Comment: How the economic climate is influencing CEO career moves

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Against the context of a continuing tough trading environment, the UK high street saw almost one shop close every hour in 2012.

Against the context of a continuing tough trading environment, the UK high street saw almost one shop close every hour in 2012, according to research by PricewaterhouseCoopers (PWC) and the Local Data Company (LDC), with major retailers closing an average of 20 stores every day. With the focus on trying to exit loss making stores whilst continuing to develop online sales and multichannel capability, the pressure on the leadership of these businesses has been intense. There has been an unrelenting drive for increase or turnaround in profitability, and clarity around a brand’s market positioning and point of difference – be this in product, service or accessibility.

In order to analyse the impact of all of this sector change on the CEO seat in UK retail, CTPartners has just published its first annual UK Retail CEO Appointments Tracker, an annual analysis of the key CEO leadership appointments across the sector.

We analysed 206 UK based retailers across all categories; businesses with total annual sales in excess of £50m per annum – the majority considerably larger than this. Overall, there has been a significant amount of change, with no less than 42 new CEO appointments in 2012. It was also significant to note that over 60% of the changes had occurred in the fashion and luxury sectors.

Today’s new CEOs face profound uncertainty on many levels. Perhaps this is why then in many cases that the sector has opted for ‘lower risk hires’. Highlighting the importance placed on a “safe pair if hands”, the majority of CEOs appointed in the past 12 months have already had at least one previous retail CEO role under his/her belt, rather than being high potential first time hires into their first CEO role.

At the same time, the industry’s challenges often require new thinking, and ‘a fresh pair of eyes’ on business.

This could be why 79% of the CEOs appointed have been external hires.

As UK retail sector is set to remain a highly competitive environment it is surprising to see that international growth is not recognised in more of the recent CEO hires. The majority of CEOs appointed (31) in the past 12 months were British. Moreover, for the most part, the non-British CEOs were in the fashion and luxury sectors which have always historically had a higher international profile.

Irrespective of all of the media attention in recent times about women on Boards, it is rather disappointing to see that women are woefully under-represented. There are actually fewer female CEOs now than there were a year ago despite all the recent focus on gender diversity. Only three women CEOs were appointed during the time period, two of whom held prior roles in other parts of their businesses before being made CEO in the UK organisation.

Overall, 2012 was quite a year for change and the trend for a high number of Boardroom and top team changes is set to continue in 2013. And as the new reality for Retail unfolds, it is clear that today’s retail CEOs face both challenge and opportunity on scale not seen in our industry for more than a generation.

Read the full report here.