On the Cover: LIWA CEO Mark Tesseyman talks about the pursuit of excellence

“How can we achieve excellence without failing sometimes and learning from such failures,” observed Mark Tesseyman, Chief Executive Officer of Abu Dhabi-based retail group LIWA Trading Enterprises during an exclusive interview with IMAGES RetailME.

Tesseyman is someone who believes good retailing is about change, evolution and sometimes even revolution. Importantly, someone who is tirelessly in the pursuit of excellence. Someone who defies conventional norms. He believes if you procrastinate in an ever-dynamic industry like retail, you’ve most likely lost the moment. Someone who is unabashed about his fondness to work every day no matter what because “no two days in retail is ever the same.”

In retail by accident

Now, here’s an interesting fact about Tesseyman – 40 years ago, his journey in the retail industry started by accident.

“I wanted to be a professional sportsman. That was my original career plan. I used to play scratch golf and cricket,” he shared.

After giving up his aspiration to become a professional cricketer Tesseyman was waiting to start university when the universe conspired, and he got hired by his friend’s father who owned a chain of stores that sold sports goods.

“I was passionate about the product that I was selling and also got used to having some money in my pocket,” he recollected with a smile. The time to go to university came and went; he didn’t go. Tesseyman got an MBA degree many years later.

Learning by doing

From one sports goods store Tesseyman started managing a network of seven-eight. Those were the days when everything was done manually which meant he had to multitask. From replenishing stock, overseeing operations, handling customer relationship, he did several things.

“I worked there for a couple of years, learnt a lot and eventually left to join a bigger retail company.” That company was Next in the UK where he worked for seven years.

“Soon after joining Next, I realised that the business ethos was built around innovation, change and doing things differently. At Next I never did the same job for more than six months. I learnt, grew and progressed. I got an area manager’s role at the age of 20 overseeing a business division with a turnover worth GBP30 million. At Next I also learnt the core principles of retailing – everything from buying, merchandising to selecting real estate, audit, finance, HR, operations. It’s also at Next that I understood how fond I am of the product and number aspects of business,” Tesseyman shared.

Middle East wasn’t part of the “masterplan” either

Tesseyman’s Middle East journey that started 15 years ago also happened by accident. “It wasn’t part of my masterplan,” he admitted.

At the end of 2008-09 when the global financial crisis happened, Tesseyman was on the board of a private equity company in the UK that was struggling slightly. So, he decided to exit.

“One of the divisions of that company used to franchise into Alshaya Group in the Middle East so I knew a bit about the business model. Fortunately, I got offered a job by Alshaya and arrived in Kuwait, which was a bit of a culture shock initially. But it’s amazing how adaptable we can be if we are truly passionate about something – in my case its retail. I got into the franchise world, learnt more about different aspects of franchising and enjoyed my time at Alshaya,” he shared.

After Alshaya Tesseyman moved to LIWA almost eight years ago and describes it as an “exciting journey” so far. Although LIWA wasn’t performing very well when Tesseyman assumed office, over the past seven years business got better in terms of profitability. There has been a significant double-digit growth in sales year-on-year.

“Even though retail has become tougher at the end of the day, it’s a simple business. You’ve to give customers what they want, when they want and at a price point that they would be comfortable with. A lot of retailers tend to make it complicated,” he observed.

Masterminding transformation

Needless to mention that the pandemic in 2020 rapidly transformed the retail landscape across the world compelling businesses to think differently. Changes at multiple levels was the need of the hour. “There is hardly any area of our business where we didn’t tweak something,” Tesseyman stated.

“At the start of the pandemic, around the time of lockdown in the UAE when we stayed home for about three weeks the leadership team and I remotely rewrote LIWA’s growth strategy for the next five years redefining our business plan completely. We evaluated everything – what’s working and what’s not, what direction do we want to take, are there things that we should do differently, is the business model right. We took a deep dive and looked at all our brands, evaluating whether they were strong or weak. In which sectors, categories and countries there are growth opportunities. Then we started executing our three-pronged business strategy as the pandemic was unravelling.”

• Real estate: One of the key areas of transformation was real estate and we took the opportunity to renegotiate rents and terms, signed new leases when most players weren’t signing any deals. We aggressively pursued this strategy across markets where we are present.
• Franchise partnerships: Then we looked at our business models with brands with a view to understand who our strong franchise partners were and who weren’t. Initially it was scary, but it helped us to manage our cost on forward commitment of goods. We reduced our commitment on stock by almost 45% which was needed at that time. While at it we also renegotiated our contracts with franchise partners through open and honest conversations around royalty. We had to explain to some of our franchise partners that if royalty remained the same, the brand wouldn’t survive. The choice was simple, reducing royalty to maintain profitability and growth versus shutting shops. Fortunately, we managed to sign some good deals.
• Brand strategy: Even before the pandemic hit, we had already started researching some sectors with untapped growth opportunities. This helped us to come up with our homegrown brands including Simply Kitchen which is a mirror image of a franchised brand that we used to have (that stopped international franchising). We used our knowledge of the business model to create a homegrown brand with a distinctive shop-fit and a value proposition. Two years ago, we launched the lingerie and loungewear brand Isla & Evie which is already an approximately $12 million business. Post-pandemic manufacturers and factories have changed their business models and started offering design services which made it easier for us to launch brands with quicker time to market at a lesser cost. It was a brave decision to increase the portfolio of homegrown brands, but one that has paid dividends.

