Approach: I was at Gap when the GFC hit, and it was really tough, because we had just done a lot of work on repositioning the brand, and it was like, really? Here we are focusing on all the things we need to do to turn this business around and make it relevant, and now we’ve got this big macro crisis being thrown at us.
I distinctly remember feeling like we were going up another hill. But as much as it was difficult, it felt like we were all in it together because it wasn’t something we could control. It wasn’t like marketing had let us down, or the product was bad, it was about coming together and just trading through it, but knowing that we were going to go through a bumpy period.
Advice: The key thing to remember is that your role is to lead the team through. You can’t get caught up in the drama, you need to be very calm and focused, and understand that your job is to navigate the business during this challenging time.
You’ve got to be communicating to your team more than ever because they’re nervous, they’re worried and they’re watching the news. So you’ve got to make sure that they understand that you’ll get through and how you’re going to do that.
There are customers out there, it’s just that it’s a market share play now, so you’ve got to lift your game, you’ve got to be better than your competitor and closer to what your customer wants. You’ve got to respond faster. All the things that we’ve just done to get through Covid, we’re going to have to do again to get through this.
Eric Morris, CEO of Brand Collective
Experience: I’ve gone through two major financial crises. The first one was the Asian financial crisis when I first moved to Hong Kong with Reebok. That was ‘98. It was a really tough time. Sentiment was down, everything was quite depressed. The second one was the GFC [global financial crisis] when I was at PAS Group.
Approach: [The Asian financial crisis] coincided with a bit of a restructure to centralise certain functions out of Reebok’s Hong Kong office as opposed to 13 different countries. We didn’t have an enormous retail footprint, it was mainly wholesale distribution, so we could actually invest in the brand and grow where we could. As far as the GFC is concerned, we were very cognisant of cost [cutting], but also of the fact that we needed to continue to invest, and for us, new acquisition opportunities arose.
Advice: What you’ve really got to do is focus on the unique selling proposition of your brand. What are you really good at? Keep focused. Keep the structures as lean as you can, but don’t cut your structure so heavily that you can’t get product to market or stop marketing because it’s a downward spiral from there. Part of being a good leader is staying calm in a crisis. The worst thing is to hear the need for panic. One has to stay calm, and have a glass half-full attitude.
Margaret Porritt, founder of Feathers
Experience: The worst for me was the ‘90s. The banks in [Australia] were worried about all these international banks coming in, they thought they would lose ground, so they lent money willy-nilly to anyone. That was in the ‘80s, and there was a boom. Then the ‘90s hit, and people couldn’t pay the interest. There were job losses, there was no construction. I had shops doing over $1 million that went below $200,000.
Approach: I had to sell my house for the business to survive. For me, the house was a dead object, and the business was a living, breathing object. I knew that the house could come and go, but to start a business again would be very difficult. So I sold my house, put the money into the business, and consolidated it. We did all these little pop-ups, kept moving, kept changing, and by ‘95, I hopped on the plane and did my own range. I had to change.
There’s an old saying, ‘For things to change, first you must change.’ That’s what I didn’t do in the 70s, 80s, into the early 90s. I thought everything I was doing was fantastic, and I didn’t change. Every recession after that was not as bad because I knew what to do. I learned from my mistakes.
Advice: It’s hard to give people advice, because you need to have the blood and guts to do it. Fortunately, I had an asset behind me, so I could sell. Everybody told me to close the business down and keep my house. Not me. I had 50 staff. I went down to 20, and a lot of them are still with me today. Their jobs were important.
You’ve got to tighten your belt. Buy well. Don’t over manufacture if you’re a vertical operator. Listen to the market forces. I have a shop next to my office because I need to be near a shop, talk to the team, talk to the customers, get a gauge of who’s walking in and out. It’s about keeping your ear to the ground. But change is the biggest one, always be changing.