UK: A change in store at Littlewoods. (4 of 4)

UK: A change in store at Littlewoods. (4 of 4) - Guha is a curious mix of a marketing man. He has the fast talking sales pitch and easy familiarity common to people of his profession, coupled with a calmer side, fond of quoting wise sayings from his nati

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Last Updated: 31 Aug 2010

Guha is a curious mix of a marketing man. He has the fast talking sales pitch and easy familiarity common to people of his profession, coupled with a calmer side, fond of quoting wise sayings from his native India and disdainful of marketing favourites like "adding value" with fancy packaging or "creating new markets". "Businessmen can't innovate," he says sagely; "they can only harness what's latent in customers."

Following on from this logic, Guha has his most ambitious plans in the area of food. He wants to take the M and S formula one step further "by offering the customer more flexibility". This has meant things like pick 'n' mix fruit - six items for a fixed price whatever the combination; or self-service salad bars - fill a tub with your own selection for 99p. The next step will be ready meals - Chinese, pastas and curries in single portions that will do away with the need for cooking. Unlike M and S, says Guha, "we will do it cheap by cutting the frills. Minimal packaging helps everyone, including the environment."

With talk of a series of stand-alone shops it is hard to believe that the idea is not to rival Marks. It would not be the first time that Littlewoods had copies a successful high street idea. The Index catalogue, Guha admits, bears more than a coincidental resemblance to that of rival Argos. "We have learnt from Argos. I believe we're better because if you copy something you can do it better," he says confidently. Then he adds an Indian saying: "The ordinary man learns from his experiences; the wise man learns from the experience of others."

Despite all of the changes, Littlewoods still bears the hallmarks of a family-owned company. It is the sort of place where people go for a job for life. The company magazine is full of details of employees' long service awards (next to the details of how to enter the "Miss Littlewoods" contest). Loyalty is, of course, a good thing. And Littlewoods must be commended for the way that it looks after its staff and for the role that it has played as a responsible Liverpool employer.

But the danger is that things get too cosy. Changes are slow. Growth tends to be organic and gradual because of the problems of raising finance. "Life might be more exciting if we could create paper," says finance director Dale, "but look at our results. We're now in the strongest financial position the company has ever been in." And, he points out, being private has made it easier to invest without worrying about the effect of reduced profits on the city. "Our relative losses have been higher than would have been accepted in a listed plc," he says. "But that's the listed companies' loss."

That may be so. But it is just as easy to put another slant on it. Last year's results were OK, but nothing spectacular. And, let's face it, it has hardly been a lightning turnaround. Guha surely had it right when he likened Littlewoods to a giant tanker that takes ages to change direction.

This is not surprising. Littlewoods has been through the classic problems of succession for a company built by a single man. Even once a professional, non-family management had been put in place, one gets the feeling that it was never really given free reign. (The management would never admit it, of course. All Pitcher will say is that "the shareholders are very supportive".) On top of this, family politics have also intervened - and with 32 members there is plenty of scope for, shall we say, differences of opinion among the Moores.

John Clement is a case in point. A year ago when he resigned as chairman it was widely held that he had been pushed and that Peter Moores was about to mount another bid for the post himself. Given his previous record at the helm, the rest of the family was none too keen. In the event Leonard van Geest - already a non-executive director - was appointed caretaker chairman. It is obviously still a sticky subject. A year down the line Pitcher, who after all is chief executive, feels unable to confirm if van Geest is officially permanent or not.

Putting all of these problems aside, the real question about Littlewoods now is whether the sale of home shopping means that the rest of the group will soon come to market. The company's line is no. Pitcher pooh-poohs the notion of a stock market listing at a time when so many entrepreneurs are taking their companies private once more. For the time being it is a convenient argument and there is no point in pressing him further. After all, as he is quick to point out, "it's all a matter for the shareholders to decide".

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