Woolies is onto a winner with former Clicks boss Kneale
Under CEO David Kneale, Clicks went from being a solid performer to a stellar retailer
Getting David Kneale to join its board as a non-executive director was a bit of a steal for Woolworths. His appointment followed two of its non-executive directors resigning without explanation in February, adding to its troubles after it wrote off R7bn a year ago.
Having been a leading figure at healthcare chain Boots in the UK, and heading up Clicks for the past 13 years, Woolworths has brought in someone who comes with some retail pedigree.
Under Kneale, Clicks went from being a solid performer to a stellar retailer. When he joined in 2006, Clicks had a bumper year, with turnover up 14.8% to R10.4bn and profit up 37.3% to R245.9m. When he left at the end of 2018, the retail sector was facing some difficulty, but Clicks still somehow increased turnover 9.1% to R29.2bn and pushed profit up 15.5% to R1.47bn.
While Clicks has soared, Woolworths has lost its way. Besides its problems at its David Jones chain in Australia, it also has had to adjust to an increasingly competitive clothing market in SA.
One area where Woolworths can benefit from Kneale’s expertise is in how to improve its operating margins. Growing margins, which basically comes down to making more money from selling the same thing, was behind Kneale's success at Clicks.
The pressure on Woolworths has been intense, and it can only gain from Kneale’s insights.