It's been part of the shopping landscape for nearly 150 years. Now Wellington department store Kirkcaldie & Stains faces turbulent times. Sue Allen meets new managing director John Milford.
JOHN MILFORD'S time behind the top desk at Wellington's flagship department store, Kirkcaldie & Stains, has been short, but he already has a plan.
Actually, he has three -- short, medium and long-term. No doubt shareholders will be all ears.
Last month, they received the painful news that profit had dropped almost 70 per cent to $290,000 for the six months to February. Worse still, dividends were being suspended.
But it is not just shareholders who are interested in how Kirks fares -- anyone and everyone in Wellington has a view on the store.
Too cramped, great shoes, brilliant sales, wonderful Christmas shop, out of touch, too much make-up and cosmetics, brands being cut without reason. Everyone has something to say about the store.
Mr Milford is undaunted by the task, but then he has more than 30 years' experience running department stores and retail businesses.
In the short-term bag is a "back-to-basics" approach, with inventory control, investment in a new point-of-sale system and improved customer service at the top of the list.
Once you know stock control is largely paper-based, Mr Milford's desire to get a firm grip on what's coming in and going out becomes clearer. He hints that some merchandise areas are likely to be dropped and some expanded.
Christmas 2006, traditionally Kirks' flagship annual event, pulling in people from far and wide, will be massive, he says. Events will also be held "that will be working towards the goal on inventory".
The first event is today -- a "never-to-be-repeated" $6 million clearance sale of back stock at Shed 11.
Small changes are already appearing: the cluttered women's clothing department has been recarpeted, racks cleared and discipline restored.
Among the medium-term issues is grappling with what seems to have been Kirks' problem for a while, a lack of focus on who its customers are and what they want to buy.
Kirks has responded by stuffing more and more into limited space in the hope someone will want to buy something.
It has 45,000 names on databases across the various departments, but the information is not centralised.
No detailed customer research has been done in the past five years.
"Do we know, as a business, who our customer profile and target is? No, not as well as we should do, and we are working on that."
The size and demographics of the Wellington region mean Kirks will always need to have fairly wide appeal, but change is needed.
What Mr Milford has described as "little gems" will also help Kirks in the medium term -- offering better financial products, better marketing and more exclusive brands, and upgrading its Internet business.
Kirks' bottom line gives an idea of how bumpy the ride has been for the store and its shareholders.
In 2003, profits were down 13 per cent to $1.42 million, in 2004 they were down 22 per cent to $1.1 million and last year they bounced back 9 per cent to $1.2 million.
Mr Milford describes the latest half year's 69 per cent profit fall as "not acceptable".
Though he will not comment on his predecessors, he says the results show the lack of a robust plan and a solid foundation.
"This is a terrible analogy, but I'll use it," he says.
"If you look at this business you can't just put a bit of rouge and lipstick on it and expect it to look really good. You've got to clean the skin, lay the foundation and do the makeover properly."
Michael Curtis, one of a group of property investors that in March seized 19.9 per cent of Kirks through LQ Investments, says they are "watching with interest for an improved result over the next year".
LQ's property expertise will be put to good use renegotiating Kirks' two leases soon.
They and the board are also looking at maximising return from the neighbouring Harbour City Centre, which Kirks bought for $29 million in 2002. The rental income from that building has helped Kirks stay afloat.
Mr Milford's arrival certainly provides a sense of history being repeated.
Kirkcaldie & Stains was established in 1863 by John Kirkcaldie, a Scotsman who had served his apprenticeship as a draper, and Robert Stains, an Englishman who had worked in the retail trade in London.
Their first shop was on the historic Bank of New Zealand site, now Old Bank Arcade. They moved to the present site in Lambton Quay in 1868.
Like them, Mr Milford learned the trade from the bottom up. He began his retail career in 1971 as a management trainee with Allders department stores in London. When he left in 1994, he was a director in charge of customer service for 44 stores and 7000 workers.
Allders went into administration in a blaze of publicity last year, but Mr Milford has only good things to say about his time there and credits the company with teaching him how to be a good shopkeeper.
He moved to New Zealand with his family after being shoulder-tapped by the head of Farmers in New Zealand, Terence Delaney.
He is now a fan of what he calls New Zealand's "egalitarian state".
"To have someone on the shop floor saying: `Hey, John, I don't think we're doing this very well', was a bit of a culture shock for me."
Mr Milford joined Farmers as a regional manager for Auckland, but after a management reshuffle he took over as general manager of its 63 stores.
He then spent four years at Eric Watson's Pacific Retail Group, eventually rising to chief executive of Pacific Retail Ltd, running its Bond & Bond, Retail Brands, Noel Leeming, Big Byte, Computer City and Living & Giving stores.
Though he admits he knows nothing about cars, his next move was to car parts retailer Repco, and from there to Kirks.
It was those early days as a management trainee, working in every department from sales tills to loading dock, that taught him the discipline of being a good retailer.
It also gave him what he describes as "empathy" with staff. It would be a mistake, however, to confuse that with sympathy for those who do not perform.
He has come from a background of targets, goals and tangible measurement. "I am a firm believer in performance; in what gets measured gets done," he says.
"If you don't give people objectives and they don't clearly understand them and if you don't help and support and train them, why would you wonder when they (the goals) don't get achieved?"
Kirks does not have a performance-pay system but one could hazard a guess it soon will have.
The real bottom line is that the more profitable a business is, the better it is for everyone, he says, allowing a business to reinvest, hire more staff and pay more to those it has.
His pay package has a healthy incentive-based element and he will have his work cut out to deliver.
But is he confident he can turn the business round? "Yes, definitely.
"My long-term plan is for this business to be here in 50 years' time and for Kirks to stay as a centre of excellence for retailing." AT A GLANCE
1954: Born, Portsmouth, England
1965: Cowplain Boys School, Hampshire
1970: Highbury Technical College, Portsmouth
1971: Joined Allders (operators of British department stores) as a management trainee.
1994: Moved to New Zealand to join Farmers
2000: Chief executive of Pacific Retail
2004: General manager of Repco Australia
April 2006: Joined Kirkcaldie & Stains as managing director
Married: to Janet since 1975, has two sons, Jack and James.
Car: None at the moment but wants to buy a Porsche (not new)
Book: Biography of Winston Churchill by Roy Jenkins
Pastimes: Fishing, shooting, reading, history and cars