A matter of quality

Quality of management is typically one of the focal points for investors in any business. And in these celebrity-obsessed times, a business version of X Factor is often played out when retail’s big roles are up for grabs, as was seen during the Marks & Spencer succession. The Tesco way is just the opposite, and evidence that frequently internal candidates have the right aptitude and attitude to move a business on.

The same looks true, on a smaller scale, of specialist Majestic Wine. When former boss Tim How, who led it for 19 years, stood down in 2008 he was succeeded by Steve Lewis, who had worked at the retailer since 1985.

It wasn’t the easiest transition. Within months, Lehman Brothers had gone down and recessionary conditions caused Majestic shoppers to rein in on the plonk.

But Majestic’s response - to cut the minimum purchase from 12 bottles to six - was inspired, as Monday’s prelims showed. While transaction value was down, transaction numbers were up as were profits.

The initiative showed how a small change can make a difference - exactly the sort of measure that is invaluable in a downturn. And evidence too that a well-established management team can make dramatic improvements as effectively as a star parachuted in from outside.

Wisdom of a wider IPO

Following in SuperGroup’s footsteps, home shopping group Ocado is likely to offer shares to retail investors such as customers and staff if, as expected, it floats next month. A retail offer brings extra complexity and companies have increasingly tended to involve only institutions in their IPOs.

But there are arguments in favour of a wider offer.

It’s right to reward loyal staff with the chance to buy in to success and creates an extra incentive for them to do their best to ensure it continues.

Not least, it ensures wider media coverage - typically very useful when a business intends to float.

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