Re­tailer Dick Steele says store bosses must be bold to sur­vive

Re­tail veteran Dick Steele tells Ben Woods there will al­ways be a need for the high street – but store bosses must be bolder

The Sunday Telegraph - Money & Business - - Front Page -

‘Theresa May re­mains ab­so­lutely the right per­son to guide us through the mine­field of Brexit’

To tackle the ques­tion of whether the high street will sur­vive, Dick Steele con­jures up mem­o­ries of his first foray into gar­den­ing.

It is the late Six­ties, the World Wide Web is still two decades away, and Steele is play­ing doctor to sickly plants at a gar­den cen­tre in Lich­field.

“Peo­ple will keep head­ing to the high street be­cause they want ad­vice,” says the 63-year-old re­tail veteran, who has amassed nearly 50 years’ ex­pe­ri­ence in the sec­tor.

“My first re­tail job was at the age of 14 at a gar­den­ing shop. Cus­tomers used to come in with a leaf and say ‘what is the mat­ter with this?’ And you would say ‘I know ex­actly what that is. You need that bot­tle there, spray it on twice a week, and it will be fine’.

“That type of service is still a good rea­son for vis­it­ing bricks-and­mor­tar stores.”

Steele, who still avidly tends his plot of green and pleas­ant land, is well placed to help un­pick the trou­bles of the re­tail world. Hav­ing spent three years as fi­nan­cial con­troller of Next, and the last 11 years as the chair­man of Port­meirion, the ven­er­a­ble Bri­tish pot­ter, he knows a thing or two about turn­ing dis­tress into suc­cess.

A year af­ter Steele took up the chair­man­ship, the eco­nomic cri­sis shat­tered some of the na­tion’s old­est pot­tery mak­ers. Royal Worces­ter – the 267-year-old china sup­plier to the Queen – and Spode col­lapsed into ad­min­is­tra­tion.

Port­meirion, mean­while, had hit a “ce­ramic ceil­ing” of £35m turnover a year, prompt­ing it to sweep up the brands in what Steele de­scribes as the “deal of a life­time”.

Fast forward 10 years and Stoke’s pot­tery kilns are now burn­ing brightly. Port­meirion Group is clos­ing in on sales and prof­its worth £90m and £10m a year re­spec­tively. About two thirds of sales come from ex­ports. Its 1938 Spode Christ­mas tree pat­tern alone rakes in a cool £7m a year, un­der­pinned by US de­mand. South Korea is the com­pany’s sec­ond-big­gest ex­port mar­ket.

“There is no doubt there is an English halo to our prod­uct,” he says. “It’s quite a com­pli­ment that South Kore­ans buy our pot­tery be­cause they were mak­ing fine porce­lain when we were still paint­ing our­selves blue.”

Steele is mak­ing a fleet­ing visit to Lon­don from his home in Der­byshire, split­ting his time be­tween busi­ness and vis­it­ing his son’s fam­ily with wife Carolyn.

A toxic cock­tail of mount­ing costs, wan­ing con­sumer con­fi­dence and the ir­re­sistible rise of on­line shop­ping has dealt a ham­mer blow to some of the UK’S best-known chains.

A raft of high-pro­file re­tail­ers have sought sur­vival by clos­ing un­der­per­form­ing stores us­ing a con­tro­ver­sial re­struc­tur­ing process known as a com­pany vol­un­tary ar­range­ment (CVA).

The scale of the job losses has prompted much head-scratch­ing from politi­cians as to how best to sup­port an in­dus­try deemed a size­able cash cow for the Trea­sury.

Philip Ham­mond, the Chan­cel­lor, is mulling a so-called “Ama­zon tax” for on­line busi­nesses in an at­tempt to level the play­ing field. Busi­ness rates dis­pro­por­tion­ately hit bricks-and­mor­tar re­tail­ers be­cause the tax is based on prop­erty val­ues.

Steele be­lieves the sup­port for the pot­tery sec­tor, and wider re­tail in­dus­try, should come twofold. He is urg­ing the Gov­ern­ment to recog­nise the re­nais­sance in Stoke by help­ing the area be­come a “ce­ramic cen­tre”.

“We want more gov­ern­ment en­cour­age­ment in terms of univer­si­ties and de­sign cen­tres. Not just for table­ware, but also on the hi-tech side, whether it is for mak­ing mi­crochips or for the space race.”

Steele says that the in­ter­net is caus­ing the lion’s share of the dam­age, but he be­lieves pol­i­cy­mak­ers can ease the pain by ad­dress­ing some of the prob­lems lo­cally.

“If I go to any of the big out-of-town re­tail parks, I don’t have to pay for park­ing. If I am go­ing to Bur­ton upon Trent, I have to pay, so where is the logic in that?

