Debenhams shrugged off what was expected to be a lack-lustre summer for retailers when it announced a rise in like-for-like sales this week. And, whenever companies buck the trend, we at Making Great Leaders tend to take notice.

Despite warnings from competing retailer Next that August had been an unusually quiet month, in the ten weeks to September 1 Debenhams recorded a 3.7% rise like-for-like sales – meaning they were 1.6% higher for the full year. 

 
How did the management team at Debenhams ensure it exceeded expectations in such a difficult trading environment that no-one could have predicted?

Although consumer spending is low in austerity times, many retailers must have expected the London games partly compensate for this by increased footfall and tourist traffic in and around their flagship stores in the capital.

Like all great leaders, the retailer’s chief executive Michael Sharp adapted to an uncertain and unpredictable business environment to meet the challenges and ensure Debenhams remained successful.  He told The Times that trading for August was very strong because customers liked the winter/autumn product range. He said that the business benefited from a ‘combination’ trading approach, which involved launching a new season of products, while at the same time selling down on existing stock. 

 
The retailer expects pre-tax profit to be higher than last year with Sharp identifying factors such as modernised stores and online sales as driving performance.

Like Sharp, effective leaders will have a track record of delivering short-term wins without compromising on long-term goals. When was the last time you, as a leader, unearthed a new opportunity to create a unique competitive advantage?

It is especially important for leaders to understand the working environment they are stepping into and plan for the future. But it is unwise to rigidly stick to fixed plans. A certain amount of flexibility will be required to respond to unpredictable events and changes affecting your business – after all we are operating in an increasingly uncertain and volatile business environment. Change will continue to gather pace with far greater impact than ever before.

Predicting how and when change will hit and the kind of impact it will have is becoming increasingly difficult, and future leaders will need to have the skills to deal with increasing levels of uncertainty. 

 
When it comes to retail, the challenges of the current environment are particularly great, especially in the run up to Christmas. This is a time when most retailers achieve about 40% of their annual profits. So far the festive forecast for retailers does not look good with analysts predicting no significant uplift in consumer spending from now until Christmas.  And some retailers are entering into this period in an already weakened state, such as JJB Sports, which will struggle to make it out of the other end if it is not bought.

Should leaders in the retail sector just accept the status quo that things are going to be tough and lower their expectations for Christmas profits? Of course not, like all other business leaders operating in uncertain times, those in retail will need to hit the ground running and make sense out of the chaos rather than procrastinate.

The real challenge here will be to deal with the present challenge of Christmas, while ensuring not to neglect planning for the future into next year and beyond.

After as all good leaders will know the future is not as far ahead as we think. With the rapid changes, fuelled by technological developments, the world is progressing at a rate that we have never seen before.

Tim Taylor
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