Time was running out for Foyles, the quirky London bookshop, until Christopher Foyle took charge and set about bringing it into the 21st century. Adam Leyland reports on progress
But old-fashioned quirkiness will only buy you so much time and sell you so many books. And as new chains such as Barnes & Noble, Waterstones and Books etc. entered the market, Foyles once the largest bookshop in the world became increasingly unviable as a business.
With financial disaster looming, the literary lunches for which Christina was famous went on in magnificent obliviousness. But behind the scenes, a paralysis set in. Pay was frozen for several years. To offset falling sales, staff levels on the shop floor were cut to unsustainably low levels. Sales fell below 10 million a year less than they had been 20 years before.
Theres a new dynamic in the business, however. On the death of Christina Foyle in April 1999, her nephew Christopher returned to the business (he left, in frustration, in the late 1960s) and set about rebuilding the bookshop from top to bottom.
The HR issues facing Foyle when he arrived were immense. Christina showed an appalling and often brutal disregard for people. Sackings were delivered with regular and chilling insouciance. There was no such thing as a holiday, or sick pay. Staff motivation and morale did not come into Christinas reckoning, let alone career development or training. Investment in staff, as in computers, was non-existent. To make matters worse, Christopher unearthed a 20-year-long fraud amounting to 10 million, according to some press reports leading to the suspension of the general manager and assistant general manager.
It was at this point in May 2000 that HR manager Roger Parks entered the scene. Parks recalls that it was a turbulent time for staff. They didnt understand what was going on [with the fraud]. And there was a greater concern for the future of the bookshop. They didnt know what the family intended to do with the business, so there was a basic fear for their jobs, as well as a general mistrust of management.
Parks, a freelance consultant, had worked with Christopher Foyle for nine years at his aviation business, which he had built since leaving Foyles 30 years earlier. Christopher knew a lot needed to be done, says Parks. Even in the year before I arrived, he had learnt a lot. He genuinely liked the people, and wanted to secure their future, improve their position and develop the business. At the end of the day, were in the people business. We rely on them to give the customers the right books.
But nothing could have prepared Parks for the mess that he met. Its not that the HR practices were terrible. There was no HR system as one would recognise it, no contracts of employment, no management systems, no sick pay, or holidays. Nothing.
It was difficult to grasp, Parks recalls. You expect a handful of managers with reasonable experience of managing. There were department heads and they were good at stocking. But there were no supervisory management systems. And I dont think they ever had managers whod been through normal training.
During the following 12 months, Christopher Foyle was to create several new positions. His first appointment was financial controller John Brown, who was briefed to find out what was going on, and to get the financial side in working order. The next priority was Parks to handle HR. Its a part-time position, with administrative and payroll support.
The final new position was a shop manager, which saw the promotion of Robert Palmer from the shop floor. A new general manager was not brought in until October last year when Sharon Murray was appointed.
With pay levels having been frozen for some time, Parks made it his first priority to order a pay rise. This happened within four weeks of his arrival. He also introduced a wider pay scale. For Parks had discovered that salaries were both low and surprisingly uniform. Department heads were paid the same. Virtually everyone was paid the same around 200 per week. Today, a trainee starts at 11,250. After probation an assistant moves to 12,065. Department heads earn from 12,585 to 16,200. Floor supervisors get 16,200 to 18,965.
Parks has also modified the bonus system. It was the previous bonus system that had given rise to the infamous chit procedure. Customers queued first to receive a chit, lined up in a second queue to pay and then moved back to the first to pick up the book. The chits were used to calculate bonuses. Christina would take them to her home in Essex and old ladies would come in to add up the bonuses.
But as well as being tortuously reminiscent of a scene from Bleak House, the system was also easily manipulated, and it was this that led to the fraud. The old system was eliminated immediately. The bonus is now based on a percentage of sales by department. Theres also a Christmas bonus of one weeks wages.
The second priority Parks identified was to develop a working contract, introducing among other conditions, sick pay, maternity leave, holidays, pay reviews and an ACAS-sponsored disciplinary procedure.
Weve taken a great deal of care [in terms of pay and conditions], says Parks, [developing] good links with Blackwells, and to a lesser extent Waterstones. We try to offer something comparable to rivals.
Foyles is also developing proper recruiting policies. In the old days, Christina undertook all interviews herself, and her deployment of staff was quirky to say the least. Now, as well as keeping records of applicants and employees for the first time, Foyles has drawn up a personal specification of the type of person it is looking to recruit. We want to improve the general package, but we also want to find a team that likes to work together, says Parks.
Foyles also needs to find a team that likes to sell. It was not unknown, in the past, for a staff member to be found hidden in a corner, reading a book. It was also common, when enquiring about a book, to be directed to a box that was left on the shop floor.
