Boss who's Next on the retail-guru radar
His entry in Who’s Who is just four lines long. He is a retailer with an empire which rivals Sir Stuart Rose’s M&S and Sir Philip Green’s Arcadia.
But he has no knighthood (as yet) and virtually never commands the headlines in the national newspapers or gossip columns. The company he runs held its last shareholders meeting in an industrial park in Leicester and at 42 years old he is one of the longest serving FTSE100 chief executives. Indeed, because of his tender age it is quite possible that he could — if he chooses to stay in retail — become one of the UK’s longest serving bosses. Yet despite all of this, Simon Wolfson, scion of one of Britain’s best known business dynasties, has carefully managed to stay beneath the media radar.
Until recently he only attracted attention at the regular dates in the financial calendar when the company reported its trading and profits results. In the last year the group attracted a minor shareholder revolt when the pay committee altered the terms of its bonus scheme mid-recession to make it easier for the top executives, including Wolfson himself, to hit payout targets. But this was unusual. However, in recent months the quiet man of British business has slowly been raising his head above the parapet. In an appearance on the BBC’s premier political discussion programme Question Time, the Cambridge-educated Wolfson showed himself to be both an articulate and passionate defender of free enterprise.
We should perhaps not be surprised. His father, Lord (David) Wolfson of Sunningdale, served as Margaret Thatcher’s chief-of-staff at Number 10 Downing Street from 1979-85. It was the golden period for Thatcherism when many of the labour market, free market and privatisation reforms were in train.
Simon Wolfson has disproved the theory that family succession in public companies (especially when the family shareholding is relatively small) rarely works. Wolfson joined Next as a sales consultant at its Kensington branch in 1991 when his father (who went on to become chairman of GUS) was chairman. He rapidly moved through the ranks, joining the main board in 1997 aged just 30 and moving up to become chief executive in August 2001 at the age of 33. He was one of the youngest ever leaders of a FTSE100 company.
In the early 1990s, the shares of Next fell to a few pence as the company almost fell victim to a period of high interest rates and recession as Britain struggled to hold its place within the exchange rate mechanism. But working alongside David Jones, who took over from the legendary George Davies (who went to work with Asda and M&S), the younger Wolfson helped to steer Next back to safer waters.
The group currently operates 499 stores across the UK, making it the third biggest clothing retailer behind M&S and Green’s empire, and has some 50 franchise operations overseas, from Ireland to the Middle East. What has set it apart from some of its competitors is the Next Directory, a home shopping catalogue that accounts for more than 20 per cent of sales and distributes everything from trousers to electrical goods.
At present the group is back as a stock market favourite. Despite a 93 per cent rise in Next’s share price over the past 12 months, brokers have upgraded their forecasts for the shares in line with improved profits guidance of £490m to £500m for the year. This is not far short of the £600m-plus expected from M&S.
The retailer is pushing ahead with expansion and plans to open 300,000sq ft of new space in the year to January 2011. Over the past 12-months or so, as the worsening state of the economy and the public finances have dominated the national agenda, Wolfson’s comments on the state of Britain have become bolder and are no longer just confined to the retail sector. This, together with his donations to David Cameron’s Tories, have led to widespread speculation that he could end up following his father into a job at Number 10, or become a minister with a seat in the House of Lords.
He already is numbered among the prime minister-in-waiting’s outside business advisers and could provide useful knowledgeable ballast in a team often criticised for lacking the commercial and financial experience of Tory frontbench teams of earlier generations. Asked earlier this month whether any of this was on the agenda, he told a conference call: “Nobody has made any offers to me.” That to many observers sounded like a shrewd political answer.
In his first 2010 conference call with analysts and the financial media, Wolfson talked as much about politics as the prospects for Next: “One way or another the government’s got to reduce spending or increase taxation over the next four years by a significant amount. My guess is that we will see the hardest hit early,” said Wolfson.
The Next chief executive’s incursion into the political arena has not gone unnoticed. Writing in the New Statesman last month, political pundit James Macintyre noted that in 2007 in an economic policy submission to Cameron, Wolfson had proposed the Tory party abolish inheritance taxes. Macintyre calculated that if this were to happen, than Simon Wolfson would reduce the liability on his estate by up to £540,000.
Maybe, but given Wolfson’s age and wealth it hardly seems likely that the Next chief had this in mind. Instead he was advocating a popular tax gesture which George Osborne, for the Tories, partly adopted. Having placed himself in the political arena — after years in the background — Wolfson will have to start getting used to the barbs.
Alex Brummer is City Editor of the Daily Mail