“Bur­ton Old Bridge is also be­ing closed for 10 weeks to carry out ren­o­va­tions, but you go past there at six o’clock and no one is work­ing on it.

“If it was one of the kilns in the pot­tery, we would be work­ing 24/7 to en­sure it is work­ing again, but the coun­cil can­not join up the fact that if you close one of the main bridges, peo­ple just start avoid­ing the town al­to­gether.”

While Steele is happy to level cat­a­logue,” Steele says. “I re­mem­ber one of the di­rec­tors say­ing ‘in or­der to show peo­ple what the fab­ric is like we are go­ing to put a swatch next to the suits in the cat­a­logue.

“When the ac­coun­tants came back they said: ‘If you do that then we are go­ing to spend more on swatches than we are on the fabrics of the suits’.

“The ad­just­ment we are see­ing is not too dis­sim­i­lar to 20 years ago when high streets started mov­ing out of town. That was a big ad­just­ment then, and we are see­ing a big ad­just­ment now”.

The high street re­mains a worry for Steele, but Brexit un­cer­tainty is an equally thorny is­sue. Given the scale of Port­meirion’s ex­port op­er­a­tions, clar­ity on over­seas trade can­not come soon enough.

It is par­tic­u­larly cru­cial for its sup­ply into Asia. The man­u­fac­turer cur­rently leans on the ben­e­fits that come from the EU’S free-trade deal with South Korea.

“The free-trade deal is with Europe, it is not with UK,” says Steele. “If we can grand­fa­ther that over then we are all well and good, but that is an­other un­cer­tainty.”

He is also con­cerned about the po­ten­tial im­pact Don­ald Trump’s pres­i­dency may have on trade with the US.

“With Europe, we are strong enough to stand up to what­ever Trump does,” he says. “With­out Europe, I don’t know if we can. I am a great pa­triot, but I am also a re­al­is­tic pa­triot.”

Steele rolls his eyes when asked about the opposition to Theresa May over Brexit from in­side her own party.

Mrs May’s Che­quers plan, which would main­tain a com­mon rule book for all goods, has faced fierce crit­i­cism from both hard­line Brex­i­teers and Re­main­ers.

“I think Theresa May will do bet­ter for us than some of these big swing­ing d----,” Steele bris­tles. “She re­mains ab­so­lutely the right per­son to guide us through the mine­field of Brexit. In any ne­go­ti­a­tion – and this is a ne­go­ti­a­tion which will de­fine our coun­try’s prospects for decades – it is vi­tal to try and stand in the other side’s shoes. The PM has that em­pa­thy.”

Steele’s jour­ney be­gan in Al­sager, Cheshire, where he was born in a coun­cil house to par­ents who worked in a mu­ni­tions fac­tory mak­ing bul­lets.

He was the first mem­ber of his fam­ily to go to univer­sity, study­ing eco­nom­ics and ac­coun­tancy at the Univer­sity of Liver­pool, be­fore start­ing his ca­reer at ac­coun­tancy gi­ant KPMG, later mov­ing onto stints at Next, Hob­by­craft, Lloyds Chemist and Store­house.

He claims to be one of the first di­rec­tors to seek a so-called “plu­ral” ca­reer by sit­ting on a num­ber of boards as a non-ex­ec­u­tive direc­tor. He be­came chair­man of Port­meirion in 2007.

The prac­tice of di­rec­tors hold­ing mul­ti­ple non-ex­ec­u­tive roles has come un­der scru­tiny in re­cent months over claims that some com­pa­nies are suf­fer­ing from the ef­fects of “over-board­ing”, where di­rec­tors take on too many po­si­tions.

Steele says it re­mains a chair­man’s job to spot and fix the is­sue. While he ad­mits some of the busiest nonex­ec­u­tive di­rec­tors are the best, if they strug­gle to make board meet­ings and are not putting in the time then there is clearly a prob­lem.

How­ever, he is quick to point out that it should never be the job of the chair­man to run the com­pany, even if they are a strug­gling re­tailer. To ram home the point, Steele takes an­other walk down the gar­den path.

“The job of a chair­man is a bit like the Ed­war­dian lady of the house,” Steele says with the flicker of a smile.

“You go out in the gar­den of an evening and you might snip a flower here and there, but you do not tend the gar­den; that is the role of the chief ex­ec­u­tive.

“It is not your job to say he is cut­ting the grass too late, too early or too short. But it is your job to say to him that ‘I was at that big house last week and they are grow­ing these flow­ers there now. It would be in your in­ter­est to take a look’.”

Dick Steele, top, has been chair­man of the pot­ter Port­meirion for the last 11 years, with sales and prof­its on the rise

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