retailer after successfully expanding into Europe and opening a financial services arm.

But suddenly it all went wrong. Over the last year, sales dropped sharply, profits halved, and the share price plunged by 80 per cent. Hundreds of staff were laid off, including three directors from a divided boardroom. Sir Richard voted to fall on his sword with these words: "[The company] needs some radical new thoughts. I decided I wasn't the right person to be influencing those judgments." In short, the business had changed and he didn't know what to do.

It's unlikely that Sir Richard has ever heard of Kevyn Male. Indeed, few New Zealanders have, unless they're in the rag trade too. But Male is a member of that resourceful, hard-headed, eyes-in-the-back-of-your-head breed, the independent retailer. For over 30 years, he has managed to make money in Newmarket, first as the owner of The Three Bears and latterly at Route 66. Now he has put his secrets of survival and prosperity down on paper in Ten Commandments For Successful Retailers (Penguin).

Ten Commandments confirms everything one always suspected about retailing. It's a jungle. One slip and you're gone, whether the slip is made in the lease of the premises, in the fine print of a big order, in misjudging the market, in underrating the competition, in borrowing too much money, in hiring the wrong staff ... This business is full of unexploded mines.

But if you're still determined to open a shop or if you're already in retailing, you could do a lot worse than find out how Kevyn Male stayed afloat. Perhaps he should mail a copy to Sir Richard Greenbury. He seems quite cheeky enough to do so.

Among Male's tips, there is a constant thread. Namely, watch your costs. That's why he avoids big advertising companies - "the gulf between what they promise and deliver is far too wide" - does his own cleaning and maintenance, relies heavily on instinct, prefers to hire tradesmen instead of professionals like architects, measures his advertising dollar ruthlessly against results, and uses lawyers and accountants sparingly.

He is also wary of Australians. "Don't buy seasonal or risk product from Australia without the services of a New Zealand-based rep and having first set firmly in place satisfactory terms of payment," he warns. "[Dealing with Australia] is much better today because they want our business, but in terms of the buyer/seller relationship, I still tend to watch my back."

Beware also, he says, of legalistic paper work: "Suppliers are notorious for sending you copious pieces of paper - from themselves, accountants and law firms demanding thou shalt do this, do that, and sign here. Most of it I divert into the rubbish bin." The book contains some nifty survival techniques. On lawyers again: "Always ensure the ground rules relevant to their fees have been set well prior to the commencement of any large business-related programmes. Keep a sharp eye out for charges from some of the leading lights in law and accounting firms."

On shoplifting: "Employees are the first line of defence and continual staff training is essential." On rostering: "During the peak selling periods of the week - normally noon-2pm Fridays and Saturdays - it's imperative that you have the A team on show." On the customer sometimes being wrong: "If I have clear evidence of a customer having 'done the dirty' on a member of my staff, I'll back my staff 100 per cent. The long-held opinion of the customer being right no matter what the circumstances is certainly not a practice of mine today."

This is a scary business. As Male points out, he was himself undone by changing markets and closed down The Three Bears in mid-1995. His reincarnation at Route 66 has apparently gone well, but Ten Commandments only confirms what Sir Richard Greenbury knows all too well.

In retailing these days, the winning formula has a short shelf life.