Jessops to shake up stores in profit making plan (CEO interview update 1.50pm)
February 12, 2010
Page One: Recession ‘not over’
Jessops may ‘relocate’ some of its underperforming stores as part of a profit-making plan that also aims to boost customer service and ‘significantly’ expand the chain’s refurbishment programme.
2010 looks set to be a crucial year for the photographic retailer which was delisted from the Stock Exchange in January, four months after a financial rescue deal with its bank.
In September, Jessops’ main operating company was sold to a new firm called Snap Equity Ltd, 47% of which is owned by HSBC.
Chief executive Trevor Moore stressed that the recession is not over for Jessops which faces a tough year, in line with other UK retailers.
‘Whilst technically the recession may be over, physically the impact and effects of it are still very much going to be out there,’ said Moore who was recruited by chairman David Adams last September.
Though he does not expect to see the industry grow over the coming months, Moore is on a mission to develop ‘market share’ and deliver a profit for Jessops this year.
‘I think the UK is in for a really tough 2010 and I think there will be more businesses in trouble in 2010 than 2009,’ he told Amateur Photographer.
Jessops has survived a post-Christmas lull in consumer spending, though January ‘started well’, according to Moore who joined Jessops from mobile phone retailer Phones 4u.
‘Then, of course, the weather hit and the VAT [increase] came in.
‘Clearly we haven’t been able to sustain the growth we have seen at Christmas. We are holding our own and fighting our ground.
‘The media reported that this January was the toughest in retail for 15 years. It?s certainly not at Jessops but it was a much harder January than we thought it would be.’
Yet Moore is convinced that Jessops is ‘well placed to ride out the year’, owing to a stronger balance sheet bolstered by a large chunk [£34m] of its debt having been written off by the bank.
However, on the road to profit, he said it may be necessary to ‘re-locate’ unprofitable stores or those with little growth potential.
With that in mind the CEO has armed himself with a list 20-30 stores, the leases for which are due to expire this year.
Jessops currently operates 213 shops.
‘Every lease that comes up for renewal I need to look at each business in isolation and make a decision,’ he said.
Moore explained that he will assess whether it is prudent to move a store to another location nearby – where there is greater sales potential – or shut up shop and open a new store in a different area entirely.
Page Two: ‘No closure plan’
The decision, he explained, will not be based purely on current profit but also on business forecasts for the store in question and its investment needs.
But, he insisted: ‘There is absolutely no closure plan.’
Asked if he could rule out further store closures he said: ‘Broadly speaking, at the end of this year I would expect to have a not dissimilar number.’
Moore, whose retail career has included jobs at the Thresher Group and Coffee Republic, made clear that his timetable certainly contains no plan to ‘double the size of the estate’.
Though reluctant to reveal details for ‘commercial’ reasons, he said he will do whatever it takes to turn the business around – to be driven through a programme of service and ‘innovation’.
In the past Jessops has been criticised for its customer service and a lack of product knowledge among its staff.
Moore told AP that a large part of his money-making plan will involve a nationwide training programme designed to boost service from store staff, up to senior management and ‘board level’.
Page Three: Jessops rolls out staff training programme
He said Jessops has committed a ‘substantial six-figure sum’ to the project which aims to train more than 1,500 staff before May.
This, he promised, will include ‘one-to-one’ training for new recruits so store staff are fully briefed on the products they are selling.
He admitted that Jessops must achieve a ‘higher consistency of customer service across the board’ and that some stores have delivered ‘variable results’ in the past.
‘I am absolutely service focused.’ said Moore.
‘Great service sells? As a specialist producer what we have to do is have the right range of products? but we have to present them through people who really know and understand how to talk to people.’
Moore is championing ‘advice for life’, the slogan emblazoned across the front of Jessops? New Oxford Street store in London.
‘The most important thing for me in making Jessops strong again is the customer, who has loyally bought from us for the past 75 years and has kept Jessops on the high street.
‘We will recognise that loyalty throughout 2010 with significant improvements in service, with innovation in store and finding new and creative ways to increase their value and experience in our stores.’
Page Four: Store revamps and Pentax
Another cornerstone of Moore’s grand plan is a major refurbishment programme after similar makeovers fuelled growth in a dozen revamped stores year.
Last year Jessops’ David Adams said that its 12-store refurbishment programme had boosted sales at those shops by nearly 10%.
‘We have arranged the funding of a significant number – significantly more [stores] than we’ve developed to date – to be rolled out over the course of 2010 in three phases,’ he revealed.
He said Jessops will announce the locations of these shops shortly.
To help him deliver his business strategy, Moore has expanded his regional management team from six to eight and hired a new retail director, Chris Yates, from Phones 4u.
Moore is confident that the new-look stores will help him achieve his goal of breaking into profit this year.
‘It is in everybody’s best interest. It’s in the best interest of the consumer because we bring choice to the high street; to the supplier as a window on their brand and an outlet for their product and it’s in the best interest of the competition because by being there we bring competition.’
The master plan will include ‘incentivisation’ of store managers, and the addition of new products though he did not elaborate.
It is clear, however, that these ‘new products’ are not likely to include Pentax cameras anytime soon.
Jessops dropped the famous brand from its shelves more than a year ago, telling us that the ‘best range doesn’t necessarily translate into the biggest’.
Jessops seems no nearer to welcoming the brand back into the fold.
Moore explained that Jessops has built a close link with its existing ‘core suppliers’, who have supported it through ‘challenging times’.
‘At the moment my mind is not looking at the extension of our business into brands like Pentax? However, as the business grows it will no doubt bring opportunity? I’m not so blinkered as to say nothing will happen. If there is a commercial opportunity I am keen to embrace it.’
One element clearly not missing from Jessops’ 2010 portfolio is the CEO’s enthusiasm for the business – fired, it seems, by a self-declared fascination for the product.
Moore, who was first given an SLR aged 11, said he hasn’t been able to stop buying new gear since he took on his new role.
Though his interest in photography was only reignited on the birth of his daughter two years ago, he admitted: ‘I am becoming a real geek.’