Overall, post-pandemic Tesseyman is in favour of short-term goals to remain agile. “I’d think of long-term commitments only if the profitability model of the business is secure and there will be equity and value in the long-term. With niche businesses trialling with short term contracts is more prudent,” he explained. The days of 30 stores in 3 years promise to franchisors are perhaps gone, he emphasised. “Sometimes caution is better than valour unless it’s a proven success strategy. In my opinion, the days of splurging money and speculating are behind us.”

What’s next?

A quarter into the year already, how has business been for LIWA?

“January was quite good, while February and March were more difficult. We have to be agile to ensure that our bottomline is protected,” Tesseyman responded.

Is there anything new in the pipeline?

Without giving out much, Tesseyman said with a chuckle, “There’s always something new in the pipeline.”

“Going forward we are looking at developing more product categories versus creating more brands. For example, we are developing beauty and accessories for Isla & Evie. These will be sold through our La Senza stores as well as in two standalone Isla & Evie stores at Dubai Hills Mall and City Centre Deira. On the other hand, we must find a sweet spot for growth for our home segment which did brisk business during the pandemic. Surprisingly, kids wear has been quite tough requiring us to take a deep look at those business models to ensure staying on the growth path.”

There is one sector that LIWA would like to explore more, Tesseyman shared.

“Luxury has always been a largely resilient sector, a vertical that we haven’t explored yet. We may do a bit of scrutiny at some point as there are many French luxury businesses in the region. But there are more premium luxury brands around the world that aren’t present here as standalone entities, which might be an untapped growth opportunity.”

Besides creating homegrown brands, would franchising be the only model that LIWA will follow? Or buying is an option too?

There is always a possibility of consolidation in the market, Tesseyman said. Asked if LIWA will explore getting into new markets, he said it will possibly be newer channels, such as wholesale, as opposed to markets.

“We will gradually grow our e-commerce business too. In terms of brick-and-mortar footprint we plan to touch the 350-mark across our brands by end of this year.”

Will retail see a golden era…again?

In 2020 the pandemic hit leading to supply chain disruptions that worsened due to geopolitical issues. Now there are projections of protracted financial difficulties. In such a scenario will retail see a ‘golden era’ again anytime soon?

There will be a golden era for individual niches with a deep understanding of the consumer to leverage their spending power, Tesseyman observed. Growth across the board seems doubtful. Some businesses with clear strategies will enjoy market share but the challenge is to maintain and grow that market share.

“I hope the economic situation will improve. However, a bigger concern for me is the talent situation. As retailers we have to be paranoid about getting calibre and talent into the business and retaining them,” he concluded.

Up Close & Personal

While wellbeing at workplace is a big focus area for organisations, there’s limited discussion on mental health of leaders who are hardly able to show their vulnerabilities even though it can get lonely at the top. Would you agree?

Yes, it can be a bit lonely at the top. At the same time, I’d like to say that people aren’t quite used to seeing their leaders weak or vulnerable especially when the going gets tough. They must be made to feel safe and confident, and that’s a leader’s responsibility. In any case, I believe that retail as an industry is everchanging and evolving, therein creating a sense of resilience among leaders.

Through highs and lows what keeps you going?

Being a self-starter with an urge to do something new every day and the opportunity to work with passionate people are a few things that keep me going.

Do you ever shy away from making mistakes? How accepting are you if a team member makes a mistake?

Recently we implemented a system to improve our merchandise planning that didn’t work. We got it wrong, but it was a big learning. Our business model is hybrid sitting at the intersection of private labels and franchised brands. We needed a system that works for both models. Even after due diligence certain decisions don’t go as planned, and that’s alright. I’d rather have people making decisions even if they go wrong sometimes than not making any decision at all. If we don’t fail sometimes, we won’t learn.

Do you ever go back and reflect on a piece of advice from your mentor(s)?

During my late-20s, early-30s I had a boss with whom I worked for six-seven years. He had an interesting character trait. When I performed poorly, he never gave me a hard time because he knew I’d given myself a harder time. But when I did well, he would always push me harder to do better. The lesson I learnt from him is to be unreasonable if required in the pursuit of excellence. It’s easy to become complacent when we are doing well, therein the need to push harder in such times is perhaps important. The best business models are those that never stop looking inwards with an aim to evolve with changing market demands. I remember having another boss who used to say, ‘if you are in retail business, make sure you’re on a train that’s going in the right direction’. It has stayed with me and over the years I’ve became more mindful about making choices for the right reasons.

If you had the opportunity, would you go back in time to take a decision differently?

Today when I look back, I’m contented with the way my journey has shaped up. I work in an industry that I love even though retail happened to me by accident. And I want to keep working till the time I can.

Rupkatha B