The Hindu Business Line : Retail sector sees big ticket exits

Bangalore, Aug 20 Some big exits in the recent times have shaken the retail sector. Big ticket exits including Mr Andrew Levermore of HyperCity Retail, Mr N.C. Venugopal of Nilgiri’s and Mr Sumant Sinha of Aditya Birla Retail have created a stir in the industry.

While some HR experts term it the “natural end of the growth cycle for these professionals,” others say it’s a fallout of hyped up expectations. “The sector is following a path where the cost curve is ahead of the growth curve. As the sector is witnessing sluggish growth, there will be top-level exits,” says Mr K. Sudarshan, Managing Partner, EMA Partners International, a global search firm.

The industry has disappointed its top leadership with its slow growth, agrees Mr Sunit Mehra, Country Manager, Hunt Partners India. “This is very typical of the Indian situation for any new industry, where expectations of potential are always far higher than reality.”

For retail in India, it’s been five steps forward and three steps backward, says Ms Gauri Padmanabhan, Partner at search firm Heidrick & Struggles. Although the churn in leadership is to some extent a result of puffed up expectations, several companies also brought in experienced expatriate leadership like Mr Levermore as a short-to medium-term strategy to build expertise and bring in some best practices into the business.

Frustration

“Expatriate leadership have been frustrated by the slow pace of growth and decision making — they came here expecting more,” she says. But the good news is that in many cases the reins would now be taken up by leaders with a longer-term stake in the organisation, feels Ms Gauri.

Companies are also reorienting business strategy for its second phase of growth. Mr Mehra of Hunt Partners suggests that promoters need to adjust their expectations with market realities. “Tempered expectations need to be sold to professionals at the time of joining so that they are not misled. Both the promoters and the professionals need to be aligned on targets.”

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