"Whatever happens, I was in charge when this was happening. I've got to take responsibility. I've made huge mistakes. It's been a massive learning experience. I didn't have a full understanding of this business." Retail Adventures owner Jan Cameron.
She speaks of her experience owning and operating the discount retail chain, which today was forced to axe a further 630 jobs as administrators complete the closure of 32 more stores.
So how did the founder of Kathmandu, an experienced business woman and retailer at that, fall so hard at Retail Adventures?
Lack Of Understanding
Cameron is the first to admit that she didn’t fully understand the market she was getting involved in. Sure, she had loads of retail experience from starting up and succeeding with Kathmandu, but that wasn’t discount retail.
"It is the cage-fighting of the retail industry – if all retail is warfare, this is at the guerrilla end of the scale," Cameron says.
That such a seasoned player could move into a different niche of the same industry and fail so badly is a great lesson on the importance of market specific know-how.
Do your research, and do it well.
Super Sized Operations
To successfully grow a business it’s crucial to have adequate infrastructure in place to scale operations to meet demand. But too much capacity can be seriously expensive and work against you.
Retail Adventures suffered from the latter and ended up with overhead costs designed for a much bigger business. With the infrastructure to service 1000 shops, they were only operating 400.
Plan to expand by all means, but ensure the customers are there to fill that capacity first.
Crippling Company Culture
Cameron says that from the time she took over there was a poisonous culture in the company that she just couldn’t eradicate.
“There was a really diabolical culture that existed in the company that I worked very hard for the last three years to root out,” Cameron says, “A high level of resistance to change within the company; an unwillingness or inability to deliver the radical change that has been required.”
As most small businesses owners appreciate, be it through experience or education, company culture is one of the key determinants of success. Without staff on side, you’re seriously hamstrung in what you can achieve.
Recruit well and review consistently.For more small business lessons, tune into KBB, 11am Sunday on 7!