UK: A change in store at Littlewoods. (3 of 4)
UK: A change in store at Littlewoods. (3 of 4) - But it is the high street where Littlewoods is staking its future, and here its position is much less secure. "We face formidable competition in a market overshopped with chain stores," says Pitcher. In ad
But it is the high street where Littlewoods is staking its future, and here its position is much less secure. "We face formidable competition in a market overshopped with chain stores," says Pitcher. In addition to this, Littlewoods' latest high street venture, the Index catalogue stores, is in a market sensitive to recession and high mortgage rates. The 96 new shops are, in Pitcher's words, "in the heartland of discretionary spending on presents and household requirements".
Nevertheless, 1989 was unexpectedly strong on the high street. Index, which was started in 1986 as a rival to the immensely successful Argos stores, is moving into profit ahead of time. These modest triumphs are the result of eight years of hard work by Pitcher and his team. When he joined Littlewoods in 1983 the company was just emerging from a disastrous turn in fortunes which had seen profits plummet from £49 million in 1978 to £11.5 million two years later. Indeed, the situation was so bleak in 1980 that Sir John came out of retirement to replace his second son, Peter, who had taken control of the family firm three years before.
When Sir John let go for the second time at the age of 86 in 1982, he put Littlewoods in the hands of the first non-family chairman. That man was John Clement, previously from dairy and poultry group Unigate. A year later Pitcher was recruited as chief executive. With his background in high technology (Plessey Telecommunications and Sperry) and no experience of retailing, Pitcher, now 56, was not an obvious choice. But in keeping with the Littlewoods culture he was a local man, Liverpool born and working there for much of his life.
"We had a lot to catch up," he says of his early years at Littlewoods. "We had ineffective systems and a lack of clarity in our offer." The various branches confirm this analysis. Huntley speaks of lax credit policies and antiquated debt collection. Prodip Guha, group marketing director and deputy chairman of stores, points to random buying policies which left the stores without a clear direction. And finance director Barry Dale proclaims simply: "When I arrived (in 1987) there were no management accounts that we would recognise today."
The late 1980s saw, therefore, considerable investment in management systems. Home shopping alone has spent £35 million over the past five years putting in computer systems. And on the stores side, claims Pitcher, "we're probably the only retailer with manufacturing standard stock systems".
Apart from the investment in systems, 1984 saw the start of a steady refurbishment programme to update and revive the 116 chain stores, which were so run down that they looked, in Pitcher's words, like "a missing tooth on the high street". A new pastel-coloured logo appeared and Inside Story, a household department, was created in 1985. Index followed a year later, originally launched inside the stores, but eventually intended to be fully independent. (Currently just over half of the 96 Index stores are free standing.)
More thought has also been given to the products on offer. Marketing director Guha has put tighter control on buyers to ensure a consistency of approach. "I believe the only way we can go forward is to be value for money. Not glamorous but stable, sound and reputable." In this, he believes, Littlewoods has no direct competition when it comes to clothes. "It's partly BhS, partly M and S and partly C and A. But we have no excessive fashion content. What we do have is a high design content. I don't understand why people don't see the difference - good design won't go out of fashion."
Fashion and design aside, it is clear that Littlewoods intends to retain its traditional constituency among the lower socio-economic groups. As Guha points out, there is none of this management ego trip stuff of going upmarket so that people compliment you on your Littlewoods tie when you go to the golf club. "I don't want that," he says vehemently, the YSL on his shirt pocket discreetly visible.