Zyda Rylands, CEO of Woolworths SA, has a tough job at the best of times, but the pressure has intensified as the group becomes increasingly reliant on local operations to counter the dismal performance of David Jones in Australia.
Group CEO Ian Moir is spending more time in Australia trying to fix David Jones after a number of high-level resignations and a R7bn write-down of that business early last year.
In SA, Woolworths' food business remains solid despite the past two years of tough economic conditions. Sales continue to grow, albeit at a slower pace in the latest interim report period to December.
The problem area domestically is apparel, where sales have declined for some time. The retailer reported a 2% decline in sales at its South African clothing operations in the 26 weeks to December 23; analysts attribute this to the failure to find a balance between attracting new consumers and keeping the old ones happy.
Rylands says Woolworths went way too young, particularly in the modern apparel brands.
"We should be catering for a customer that is anywhere from 25 to 35-plus, but I think we were probably catering for an 18-year-old. Dresses were too short, there was too much skin showing; so the older, modern customer . We completely alienated her."
The issues in apparel are likely to persist, at least for a while. The new head of the division, TFG director Manie Maritz, has to wait out a restraint period and can only come on board in June next year.
Woolworths chose Maritz, who delivered good growth as MD of Markhams, after interviewing candidates from SA and abroad.
Analysts are concerned not only that the waiting period will delay the urgently needed turnaround in the division, but also that Maritz's background is menswear and the problem at Woolworths is women's wear.
"You can only imagine that was a real deep consideration of mine at the time," Rylands says.
"The choice was for someone who understands South African markets. And someone who has a fantastic reputation; a talented merchant who built a really great business in SA."Apart from a vacuum in leadership in apparel, concerns have also been voiced about the top leadership team of the wider group.Shane Watkins, chief investment officer of All Weather Capital, says that when you buy into a company "you are backing a strategy and the ability of management to execute on that strategy"."The Woolworths strategy simply may not work and in terms of management, I just don't know who I'm backing. All the main players have either retired, resigned or got fired," he says."In Australia, the original management team has gone; in SA, where apparel is the largest driver, the appointee [Maritz] only arrives next year; even [chair] Simon Susman is stepping down at the end of this year."And Ian Moir, the architect of the current strategy, retires himself within the next two or three years. Who is the jockey I'm backing? I really don't know."Asked about store expansion, Rylands says: "We have slowed down our store openings in fashion. There will be more growth in food. We'd look to do smaller stores as and when it's appropriate."And what are constrained consumers spending on?"We have still seen resilience in our consumers, particularly in the food space, but we've also had to change how we see food and drive a good value proposition for customers, together with the fantastic innovation we have."Obviously interest rates hurt, the high electricity costs and increased fuel price impact consumer confidence . we're hoping the president will have a firm mandate from the election because being in limbo is the worst place for us," she says."The basics in fashion and commodities in foods are doing very well for us."Rylands expects all food categories to grow, with health- and wellness-related categories doing particularly well. Food stores with homeware and beauty offerings are also thriving.But perhaps the most pressing question is whether Rylands will be the next group CEO when Moir leaves.Not much is known about her. She prefers to stay out of the public eye, but those around her say she's very hands-on.She says: "I think I will always feel pressure. Pressure to do our best, pressure to shift our apparel business, to maintain our food business growth, because our competitors are getting more determined and aggressive."
Rylands says it feels as if she's been in retail "just about all my life". In the 1980s, as a student, she worked in the sector. Also, her father was a tailor and was always trading goods.
She's been working for Woolworths for nearly 24 years, having started in auditing (she's a qualified accountant), and has worked directly in nearly all parts of the business. Her roles have included human resources director, COO and MD of the food business, among others.Would she ever want the top job?"I want to make a success of this one and I still have the fashion business to sort out," she says."Success for me is when we see the performance being positive and the fashion business can sustain positive performance. So I would hope that we see a positive trajectory this financial year and that trajectory is sustained ."My job is to make sure that SA delivers . and that even in the most difficult circumstances we will always do the right thing."shevela@sundaytimes.co.za..