Parks believes that the staff are one of the three unique features of Foyles. We do recruit incredibly well-educated intelligent people. Over 90% have degrees; over 50% have second degrees. Education is a huge plus when selling books. We can muster lots of languages between us at Foyles. It makes us a tourist attraction. Nevertheless, he acknowledges that customer service has been sporadic in the past. It used to be very variable from extremely good to extremely bad. It could be a lot better.
New training programmes have been introduced. As well as induction training for new staff, Foyles has cascaded everyone through customer service in the past year.
Another essential measure was to bring the business into line with the competition in terms of opening hours. Since October 2000, Foyles has traded seven days a week. It is also open until 8pm every night (6pm on Sundays.) This has involved the introduction of a new shift system, and an increase in staffing levels.
Says Parks: Weve changed the working hours twice in the past two years. Its gone remarkably well. Building trust was essential in order to win the loyalty of a sceptical staff, and Parks has made sure that managers sit down and talk. Staff meetings have been introduced for the first time. Each department head attends these, which take place every week to 10 days. Its taken a lot of time to win peoples trust, says Parks, showing them we had their interests at heart.
Another new initiative has been the introduction of a newsletter, which comes out every two weeks or so. Previously, explains Parks, there was no system for communicating across all the departments.
These changes have brought about some satisfying results. Staff turnover has reduced from 130% in 1999 to just below 50% in 2001. Its still a little high (the average in retail is around 35%) but Parks thinks this will come down to normal levels in 2002.
An unlikely boon has also come from the decision to launch a website. Theres very good response to the website we get loads of cvs, says Parks. In fact, it has more than paid for itself. Recruitment was constant in the old days, and Foyles was spending 25,000-30,000 a year on press ads. Now we never advertise, and even including the cost of the website, we wont spend anything like that.
The financial figures are also moving in the right direction, according to Parks, who says that 2001 will have seen a 12%-13% increase in sales.
One thing that hasnt changed is the appearance of the store. A tour of the shop quickly confirms that with the exception of an EPOS computer till system, it still looks shoddy. The carpet is a frayed and dirty grey-brown. The signposting is haphazard.
Last month, however, Foyles began a two-year shop-fitting programme that will see a new store front and top-to-bottom refurbishment, including new shelving, flooring, lighting and air conditioning. There will even be a caf, although management has drawn the line at installing sofas.
Parks knows his work is far from done. In particular, he highlights the need for further training on customer service. Were investing huge amounts of money in the building, he says. Now we need to invest in the staff. Now that staff turnover is more stable, we can spend less on induction and more on customer service.
Parks would also like to see more management-training courses. So far there have been two courses on supervisory management, which all department heads had to attend. But it needs to be built on, he says.
And training is also needed, he adds, to get the most out of a new computer system, so that departments learn how to buy books better. However, after early teething problems, he believes the system is only now ready to be fully tested.
But modernisation carries a potential risk. David Robinson, retail HR manager at Blackwells, says Foyles must ensure that it retains its unique qualities during this period of change. They dont want to have the same stock and same customer service as all the others that would be a great loss.
But balance this view with the fact that the business has to start competing if it is to survive. Staff retention is an issue for all bookshops because many of their staff are highly educated but salaries are low and career opportunities can be limited.
Foyles has a difficulty in that it is only one shop, so opportunities for staff to move around within the business are more limited than within larger chains, adds Robinson. However, it could try and set up partnerships with other bookshop chains like Blackwells to swap staff for brief periods and add to their experience.
Foyles size could also be an advantage, says Robinson. It has the potential to become a great place to work. Smaller businesses have more freedom to create a fun work environment for example, managers could close the shop for a day and take the staff out instead to build teamwork.
Another big question is whether the financial model of a single, large central London bookstore will hold up in the online age. Foyles still has plenty of assets in addition to its 100% ownership of the building. It can trade on its name, which still brings people through the door. Not to mention the fact that the fledgling website is already servicing 120 countries.
Although it has lost its crown as the biggest bookstore in the world, the sheer volume and range of books (more than 400,000) and music titles (200,000) is also thought to be unparalleled. And the fact that departments are also free to buy without the strictures of a controlling central buyer means that Foyles is potentially free to respond to customer demand.
But Parks admits that the Foyles refurbishment is being seen as a guinea pig for other big stores. Theres an element of faith that is required, he says. Indeed, noting that Waterstones is closing its Charing Cross Road shop next door due to a hike in rent by its landlords, Palmer is concerned at the disappearance of so many specialist shops in the vicinity. You wonder how many McDonalds the public really needs, he muses.
But whether the modernisation of Foyles works or not, you cant fault the staff for caring. And who could have said that three years ago?