took up his appointment, and a few days before the group announced its
half year results. Sales were down by 11 per cent for the same period last
year. The time had come, Maxmin decided, for the company – the whole
company – to get closer to its customers. He announced that from now on
all senior executives (including full-time board members) would be spend-
ing one day every two months working in a Laura Ashley store. While
there, they would be expected to serve customers, operate tills, unload
deliveries and (when necessary) sweep the floors. Maxmin had already
visited around 100 Laura Ashley shops himself in the preceding weeks,
observing that he ‘had never seen a business where so many people are
able to tell you what is wrong but are not empowered to do anything about
it’.^8 To prove the point, a ‘Profit Improvement Programme’ was introduced
in the worst performing stores. Responsibility for the organization of
fashion shows, local advertising, merchandising, stock replenishment, in-
store entertainment and refurbishment were all handed over to the shop
staff, who were allowed to keep a percentage of any increase in profits. A
shop by London’s Marble Arch subsequently turned in a 62 per cent
increase in profit, while a Liverpool store achieved an astonishing 139 per
cent improvement. The initiative was followed up by incentive schemes for
all shop staff.
Behind the scenes
An interim management team had already begun to tackle some of the
company’s underlying problems in the year leading up to Maxmin’s
appointment, though much remained to be done. First on the agenda was
distribution. For some reason Laura Ashley seemed incapable of getting its
products to the right place at the right time. A closer examination of the
company’s logistics operations revealed a hideously inefficient, disjointed
and tangled web. There was a sizeable in-house distribution department
operating five major warehouses around the globe, using a total of 10
largely unconnected management information systems. The group used no
less than eight principal linehaul carriers, and a host of other transport
suppliers, to serve 550 stores in 28 countries.
The warehouses were holding over 55,000 lines of inventory (though
only around 15,000 were current stock) ranging from 35-metre rolls of
fabric, through to hand-made wedding gowns, bottles of perfume, wooden
wardrobes, and tins of emulsion paint – only 5 per cent of lines were
common to all stores. Separate stockholdings existed for each of the geo-
graphically defined retail divisions, sometimes within the same facility.
The result was that when a store in Dusseldorf experienced a stock-out on
an expensive bedspread, it was told that the item was unavailable, even
442 Relationship Marketing