How are you seeing retail around the world, particularly Europe and the US?
Régis Schultz: It’s tough and it’s volatile. You have good days and bad days, but it's difficult to see trends — in the last quarter we had a difficult November but a very good December. We are seeing this volatility pretty consistently around the world, but at the same time, there are also great things happening. When you have a great product, a great store and the right proposition, it works. It’s as simple as that — but also as complicated as that to make it happen!
What are investors looking for to drive value?
Régis Schultz: There is unfortunately little credit for delivering double-digit growth, as JD Sports has done. Investors are more interested in share buybacks than in growth. Share buybacks have their place but they limit a company’s ability to invest for the future.
Despite the many challenges the sector is facing, what's exciting you most?
Régis Schultz: There are few industries where growth can come so rapidly if you get the product right. In our industry, On Running didn't exist 10 years ago but it's now a £5 billion company. We have the same number one shoe in all our stores around the world so in our sector, it’s all about product and storytelling. If you get that right, you can be global almost overnight.
What is the role of the store in today’s digital world?
Régis Schultz: We’re picking up that our younger customers like being in store; they want to socialise, they want to be off their phone for five minutes at least. So our stores are our biggest and most important media because that's where the experience is. Our website is our shop window but the store is where it happens. It's about how you interact with the product and how you create an environment that is easy to shop. Is the product in stock? How long do customers have to wait to try on shoes? The number one complaint I receive is that the music is too loud — which is actually great as it means that we are doing our job to really focus on the young customer.
From left to right: Sally Elliott, co-leader of Spencer Stuart’s global Retail Practice; Régis Schultz, chief executive of JD Group; and Ian McGarrigle, Chair, World Retail Congress.
Where are you applying AI?
Régis Schultz: The most complicated thing in our industry is to have the right product in the right store in the right quantity. I was amazed when I joined JD to discover that we do ranging by store. So you will not have the same range in Manchester as in Liverpool, but this requires a lot of energy and tools to get it right. AI can help us with stock allocation which is a fundamental part of what makes a good retailer versus a bad one. Having the right product is key, but the merchandising and how much you give to each store and how you arrange the store is equally critical.
You have made several transitions between sectors during your career. How did your leadership approach vary depending on the sector?
Régis Schultz: I have worked in many different sectors but they have all been in retail. The biggest sector difference I have experienced was moving between food - which is high volume with fresh products — and non-food where there are actually many similarities across categories. This explains why many food retailers haven’t quite made it in non-food and vice versa.
Has your leadership approach changed depending on the ownership structure of the company?
Régis Schultz: Yes and no. What changes the most is the time horizon of the shareholder. The stock markets are short-term focused and increasingly so. Private equity tends to bring more mid-term thinking whereas family businesses can manage for the long-term. The main variable is the time horizon of the shareholder although the pressure on management to achieve goals, deliver profits and higher valuations etc remains the same.
How important is culture and what's your role in trying to drive and shape it?
Régis Schultz: JD has a strong culture so the trick has been not to break something that is working well. The most important part of culture in retail is to have a strong connection with the customer. If you already have the customer at the centre of what you do, there is no need to over-complicate.
If there was one standout quality that you think retail leaders need today, what would it be?
Régis Schultz: Passion — for the product, for people, for customers. Retail is hard work and requires real energy. Passion is your driving force in the competitive sport that is retail.
Régis Schultz is chief executive of JD Group. This piece is based on his comments at a drinks reception for senior retail leaders which took place at Spencer Stuart’s London office, co-hosted by World Retail Congress and Spencer Stuart.