Case 6.1 Relationship marketing: Lessons from
Laura Ashley
This case was prepared by Helen Peck, Cranfield School of Management, as a basis
for class discussion rather than to illustrate effective or ineffective handling of an
administrative situation.
©1995, Cranfield School of Management.
A new Chief Executive
On 17 July 1991, Laura Ashley Plc, the British-based fashion and furnishing
retail group, announced that it was about to appoint Dr Jim Maxmin to the
post of Chief Executive. The announcement came almost a year after the
resignation of the previous incumbent. Laura Ashley had been one of the
retail stars of the 1980s. But, like so many other speciality retail success
stories of that decade, the company appeared to have crumpled under the
strain of high interest rates and deepening recession. Difficult trading con-
ditions across several key markets, crippling interest payments, and order
processing problems were cited in its 1990 annual report as the cause of the
difficulties. Press commentary was more circumspect, remarking on how
Laura Ashley seemed to have lost its way since the untimely death of its
eponymous founder, some four and a half years earlier. Hopes were high
that Maxmin would now provide the leadership and direction needed to
revive the business.
Finding a new Chief Executive had not been easy. A firm of headhunters
charged with the task had failed to find a suitable candidate. Thereafter the
post was advertised in The Economistand the Financial Times. Jim Maxmin,
a former Director of World Retailing at Thorn EMI, was eventually selected
from over 500 applicants as the man most likely to succeed. To some
onlookers though, Maxmin – an energetic American with a doctorate in
philosophy and a fondness for transatlantic marketing jargon – seemed an
unlikely choice for this most demure and English of retailers.
Company history
In the summer of 1953, Bernard and Laura Ashley chanced upon some
attractive hand-printed head scarves during a holiday in Italy. Back home
in the kitchen of their London flat, the young couple were convinced that
they could produce something similar themselves. With an initial invest-
ment of £10, a batch of 20 scarves was produced and sold to a London
department store. Encouraged by the early success of the head scarves, the
432 Relationship Marketing