A reignited culture, changes to store merchandising, and attention to detail are key areas The Warehouse Group’s new chief executive is keen to focus on as the next era of the Red Sheds begins.
After a nearly year-long search for a permanent replacement for former chief executive Nick Grayston, the group has settled on current chief financial officer Mark Stirton as the man to lead the struggling retailer.
The South African joined the company in April last year, tasked with helping spearhead interim chief executive John Journee’s plans to turn around the business.
Chair Dame Joan Withers said Stirton was benchmarked during the selection process and came out as the best candidate.
“Effectively, he’s had a one-year interview process. He’s not only got the responsibilities for the financial function here, but also now for IT, so he’s handled a very, very big job,” Withers said.
“We’ve got the confidence in his performance, and now we’ve come to an outcome where we’ve assessed some very high-quality aspirants for the role against him and we’re absolutely delighted.”
Stirton grew up in Durban, South Africa, living with his family while his father ran a business in the liquor and retail industry.
Until the age of 14, his family lived comfortably in a wealthy suburb but that all changed when his father lost his business after some financial decisions went wrong.
That experience highlighted the significance of financial security for Stirton and set him on the path to becoming an accountant.
“I asked my school counsellor at the time how to avoid that outcome, and he said, Mark, if you want a job that makes a lot of money and you never have a risk of losing work, become an accountant, so I did,” Stirton said.
Stirton left behind his aspirations of becoming an architect, gaining his Chartered Accountancy qualifications and then studying an MBA from the University of Barcelona, specialising in business transformation.
Following a few years at PriceWaterhouseCoopers (PwC) and a South African investment company, he found his way to Mr Price Group, the largest fashion-value retailer in South Africa.
Stirton spent almost a decade rising through the company’s ranks before becoming its chief financial officer.
He said the business gave him plenty of beneficial experience in home apparel and sporting retailing, the fundamentals of The Warehouse.
“My dad was a retail entrepreneur, and I grew up in our stores as a youngster learning the importance of engaging with customers and the power of having the most wanted items in stock.”
“This gave me a deep appreciation that retail is detail and that taking care of the seemingly small things matters. These things are as important today in getting The Warehouse back to its best.”
Getting the business back to its best is perhaps Stirton’s biggest challenge. When Grayston stepped down last year, shares in The Warehouse were trading at $1.20 and have since dropped nearly 30% in the past 12 months.
Stirton believes his financial acumen and attention to detail is why he was chosen for the role.
“Mr Price Group has a strong entrepreneurial culture where you treat every dollar like it’s your own, roll up your sleeves, be brave in trying new things and learn quickly from the results. That culture is balanced well with strong retail, fiscal and operational disciplines.
“The Warehouse Group has that founder’s spirit and Kiwi ingenuity in its DNA, it’s close to the surface, but we need to unleash it to give more value and excitement to our customers and communities.”
Building that culture is key. Stirton references the “warrior spirit” instilled in the business by founder Sir Stephen Tindall and the need to bring it back.
Stirton hopes he can restore that culture to the Red Sheds and his goal is to put the business back at the forefront of Kiwi culture.
“I want The Warehouse to be the centre of the community. I think it’s such an important part of community that people think of us as a top-of-mind shop. That would be my hope.”
He referenced the geographical footprint the group benefits from, but acknowledged the products are the key to winning back market share from its competitors.
One way to achieve that is through its in-store merchandising.
“I think that is where the opposition has beaten us. The Temus and the Sheins of the world are online pure players. We’re brick-and-mortar stores, and we’ve got to put more investment back into our stores. I think customers are going to start to see a difference.”
Returning the business’s operating margins to above the 3% threshold is also a critical goal, Stirton admitting it isn’t acceptable for a business with a topline revenue of more than $3 billion to have such low margins.
Perhaps the biggest indicator of how Stirton plans to change the business is through its presentation, enhancing the experience customers get in stores.
“At the moment, they are quite functional and quite sterile, and I think we’ve got to show more personality in our stores. The way we show the merchandise at the moment is very functional and very warehousey in terms of there’s not a lot of personality to it.”
One of the largest talking points over the past few years for the business has been its entrance into grocery and whether there are any plans to properly pursue the model and challenge the current duopoly.
Stirton, however, doesn’t see the company’s overall strategy changing soon, with the intent to remain a multi-category retailer.
As for whether shareholders would be impressed with a non-Kiwi running the business, Stirton said he has more similarities culturally than people may think.
He has lived in New Zealand for over a year, and said the relationships he has formed have made him comfortable calling this place home, although don’t expect him to give his allegiances when it comes to the All Blacks just yet.
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
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