FINANCE & MANAGEMENT 10 MAY 2012 FINANCE & MANAGEMENT
TURNAROUND RETAIL THERAPY Helping revolutionise Selfridges gave Peter Williams a reputation as a turnaround expert. Christian Doherty finds <strong>the</strong>re’s more to him than corporate paramedic – but in an economy that refuses to recover, his lessons are valuable to all FDs DUANE NASIS T here aren’t many FDs who are described as a “junkie” by a major newspaper. Peter Williams was, though he’s at pains to explain <strong>the</strong> Evening Standard had him down as a junkie <strong>for</strong> change – a reference to his habit of arriving at stricken companies and playing a significant role in <strong>the</strong>ir recovery. “It’s inevitable that people are going to want to pigeonhole you,” he says, pointing out that turnaround work <strong>for</strong>ms only a part of a thriving portfolio of roles. He now combines board roles at Cineworld, Silverstone Holdings Ltd, <strong>the</strong> Design Council, fashion retailer ASOS (a serious success story) and football pools company Sportech. That’s a pretty diverse roster. But Williams’s most high-profile engagement recently was as chairman of Blacks Leisure, <strong>the</strong> outdoor retailer that hit <strong>the</strong> buffers in <strong>the</strong> middle of 2011. Managing that kind of decline isn’t easy. It takes a certain kind of resilience to take <strong>the</strong> helm of a company so clearly in trouble. (His role ended in January when JD Sports was secured as a buyer <strong>for</strong> <strong>the</strong> chain.) Still, his work with distressed businesses gives him particular satisfaction. “There are plenty of people who do this work, who come along to bury <strong>the</strong> dead,” he says. “My aim is to heal <strong>the</strong> wounded, not read <strong>the</strong> last rites to <strong>the</strong> dying.” ACT QUICKLY FOR THE PATIENT These “casualties” have been, <strong>for</strong> <strong>the</strong> most part, consumer-facing businesses. Following a stint as CFO and latterly chief executive at iconic department store Selfridges, Williams carved out a niche as something of an emergency surgeon <strong>for</strong> distressed retailers. In <strong>the</strong> last ten years, JJB, EMI and most recently Blacks have all had <strong>the</strong> Williams treatment. Taking a deliberately vague job title – “director of strategic development” is a favourite – Williams usually arrives at a company when <strong>the</strong> banks and investors have lost confidence in <strong>the</strong> incumbent management. His first aim? To shift <strong>the</strong> direction of travel away from administration. Take sportswear retailer JJB. As an executive director working alongside Sir David Jones, Williams calmed investor fears of an imminent collapse, <strong>the</strong>n restored <strong>the</strong> business’s credibility with analysts – a crucial step. A series of strategy changes were announced, including <strong>the</strong> closure of unprofitable stores. Williams’ tenure was seen by many observers as critical to <strong>the</strong> chain’s subsequent survival. That decisiveness is <strong>the</strong> key: tending <strong>the</strong> wounded means making a series of quick decisions to stop <strong>the</strong> bleeding. But as Williams points out, <strong>the</strong>re’s more to it than simply parachuting into a crisis, slashing costs and buying time with <strong>the</strong> bank. “You have to keep calm,” he says. “Whatever fires are burning in <strong>the</strong> various parts of <strong>the</strong> business, you have to keep “You’re going to need people to think clearly and act decisively if <strong>the</strong>y’re going to help <strong>the</strong> turnaround – so you must reassure <strong>the</strong>m” your head because if you, as leader of <strong>the</strong> turnaround process, are seen to panic in any way, <strong>the</strong>n that’s not going to help.” STATE OF MIND The next step in Williams’s paramedic act is simple: reassure <strong>the</strong> work<strong>for</strong>ce, from top to bottom. “By <strong>the</strong> time you get <strong>the</strong>re, <strong>the</strong> business will typically have been through difficulties <strong>for</strong> a period of time,” he says. “You’re dealing with an organisation that’s made up of human beings, and inevitably <strong>the</strong>ir emotions and worries can fur<strong>the</strong>r fuel <strong>the</strong> fear. You’re going to need people to think clearly and act decisively if <strong>the</strong>y’re going to help <strong>the</strong> turnaround – so you must reassure <strong>the</strong>m.” Once fears have been calmed, Williams wastes no time in trying to establish precisely how a company came to need his help. There are generally two kinds of situations that demand his help. First is long-term – and usually irrevocable – shifts in consumer behaviour. Think Kodak falling victim to digital photography, or HMV suffering as consumers migrate to buying music online. The second, and more common, issue is that <strong>the</strong> companies lose sight of what made <strong>the</strong>m successful in <strong>the</strong> first place. “Take JJB,” Williams says. “When I got <strong>the</strong>re it had a heritage as a specialist sports shop. But when you went into a store, you were faced with Hello Kitty and Thomas <strong>the</strong> Tank Engine merchandise.” Williams pointed out that anybody who’d gone <strong>the</strong>re thinking it was a sports store would be confused. “There’s a reason why I focus on that: <strong>the</strong>re are more shops than we need, <strong>the</strong>re are countless retailers out <strong>the</strong>re, and <strong>the</strong> consumer is as time- FINANCE & MANAGEMENT MAY 2012 11