Transcript - Bill Grimsey, Chief Executive, Focus (DIY) Ltd
Nicholas O’regan, Professor of strategy and innovation talks to Bill Grimsey about changing business strategies to adapt to the current trading environment.
Nicholas: Bill, Focus like many other retailers, is finding life difficult in the current environment. To what extent are Focus’s current difficulties due to environmental factors and what extent due to the value proposition and merchandising strategy?
Bill: Well all of the problems that we’ve faced in the last 12 months have been created by the current environment.
We do have a business that has a fundamental problem with its proposition and that’s why we bought it because we specialise in turnarounds, but we didn’t anticipate the worst recession in living memory when we bought the business, and that has accelerated a decline in our top line sales translated into bottom line profit issues which then knocks onto cash flows, which then knocks onto certain liabilities that you have to deal with. So, we have to say that everything is really been exasperated by the current environment.
Nicholas: You recently tried to change the product range and allocate parts trading floor of pet related products what other industry changes do you need to make to retain a focus on profitability and long term sustainability?
Bill: Oh, an enormous number. The recent change we did, it was what we call a space optimisation project, which we were taken the number of items that we sell, we call the SKU’s stock keeping units, down from 18, 000 down to 13, 000 and that free... and we decided to re-enter the pet care market, because focus had a history in pets before, in order to get incremental sales in the space that was created, but a very small part of our strategy.
Our new strategy on ranging is based on a good better best hierarchy. We will have a entry point products called Payless. We will have better products called World of. We have World of Colour, World of Lighting, World of Home and World of Garden and then we stick a brand on the top wherever necessary. We’re trying to keep things simple, and that architecture will take a number of years to develop and get in place.