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
‘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