The retail industry experienced a staggering increase in CEO turnover in 2019, as the sector grappled with a multitude of challenges. According to a report by Korn Ferry, a global organisational consulting firm, 55 retail chiefs stepped down from their positions, representing a 25% surge in CEO changes compared to the previous year. The fashion and luxury sector, in particular, witnessed the highest number of CEO turnovers among all categories.

Last year proved to be one of the most challenging periods for the retail industry in over a decade. A perfect storm of wavering consumer confidence, Brexit uncertainty, a general election, and rising business rates wreaked havoc on the sector. As a result, the retail industry collectively experienced what can only be described as an ‘annus horribilis’.

In response to these unprecedented challenges, retailers were forced to seek new leadership styles to navigate the turbulent market. Many companies turned to fresh talent and shifted their focus towards strong financial management, debt restructuring, and investor relations. The report highlighted a significant increase in the number of retail CEOs with financial experience, rising from 15% to 21% in 2019. This shift underscores the industry’s recognition of the importance of sound financial strategy in times of crisis.

However, the research also unveiled a decline in the appointment of CEOs with commercial/sales or buying and merchandising backgrounds. This indicates that retailers are moving away from traditional skill sets and placing a greater emphasis on financial expertise to guide their organizations through the storm.

Fashion and luxury retailers bore the brunt of the CEO turnover wave. Several prominent fashion chains, including Debenhams, Karen Millen, Jack Wills, LK Bennett, and Bonmarché, faced administration, resulting in a significant reshuffling of leadership positions.

Sarah Lim, a representative from Korn Ferry, acknowledged the various challenges faced by the retail industry in the past year. She commented, “The past year saw a perfect storm of challenges for retail, resulting in profit warnings, a further spate of company voluntary arrangements, and a number of high-profile high street names going into administration. As we head into a new decade, one thing is for sure, retail will change unrecognizably over the next 10 years — those who lead our industry will need to do so too.”

Unfortunately, gender diversity remains a persistent issue in retail leadership. The report revealed that only 23% of the CEOs appointed in 2019 were women. Karen Hubbard, CEO of Card Factory, stands as the sole female CEO at the helm of a large listed retailer.

In conclusion, the retail industry faced a tumultuous year in 2019, resulting in a significant increase in CEO turnover. The challenges posed by uncertain economic conditions, political instability, and evolving consumer behavior compelled retailers to seek out new leadership with strong financial acumen. The fashion and luxury sector, in particular, experienced significant upheaval, with several major players succumbing to administration. As the industry looks to the future, it is evident that retail leadership will need to adapt to a rapidly evolving landscape in order to thrive.

Useful Links:
1. Forbes – How to Adapt Your Retail Business Plan to Overcome Challenges
2. Business of Fashion – Five Future Scenarios for the Retail Industry