Only 18 new retail CEOs were appointed in the UK last year, marking a 54% drop from 2020.
A new report from management consultancy firm Korn Ferry revealed that of the 21 retail companies in the UK that announced their chief executive was stepping down in 2021, only 18 have revealed a successor.
The remaining three retailers – Asda, Asos and Clarks – are expected to reveal their newly appointed leaders in the coming months.
The appointment of 18 new chief executives marked a notable decline compared with the previous year. In 2020, 33 retail CEO appointments were reported as the pandemic began. This had also been regarded as a historically low number compared with the 45 changes recorded in 2019.
Retail Week pulls out four key points from Korn Ferry’s UK Retail CEO Tracker 2022 to understand the effect of the second year of the pandemic on the sector’s leadership.
The successors
Of the 18 retail chief executives appointed last year, Korn Ferry reported that 11 were first-time CEOs, reflecting a growing trend from 2020.
Organisations also increasingly looked internally during spells of Covid uncertainty to find their next leadership candidate, with all but two new chief executives promoted internally.
The newly appointed retail leaders were also well versed in the industry, with all 18 coming from within the retail sector. Half came from commercial, trading or buying backgrounds, while a fifth previously held a chief financial officer role.
Ten-year trend: number of CEO appointments in UK retail
(Source: Korn Ferry UK Retail CEO Tracker 2022)
Some 16% of successors had brand or marketing experience, with only one of the 18 new chief executives hailing from a retail operations background.
Korn reported that this illustrates the ongoing macroeconomic challenges: “[The appointments are] highly indicative of economic uncertainty, where investors/boards are unprepared to risk appointing a CEO without them having prior industry expertise.”
Uncertainty also drove when the successors were revealed. Korn Ferry managing director Sarah Lim said: “In the first half of 2021 we saw very low retail CEO turnover. Interestingly, there was a significant shift in the second half of the year, when we saw a dramatic increase in the volume of new CEO recruitment.”
Is diversity really a priority?
The number of women appointed to the chief executive position also fell to four from eight the previous year. Korn Ferry reported “little evidence for any significant improvement of women rising through the ranks to the CEO role”.
Overall, women represented 22% of new appointments, remaining stagnant. Last year, it was reported that female chief executives made up around 20% to 23% of all retail CEO appointments annually.
10-year trend: female CEO appointments in UK retail
(Source: Korn Ferry UK Retail CEO Tracker 2022)
Only one of these new appointments was an internal promotion, with Manju Malhotra moving from the CFO to the top job at Harvey Nichols.
The remaining female leaders switched companies for the top job. These included Tracey Clements (formerly COO at Boots) who now leads BP Convenience, as well as current Laura Ashley CEO Carolyn D’Angelo (formerly president of home division at BP Convenience) and George chief executive Liz Evans (formerly CEO at FatFace).
A similar trend was reflected in the number of chief executive appointments of people of colour in 2021. Only two were people of colour, mirroring the same figure appointed in 2020. These included Malhotra at Harvey Nichols as well as William Kim, the newly appointed Rapha chief executive. Kim previously led both AllSaints and Samsung.
Six-year trend: number of CEO appointments of people of colour in UK retail
(Source: Korn Ferry UK Retail CEO Tracker 2022)
The data also illustrated that there was no improvement in the appointment of people of colour to retail CEO roles in the past six years, with the highest number recorded to date being only three candidates in both 2018 and 2019.
Lim commented: “We know that organisations with diverse leadership perform at a higher rate than those that do not. It’s critical that boards work to bring more diverse candidates into the recruiting mix.”
Time to say goodbye
More than a third of the CEOs who left their posts this year had held the positions for three years or less. Lim said: “It is interesting to note the short tenure of many of the departing CEOs.
“While in some cases this was a result of planned succession or internal promotion, for several others this was indicative of business distress, board dissent or dissatisfaction with leadership.”
No one reason emerged to account for the changes to chief executives in retailers last year. Instead, they included myriad factors such as ownership changes, the performance of the business and the relationship with the board, as well as pandemic uncertainty, planned succession or retirement.
Examples included Roger Burnley at Asda, Giorgio Presca at Clarks and Ajay Kavan at Matchesfashion. Some CEOs were also poached by other companies, including Liz Evans moving from FatFace to George and Ross Clemmov going to Homeserve from Wiggle.
Korn Ferry expects the number of new retail chief executives to increase as we enter an era of relaxed restrictions. However, the recruitment firm added that rising taxes and inflation are likely to impact consumer spending.
Appointments are also anticipated to return to pre-Covid levels across the year as business confidence begins to improve.
Lim concluded: “Many of the organisations that commenced new CEO searches in the latter part of last year have yet to announce these new CEOs, so we expect to see an increase in the number of CEOs appointed in 2022.”
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