Corporate headhunting is rarely described as a spiritual experience. But, as Assia Benmedjdoub discovers, the appointment of Retail Apparel Group CEO Gary Novis is as much about fate as brainpower.
The Yiddish term for 'destiny' is Bashert, explains Stephen Leibowitz from a summer vacation in Sydney's northernmost suburb of Palm Beach.
"It's used as a way of saying something was meant to happen," he continues, neglecting to mention, perhaps appropriately, that it's also used to describe the process of finding one's soul mate or divinely foreordained spouse. In Leibowitz's case, it was less about searching for love and more about finding the right person to assume his role of chief executive at Retail Apparel Group (RAG).
By that stage, he'd built the group up from one menswear label in 1987 to three brands with close to 160 stores across Australia and New Zealand. Sure, he wanted his Palm Beach holiday, but with the knowledge his three sons were being well looked after.
"I had headhunters out there but I didn't feel a connection with any of [the candidates]," Leibowitz recalls of the late 2007 search. "I called someone I knew to check up on a reference and he started talking to me about this man who was just unbelievably good and had the qualities I was after. Midway through the conversation, I realised he was talking to me about a completely different person. Some guy called Gary Novis."
As a result of the bungled conversation, Leibowitz approached the then executive director of Specialty Fashion Group (SFG), another retail empire which operates womenswear chains such as Millers and City Chic, to effectively suss him out. Within 24 hours of their first meeting, Leibowitz offered Novis the role of chief operating officer. A year later, he was appointed CEO.
Bashert? Novis, who'd spent 10 years at SFG by that stage, seems to think so too.
"That was ten years of my life I'd spent at Specialty Fashion and I'd also just turned 40. So I had that proverbial walk in the park with myself and said 'this is where I've been, this is where I'm at now and this is where I'm going'. You hit this sort of thing in midlife - you get to 40 and say, 'Shit, I'm here, what do I do now?'."
"While I was thinking this, I get a call from Stephen and he said, 'Would you like to have a chat?' All the while, I had all these thoughts running through my head."
So what was it about Novis that appealed to Leibowitz? His attention to detail for one.
"I pride myself on my ability to That funny accent was courtesy of a South African upbringing, something he and several other executives at RAG share. But that's where many of their similarities end - Leibowitz admits he's more of an ideas man while Novis is a serial number cruncher. When Novis joined SFG in 1997, and later worked his way up to group general manager, his role was to take the ideas of executives Ian Miller and Gary Perlstein and make them a reality.
"Ian and Gary were entrepreneurs, they were cowboys," he says of the pair, whom he credits for sparking his 'think on your feet' mindset. "They were buying stock, selling stock, growing stores. One of my first roles there was in merchandise planning and that meant working out budgets, how much we should buy and in which category. Then I moved on to the operational side of the business where I managed the retail stores and areas managers before I finally became group general manager and then a director."
He helped extend the group's offering beyond Miller's Fashion Club and acquire or build new brands such as Katie's, Crossroads and Autograph.
"To grow the company, we knew we had to have more than one brand because eventually it gets matured, saturated and then where's your next revenue going to come from? So we looked at acquisitions and generically starting new brands, such as Crossroads, which is a very hard thing to do because you've got a new concept with no brand recognition. It was about looking at opportunities when they came up and thinking quickly on your feet."
This approach was unfamiliar to the business graduate, who admits his university qualifications and prior experience didn't quite prepare him for the speed of Miller and Perlstein. After graduating with a Bachelor of Commerce (with Honours) from a leading university in South Africa, the young Novis was one of six candidates selected for a two-year cadetship program with department store Woolworths. Even back then, he was more sensible that sensational.
"I remember on my first day, I arrived at work with a suit and tie. They pretty much said, "here's a broom, go sweep that cage."
He quickly ascended from sweeping, to stockroom, to sales. Then came six months with the head buyer and another six with the merchandise planner. Eventually, after a year, he was made responsible for his own department - homewares.
"The ability to start from the bottom up prepares you for hard work. You get a good understanding of business and a better idea of how things happen."
After a few years with the company, which he compares to UK's Marks and Spencer in its product offering, Novis came to Australia in 1995 where he spent 18 months working at department store David Jones. He reported to the head of homewares at the time, Collette Garnsey, who's also now ironically made the leap into fashion as David Jones' group general manager for apparel, cosmetics, accessories and footwear.
Then came the first fateful phone call.
"Hello, my name is Ian Miller and I've heard a little about you from a supplier."
By the end of his ten years at SFG, Novis says Miller and Perlstein had taught him to think like a true entrepreneur.
"It was a whole new mindset. These people had put their lives on the line and all of their money into the business. I had more theory floating around in my head, having gone to university and trained at Woolworths, than spontaneity. Now I feel I have a good mix of both."
He says he's carried these skills over to his new role at RAG where, among many other functions, he will be responsible for negotiating the exit of private equity fund manager Champ Ventures. The company, which hopped on board the RAG train in 2004 and is believed to own around 40 per cent of the group, facilitated its expansion beyond the Tarocash brand to acquire competitor YD as well as launch retail concept Connor.
Champ has now been with the firm for four and a half years - a healthy time frame for a private investor by most standards. While it's unlikely RAG will consider listing under the current economic climate, other options include a management buyout or trade sale.
"I've come here to facilitate that process, to ensure Champ have a good exit and we sell the business," Novis says. "We're very opportunistic. We want to be stronger and bigger."
Under his direction, this will mean opening over 40 new stores across all three chains each financial year and even possible brand acquisitions. Despite the threat of reduced sales over 2009, Novis says he doesn't plan to buy less stock or streamline wage rosters.
"RAG has not yet seen a fall in top line sales and for the first four months of the financial year, we have seen positive like-for-like sales in all brands. When I look at [shopping complex] Westfield's takings per square metre and the store rankings per centre, we are consistently ranking first or second in our category for every centre."
It's the middle child YD that Novis wants to really push in his first few years at the group, a telling sign given he wore a selection of items from its spring/summer 2008 range to this interview. Targeted at fashion forward men aged between 18 and 24, the business has its own separate quarters at the RAG head-office to avoid any cross fertilisation of ideas. Tarocash is "fashionable" as opposed to fashion forward while Connor is the more sophisticated brother.
A total of 44 employees are based at the company, with all products designed locally and manufactured offshore. They operate based on a relatively simple "Three P's" mantra: Property, People and Product.
"We position ourselves in premium sites, make sure we find the right people for those sites and ensuring they have the right product to sell," explains Novis. "We're not very big on promoting ourselves [the company does not have a PR division, for instance] other than through our sites in the centres. We're prepared to pay a little bit more rent so that we know our landlords are great at advertising and promoting people to the centres. Once they're in the centres, we've got to grab them."
This is done through periodical refits, premium positioning in shopping complexes and in-store catalogues for the YD and Tarocash brands. Previous editorial promotions and advertising in consumer magazines did little to stir the company's interest, Novis says.
"A guy doesn't shop that often so it's the when he's in a shopping centre that you've got to catch him - they're not browsers. I'd be happy that we even stopped doing the catalogues and put more money in in-store promotions."
Whichever option he decides to pine for, it's clear we'll be hearing more about the three brands in the near future. Novis finds it hard to sit still both in the office and out. A week after our interview, the 40-year-old executive was glowing from his umpteenth Sydney marathon.
"I could hardly walk a few days after [the run] but I'm back on my feet now."
And that's where he'll stay, one presumes, until that phone rings again.