Microsoft is in need of a hero. It’s currently searching for its next chief executive; outgoing chief and veteran Microsoft-er Steve Balmer has been accused of letting the computer giant fall far behind its rivals. And now it needs a miracle. It needs a knight in shining armour. It needs a turnaround expert. Well, that’s what ‘sources familiar to the matter’ are saying.
Being a chief executive is hard. It’s even harder if the company you’ve just taken the helm of is in dire straits. Unless of course, you take the point of view that if you do save a company, you get a lot of glory, if you don’t - nobody thought you could do it anyway.
The recession might be behind us, but there have been many victims and countless companies still struggling to claw back their market share and restore their mojo. The UK has a gaggle of saviour CEOs itself. They’re working hard to create more U-turns than David Cameron and drag their companies back to the black.
1. Harriet Green – Thomas Cook
No one could accuse Harriet Green of not having confidence. In 2012, she cold-called the chairman of Thomas Cook and told him in no uncertain terms she was the one to save the once-great travel company. Green had no experience in the travel industry having worked in technology (and having studied medieval history). She presented a set of fresh eyes - something established companies often need.
A fall in tourism numbers due to the recession and the emergence of online travel platforms as customers’ favourite way to book, had dented Thomas Cook’s balance sheet – with debts to the tune of £1bn.
So far Green’s strategy has been to cut back on its physical stores (2,500 jobs are going) and focus on internet sales. Losses have been slowed – falling from £667m in 2012 to £470m and the markets have rewarded Greene. In May 2012, just before she joined, shares were trading at 21p – they’re now at 148p.
2. Simon Calver - Mothercare
In February 2012, children’s wear giant Mothercare, nabbed LoveFilm chief executive Simon Calver to take over at the struggling retail company. Calver had spent seven years in charge at LoveFilm and departed just as the DVD and streaming company was squaring up to take-on Netflix.
His first set of results at Mothercare involved a pre-tax loss of £103m so his three-year rescue plan followed closely behind. It involved cutting payroll, stores and focusing on international expansion.
Its latest results from May 2013 showed a loss of £21.5m, UK sales were down 3.6% but international sales grew 5.6%. A significant cut in losses and a sure sign his focus on international customers is paying off.
3. Roger Whitside – Greggs
Whitside took over as chief executive at flagging Greggs bakery in March of this year – having been the boss at Punch Taverns for two years. With Punch struggling with £3bn in ‘unsustainable securitisations’ Greggs looks like a cake walk by comparison.
In August of this year, the company announced a 2.9% like-for-like drop in first half sales with profits falling by £4.6m to £11.4m. Whitside has vowed to focus on the ‘food to go’ market. Greggs, the purveyor of the UK’s favourite sausage rolls had previously launched ‘sit-down’ venues – rebranded as Greggs Moment. Well, Greggs Moment has had its moment and Whitside plans to incorporate its venues back into regular Greggs chains.
Now Whitside is gearing up for his latest set of results, to be announced this week. Whether his attempts have had any effect in the last two months remains to be seen.
4. Philip Clarke – Tesco
Clarke, the Liverpudlian who started working at Tesco aged 14, took over as chief executive of Tesco in March 2011 and has since become an accidental turnaround chief. Sir Terry Leahy was highly-acclaimed but all was not well with the supermarket when he stepped down – if nothing else it was good timing on his part.
Tesco’s foray into the US market ‘Fresh & Easy’ was floundering and it was left to Clark (admittedly one of the executives who spearheaded the project) to shut it down, concede defeat and write-off £1bn. He also wrote off £800m from the value of Tesco’s land bank. In January 2012 he announced the supermarket giant’s first profit warning in 20 years. And then there was the horse meat scandal. Ouch.
The resulting rescue plan has involved scaling back on expansions, giving his stores a face-lift via tie-ups with Giraffe restaurant, Emporium bakery and Harris + Hoole coffee shop.
The latest results have not been kind to Clarke though, last week Tesco announced a drop in like-for-like sales in all geographies, while rival Sainsbury’s posted growth. Clarke has insisted Tesco is making progress. Watch this space.
5. Chris Gillespie - Albemarle & Bond
Pawnbroker Albemarle & Bond’s new chief executive was due to take up his post in about two weeks but Chris Gillespie is settling into his new office as we speak having been drafted in early, starting yesterday.
It’ll be a baptism of hellfire for the ex-Provident Financial chief as the company has until the end of the month to secure additional funding to pay lenders – the banks have already extended the deadline from the end of September. Shares at the group nose-dived from 125p to 30p last week.
Unless Gillespie pulls a cash-laden rabbit out of his hat, it could be a very short tenure indeed. He'll definitely need all three of his golden balls.
