Bish boshed as Woolies rings the changes

More upheaval at Woolies, as another drop in like-for-like sales is the cue for a change at the top...

Last Updated: 06 Nov 2012

Woolworths said this morning that Trevor Bish-Jones would be standing down as chief executive, as the ailing retailer put out another grim results statement. Like-for-like retail sales fell 2.2% in the first 19 weeks of the year, while total sales were down 1.9%. Woolies blamed cost pressures (i.e. spending cut-backs) and the strength of the entertainment market – this meant its lower-margin electronic goods sold well, but it couldn’t shift higher-priced items like garden furniture. (Presumably the rotten weather hasn’t helped either.)

Bish-Jones will apparently stay on for three months while the headhunters get busy finding his replacement, before moving on to pastures new. It’s been a tough six years in charge for the ex-Currys man, who has seen bigger rivals continue to eat into the once-mighty retailer’s market share. For a generation brought up on Woolie’s penny sweets and cheap games, it’s sad to see it struggling as it has in recent years – although it’s no real surprise. With the big supermarkets cleaning up at the low-cost end of the retail market, and specialist sellers mopping up the rest, it’s not really clear where its niche is any more.

Bish-Jones’s strategy was to position the company as a value retailer, and he seemed to be having some success. He’s cut costs, sold off assets (it announced another property disposal today, generating a one-off profit of more than £20m) and recently launched a national ‘Price Drop’ campaign for hundreds of everyday products, which will hit margins but hopefully encourage increasingly cost-conscious shoppers to trade down to Woolies. He’s also had some success with wholesale arm EUK and BBC joint venture 2entertain. In fact, his achievement in edging the store back into the black last year (after losing £13m the year before) won him lots of City plaudits – even if the 66% dividend cut did go down like a lead balloon…

Of course it’s not the only retailer feeling the squeeze – even John Lewis is suffering from falling sales at the moment, while Sainsbury’s said this morning that sales growth dropped to 3.4% last quarter. So Bish-Jones has been operating in a tough environment. As you’d expect, chairman Richard North was generous in his praise today: he called him a ‘a tireless chief executive [who] has made a very significant contribution to the Group’ – but argued that this was ‘an appropriate time to seek new leadership for the business’. (The question is, will anyone actually wants the job...?)

And it’s not all bad news for Trevor. Much like Blankety Blank, nobody leaves the City empty-handed: he will apparently have his contract honoured in full, which means a year’s pay – around £800,000. Just imagine the bag of penny sweets he could buy with that...

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