26 May 2012

Joseph Wan Group chief executive, Harvey Nichols

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FASHION FORWARD

Joseph Wan leads one of Britain’s most respected names in luxury retailing.

He tells Jo Bowman how Harvey Nichols is reaching out to the world’s

wealthy and fashion-savvy, but staying out of mainland China – for now

Photography by Marcus Oleniuk

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28 May 2012

ith its opulent flagship store in London’s Knights-bridge, Harvey Nichols is on par with Har-rods as a byword for luxury European shop-ping. Indeed, Harrods is only a short walk away, along with Jimmy Choo, Manolo Blahnik, Armani, Tod’s, Gianfranco Ferré, Prada and a long list of other top names.

Shopping for luxury in this part of the world is a serious business.

Joseph Wan, impeccably dressed in an Ermenegildo Zegna suit and wearing one of his collection of Tom Ford ties, insists he’s no fashionista. But Harvey Nichols’ group chief executive does know what makes the appeal of an upmarket retailer endure, while hem-lines, colours and collar styles come and go.

When the Hong Kong-born Wan joined Harvey Nichols 20 years ago, it was a single, loss-making store with a rich, century-old heritage but a day-to-day business that had become lost in the diverse operations of its previous owner, the Burton Group (now the Arcadia Group run by the retail magnate Sir Philip Green).

Snapped up by a Hong Kong conglomer-ate, Dickson Concepts, and with Wan at the

helm, the brand has grown into a profitable and thriving international network with sev-en stores in the United Kingdom and Ireland, and another six around the world.

In Hong Kong, a new store opened in Pacific Place in late 2011, in addition to an existing store in the Landmark. The interna-tional footprint will change shape again this September when a new store is due to open in The Avenues, the largest shopping centre in Kuwait.

The resurrection and strategic expan-sion of Harvey Nichols, Wan says, has come through the application of many of the skills – and attention to detail – that he honed as a CPA. “The key to the turnaround and con-

tinuing development of Harvey Nichols was one word: focus,” he says.

Wan immediately moved the company’s office out of the Knightsbridge store, liberat-ing 1,850 square metres (20,000 square feet) of retailing space at a stroke. “Previously, the company was part of a big high-street retail group and was too small within the group to merit enough attention; it was noncore so it was ignored. There was no strategy whatso-ever.” Products, merchandising, the store en-vironment, business processes and incentive schemes for staff all were given an overhaul.

Even today, Wan remains close to the day-to-day goings-on on the shop floor. On the day that A Plus catches up with him, he’s

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A PLUS

about to travel to the northwest of England to check in with staff at the Harvey Nichols store in Manchester.

In 1996, five years after Dickson Con-cepts took over Harvey Nichols, with the company back in the black and with credible plans for expansion, Wan took the company public, with an initial public offering on the London Stock Exchange that was more than 16 times oversubscribed. There was some-thing of a trend for high-end names to list at that time: Donna Karan floated on the New York Stock Exchange the same year.

While profits were robust for Harvey Nichols in the years to follow, other clothing retailers fared less well as the Asian finan-

cial crisis began to bite and as strong British retailing names like Marks & Spencer re-ported weak results. By the late 1990s, Wan says, analysts were downgrading small-cap companies and fashion retailers because of general market sentiment rather than com-pany-specific factors.

Harvey Nichols was twice downgraded within a 24-month period, and was trading below its IPO price. “We felt very disillu-sioned,” he recalls. “What’s the point of all this effort with compliance to maintain the listing?” The decision to take the company private was made in 2003.

Wan now oversees the company from the top floor of a new, purpose-built office block

in Chiswick, west London, at the same desk he inherited from his predecessor two de-cades ago. Many of the pictures on the walls, of the Knightsbridge store in days gone by, also came with the job. A photo of his two daughters is one of the few personal touches. His CPA and chartered arbitrator certificates are also displayed. “It’s certainly not luxuri-ous but I don’t need that,” he says.

