Perfect!
It comes down to a matter of not changing the culture.
You have to remember that there were a few things at play for the entire company.
* It was Woolworths owned for longer than a lot of the staff had been alive. Thus the culture had been built and ingrained into each individual working for the company.
* Although Woolworths was considered 'The Devil' in some circles, it was always there to bail the group out when it fell short. Annual Reports will back that up. 4 Million here, 8 Million There, Impairments for store upgrades etc.
* When a corporation will cover your mistakes, and shortfalls, you build a culture that is terribly myopic, in that they continue to spend $100 to make $1, rather than spending $1 to make $100. If a problem wasn't resolved, the solution is to throw more money at it.
* Debra Singh, the exiting WOW-GM was an HR manager previous to Dick Smith, Alvin Ng, before Debra, was a WOW finance manager, in Big W - From memory. Many of the upper operations managers positions were either from supermarkets or Big W. They continued to run the business 'The Woolworths Way' when they took their positions rather than taking any new initiatives.
* Anchorage / Nick took control and watched the culture of the group for a few months before they had been given full control. September to January I believe. Plans for turn-around came thick and fast. Adjustments were made on the fly.
* Internally there were a few initiatives; Job cuts, redundancies, closing a distribution centre and moving to 3rd party logistics, building in rebate systems and for return and rebate stock etc.
* Stock in store was OWNED by the company. It wasn't on consignment. Which is the operational model of most companies in C/E. So the cost of the stock had to be recovered at retail sale or the company wore any losses if they could not get a manufacturers rebate for slow moving lines.
If it were to continue as an independent company, it would have surely failed in due time, without radical change of buying processes, marketing and, to some extent, management processes at store level.
* Having buying teams who were trained with a corporate safety net and an attitude to match that often, at times, missed the trend or acted too late.
* Flexibility in pricing was restricted because of the purchase and hold model rather than the consignment model.
* Reduction in wage budgets, always the first line to be attacked in retail, that impaired the level of services customers had become used to over the years.
* Reduction of network size to manage costs. Strip sites that simply did not make money - there were a few during the initial closing from 330 to 270-ish just before the sell off to Anchroage. There could have been more.
* Limited the flooding of stores with excessive home brand stock, locking up cash flow. This was evident during the closing sales when there was nothing but DS Antenna cables or adaptors by the box loads in some stores.
* Not managing those responsible, or not having those responsible manage their categories that would allow for maximum stock churn.
I could go on, but you get the point.
* Without the WOW bail out money they were used to getting, the company was forced to borrow from the bank, on the notion that it was an ASX listed entity with 300+ stores, so it was given its money - bad habits, bad culture, bad management and it wasn't able to make the money back. The bank demanded payment. It couldn't be made so they sent in administrators.
If you ask me, that's how and where it failed.
Media can point fingers as much as they like at anyone they like.
I don't dislike Nick, and never met the man personally. It is sad that his entire career has been tarnished by this 'escapade'. It seems to me that he will ultimately be the one that takes the fall for the failure.
Disclosure: I worked for DSH for just under 10 years. All comments are my opinion.
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