A Pennsylvania Yankee In Laura Ashley's CourtRichard A. Melcher
If James Maxmin had met Laura Ashley in the 1960s, they probably wouldn't have hit it off. Then a graduate student in England, the Philadelphia-born Maxmin, like many others of his generation, went to the barricades against the Vietnam War and the Establishment. But to Ashley, then in the early days of weaving her worldwide fashion empire, the turbulent and shocking '60s only reinforced a commitment to stately, traditional design.
Flower power, meet floral prints. Since September, the 49-year-old Maxmin, who abandoned a PhD in the philosophy of religion to hawk soap, Volvos, and home appliances, has been shaking Ashley's $498 million dress and home-furnishings company to its foundation.
AXMAN. Maxmin, most recently a top Thorn EMI PLC executive, is a dramatic change from the inbred and infighting managers who ran the retailer after Laura Ashley died in 1985. He oddly blends old-fashioned tough-guy management, information obsession, and New Age aphorisms. Catch phrases such as "cutting people loose" and "employee empowerment" are the stuff of his normal conversation. In one of his first presentations to staffers after taking over as chief executive, he wistfully talked about doing away with headquarters and all titles.
So far, however, he has mostly done away with jobs. Since he took over as chief executive officer -- the third top man in little over a year -- he has dismissed more than 100 managers, including heads of the British and U. S. divisions and most of the merchandisers in the U. S. In all, he has trimmed 15% of overhead. The payoff has been a 31% jump in the share price of Laura Ashley Holdings PLC, from $1.24 to $1.62.
Keeping up with Maxmin means moving at high speed. He has been racing around the U. S., Europe, and Asia, visiting shops, commissioning customer research, and interviewing employees. Powerfully built from years of swimming and rugby, he goes full throttle even when relaxing. Many weekends, he jets from London to Boston to pick up his longtime companion, Harvard business school professor Shoshanna Zuboff, for a three-hour drive to his Maine farm. There, he unwinds by rebuilding stone fences and chopping wood.
But it will take a lot more than energy to turn around Ashley, which just a year ago was on the verge of going bust. In the topsy-turvy retail environment, Ashley had become something of a blur. "The Laura Ashley look is as unimportant today as automobiles with running boards," says New York retail consultant Alan G. Millstein. The company survived only through the indulgence of its banks and the infusion of $70 million from its Japanese partner, retailer Jusco Co., in return for 15% of the equity.
OUTSIDER. To many, Maxmin was an unusual choice to head Laura Ashley, as he had no fashion experience. But Laura's widower, Sir Bernard Ashley, liked his energy and enthusiasm. Recalling the first encounter between Maxmin and Ashley, fellow board member Hugh Blakeway Webb says: "They went eyeball to eyeball like two prizefighters." Ashley, 60% owner, remembers being "pretty exhausted after half an hour."
Maxmin's turnaround strategy has a few components. First, he wants to make the company more professional. In the past, it had no market research and woefully inefficient information systems. Next, he would like to give Ashley a better-defined image, promoted with a worldwide ad campaign in 1992. Taking a cue from Body Shop International, the cosmetics chain, he wants customers to view Ashley as an environmentally friendly retailer. He also intends to license more home-furnishing items, such as tablewear and linens, because it's an inexpensive and profitable way to heighten Ashley's visibility.
Finally, he wants to mix its floral patterns with trendy designs aimed at younger customers and career women. Still, he has no interest in appealing to a vastly expanded customer base. "Ninety percent of shoppers are never going to like us -- and that's our strength," he says. Maxmin's own goals: doubling sales in five years and achieving 12% returns.
For employees who are still around now that Maxmin has cleared the underbrush, it's a refreshing, if brutal, change. "His visibility and hands-on approach have made a big difference to morale," says Jo O'Connor, director of garment design. "Enthusiasm was lacking from top to bottom, because we were without leadership for so long."
Maxmin's commitment to employee involvement appears genuine. On a recent visit to Ashley shops in Windsor, England, Maxmin quickly located the store managers and teased out of them a bewildering catalog of suggestions and problems with his now-familiar question: "If I sold you this shop for one pound, what would you do?"
Manager Kate Fowler, flush with excitement, complains about being stuck with slow-selling items -- but unable to restock hot-selling jeans and black velvet dresses. Maxmin tells her that, for the first time, Ashley is installing bar codes that track inventory and will let her order items from other shops. He adds that only now are consumers being surveyed about what Ashley means to them and what they would like to wear. "Brilliant!" Fowler exclaims.
OUTSIDER. Although his American accent immediately pegs him as an outsider in Britain, Maxmin certainly knows his way around. After a boyhood in suburban Philadelphia, Maxmin went to Grinnell College in Iowa before opting for graduate school overseas. But riots closed the Belgian university he planned to attend, so he headed first to Cambridge, then the University of London. Following a short stint with Unilever PLC selling soap door-to-door in London's East End, he decided to ditch academia for the more profitable corporate life.
As marketing manager for Volvo in Britain, he played a key role in repositioning the car around the themes of safety and reliability, images that had failed in that market. "He was ahead of his time in applying market segmentation to the car industry," says John D. Lovering, finance director at British retailer Sears PLC, who worked with Maxmin at Volvo. Maxmin went on to head the $3.2 billion home-electronics unit of Thorn EMI.
Plenty of hurdles lie ahead at Ashley. Iwao Matsuoka, president of Laura Ashley Japan Co., worries about any attempt to play down the company's traditional floral image. "The floral-print design is our identity," he says, adding that there have been "arguments" with London about how to distinguish the new career line. Maxmin must also move fast to shore up the U. S. operation, which is now bereft of key management. Despite his warm feelings for Maxmin, Bernard Ashley figures that Maxmin has no more than two years to prove himself. But that's all right with him. "We're in a market where urgency is the key to survival, and everybody should be judged on performance," he says. Nothing New Age about that.