Some like it hauteThe view from his office over this low-rise and largely residential pocket of London is a long way from the book shop in Ice House Street, Central, where a teenage Joseph Wan mulled over his future career path. “Even at the age of 14, I was thinking about going into the legal profession or accountancy,” he re-calls. “I remember picking up a lot of books about career guidance, and reading about CPAs in America – all about it being a very re-spected profession with high integrity.”

Ever practical, Wan opted to do his article training in Britain, given the colonial ties with Hong Kong and the relative ease of trav-el and transferring qualifications compared to the U.S. After qualifying, he returned to Hong Kong to join Peat Marwick.

“I was very lucky,” he recalls. “I was given a lot of exposure to different things.”

“Initially, I did the standard work on au-diting of hotels, motor distributors, finance, deposit-taking companies, all these kind of things, tax compliance work, tax claiming and a little bit of debt restructuring,” he says. “I was really covering a wide range of busi-ness activities.”

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Wan quickly progressed through the ranks, and was appointed to work on three high-profile government investigations into white-collar crime, which resulted in prison sentences for those under scrutiny. Partner-ship at Peat Marwick beckoned.

However, Wan’s progression at the firm was thrown off track in 1987 with a job offer from Dickson Poon, whose company was at the time a Peat Marwick client. “It was a very big step indeed, and a very, very difficult de-cision... but Mr. Poon made me an offer that I could not refuse,” he says.

Poon, at that time, was on the brink of ac-quiring the European designer goods com-pany S.T. Dupont. “I was very interested in doing mergers and acquisitions work, and enjoyed doing things like fundraising for rights issues for a listed company and doing due diligence, all this kind of work was very attractive to me to enhance my skills and ex-perience,” Wan says.

“The other attraction for me was that in this profession, you’re always looking back at things after they’ve happened, going in to find out what’s happened and then reporting on it. But when you’re in business as group finance director, you’re participating in the strategy formulation and implementation. You’re living with the situation day to day and seeing the results that you’re talking

about and directing.” With that philosophy in mind, Wan made

the move to Dickson Concepts, and after five years as the group’s financial director, was as-signed to the newly acquired Harvey Nichols.

Bucking the trendWith its strong Hong Kong connections, one might expect Harvey Nichols to be lead-ing the charge of European luxury goods purveyors into the mainland. Yet not even Shanghai and Beijing figure in the brand’s expansion plans, despite growing consumer wealth and the voracious appetite for de-signer labels.

Wan explains that the time is not yet right. “We’ve established a strong reputation in the United Kingdom, particularly in our London flagship store, with our regular cus-tomers who are high-end individuals who love fashion and are serious about fashion,” he says.

“They know very well that when they come in, what they see every season is the best of the best of many brands all housed under one roof. What we’re selling is the ‘ed-iting.’ ” Wan points out that if people wanted to buy just one brand they could go to that brand’s own store, or go online, and shop from the entire collection.

In the mainland, demand for this kind

of crossbrand curating is still nascent, Wan says. “The fashion sophistication level among so-called luxury consumers in Chi-na is, relatively speaking, not as high as the Western aristocracy or the very wealthy lux-ury consumers. A lot of the people are really only after the brand, the logo, rather than appreciating the craftsmanship, the style, the quality of the luxury goods.

“There are many people who are very wealthy by any standard, but immediately underneath that social group I can’t find any really affluent middle class,” he adds. “China’s clearly somewhere we will enter, but it’s a question of timing.” For now, the Hong Kong stores provide mainland visitors with exposure to the brand and what it of-fers, building awareness before an eventual launch.

Wan says that even after all these years in the C-suite, he’s still, deep down, a CPA. “People laugh at me because I still act with the same professionalism that I did when I was a practising accountant,” he says. “When I review things I’ll still issue a query sheet like I did as a practising accountant and auditor. But that’s stood me in very good stead in confronting different situations. And maybe it’s because I’m so passionate about the job and love it so much, but I don’t feel any stress.”

“We’ve established a strong reputation in the United Kingdom, particularly in our London flagship store, with our regular customers who are high-end individuals who love fashion... They know very well that when they come in, what they see every season is the best of the best of many brands all housed under one roof.”