d Dickson Additional reporting: Dimitri Sotiropoulos   Rob Scott Wesfarmers Group Rob Scott has made short work of reshaping Wesfarmers’ retail portfolio since taking over as CEO in November 2017. An ex-Olympian rower, Scott first began to climb through the executive ranks at Wesfarmers after rejoining the company for a second spell in 2004. He was initially appointed in a commercial business development role, followed by leading various divisions including the corporation’s insurance and industrial arms. In 2017, Scott was selected to replace the retiring Richard Goyder as Wesfarmers managing director. The ‘to do file’ on Scott’s executive desk included the need to make a call on the loss-making Bunnings Homebase venture in the UK, an overseas foray that cost Wesfarmers around $1.5 billion. There had been speculation surrounding the potential sell-off of the Kmart Tyre and Auto business over several years, so the ultimate divestment of that business was much less surprising than Wesfarmers’ decision to demerge the Coles food and liquor business in a $20 million plus public float on the Australian Stock Exchange (ASX), announced earlier this year. The restructuring of Wesfarmers’ discount department store division – which put the troubled Target chain under the control of Kmart’s Guy Russo – occurred before Scott became CEO, but the future of the two brands is now up to him. Target’s future in a retail category with too much floorspace looks problematic, even under Kmart’s wing, especially with Russo’s decision to retire. Scott would no doubt entertain offers for the department stores while also potentially returning to an earlier plan to divest the Officeworks brand through an ASX listing. Scott is effectively reshaping the retail marketplace and could potentially lead Wesfarmers out of retailing altogether. Richard Murray JB Hi-Fi Limited Richard Murray’s rank this year reflects his leadership at one of the most successful retail chains in Australia, JB Hi-Fi Limited and its subsidiary, The Good Guys. Murray joined JB Hi-Fi in 2003 as chief financial officer and took over as group CEO in 2014. Previous JB Hi-Fi CEOs Richard Uechtritz and Terry Smart had made the company one of the most recognisable and successful retail chains in Australia, generating growth from store network expansion, new product category development, online retailing and dynamic store formats. As CFO, Murray kept a close check on business costs and as group CEO, he has kept to the proven business strategies developed under Uechtritz and Smart before acquiring major competitor, The Good Guys, in a deal worth $870 million in late 2016. Murray and his management team have since comfortably digested the acquisition, which has lifted annual sales for JB Hi-Fi Limited to close to $7 billion. Some might argue that Murray is lucky to be leading a retail chain that sells technology and entertainment products that are in high demand from consumers, but other retailers in the same category have fallen by the wayside, including Dick Smith and Retravision. JB Hi-Fi is being closely watched by most retailers due to its continuing growth and trading performance, customer engagement, efficiency, use of new and emerging technology and evolution in terms of product ranging. Murray may yet be challenged by Amazon and the Chinese online platforms, Alibaba and JD.com, but JB Hi-Fi appears better placed than most Australian retailers to defend its business. Solomon Lew & Mark McInnes Premier Investments Solomon Lew and Mark McInnes of Premier Investments are ranked joint-third, due to the company’s successful rollout of the Smiggle stationery brand in global markets. Lew has been a canny investor in retail for decades, notably in Country Road, David Jones and various international brands that have established a presence in Australia. McInnes, recruited by Lew to lead an experienced management team across a portfolio of underperforming apparel brands, has worked to rejuvenate Premier’s core business and to capitalise on the consumer appeal of two acquisitions, Smiggle and Peter Alexander. There are few Australian retailers that have enjoyed much success in global markets, although franchises like Harvey Norman, Gloria Jeans, Domino’s Pizza and Cartridge World have had success along with the early promise shown by the Cotton On Group. Smiggle already accounts for around 25 per cent of Premier Retail’s $1.19 billion in annual sales, with Lew and McInnes planning further store rollouts in Europe and Asia. The stationery brand currently has a presence in the UK, Ireland, Singapore, Malaysia and Hong Kong. Lew is politically influential and credible when he speaks out on issues that impact the retail industry, including shopping centre rents, GST on online purchases, penalty rates and economic management. He continues to keep an eye out for new opportunities and has been linked with the prospective divestment of the Sussan, Suzanne Grae and Sportsgirl chains owned by Naomi Milgrom. However, it is Lew’s shareholding in Myer that keeps most industry observers speculating on the department store retailer’s prospects. Conventional theories on his purchase of Myer shares early in 2017 ahead of the retailer’s financial nosedive, are that he wanted to protect the branded merchandise he supplies to Myer and wanted to be at the table in the event of a takeover bid. Lew’s criticism of Myer’s recent trading performance and business strategies have played a part in the demise of one Myer CEO in Richard Umbers and boardroom changes, but has yet to convince institutional shareholders of the need for a revolution. Nonetheless, the Lew and McInnes duo have been among the most influential retailers for some years, continuing to harass politicians, landlords and the struggling Myer while seeking out new frontiers for the quirky Smiggle concept. Brad Banducci Woolworths Group Brad Banducci, Woolworths CEO, is continuing to reshape Australia’s largest retail business, after extricating the company from the Masters Home Improvement disaster. While the Big W discount department store chain remains part of Woolworths (at least in the short-term), Banducci has effectively taken the company back to its roots in food and liquor. Meanwhile, regulatory hurdles have hampered Woolworths’ plans to exit its fuel and convenience store business in a deal Banducci had struck with BP. BP walked from that deal and Woolworths has since struck a fuel supply deal with Caltex while it continues to assess exit options, including a trade sale or a float on the ASX. Banducci is also understood to be mulling over a demerger of the ALH hotels and gaming business in which Woolworths has a 75 per cent stake. It is understood the preferred option for the business is a float on the ASX with timing apparently dependent on the divestment of the fuel and convenience business. But the major issue on Banducci’s plate is the underperforming Big W discount department store chain. Although Big W did show modest improvement in FY18, it is an awkward fit and a low growth platform for Woolworths, now that its focus is firmly on the supermarkets and liquor businesses. Banducci is keen to defend Woolworths’ market share in food and liquor against formidable competition from Coles, Aldi, Costco, independents and the new challenger, Kaufland. Heading the largest retail chain in Australia by sales, Banducci continues to be one of the most influential business leaders in Australia. “The major issue on Banducci’s plate is the underperforming Big W. “ Michael Schneider Bunnings Warehouse Michael Schneider was also in the top 10 in 2017, despite then having only been in his first year as CEO of the Bunnings Warehouse powerhouse. Although the Bunnings Warehouse format came a cropper in the UK, the Australian and New Zealand business has been a remarkable long-term success story and has arguably been the best performing retailer over the last two decades. Schneider served for over a decade in store operations at Bunnings, before seamlessly taking over from John Gillam in May last year. Wesfarmers-owned Bunnings has continued to expand and has successfully driven like-for-like sales growth. But now Schneider and his management team face the challenge of maintaining growth momentum in a mature business, in what some analysts believe for the short-term is a softening hardware and home improvement market. Schneider is keen to develop a stronger online presence for Bunnings, which is likely to require some innovation in product handling, as well as click-and-collect options for customers. However, the big question mark around Bunnings is whether or not Rob Scott believes the chain fits with his vision of Wesfarmers’ future or would be better divested while it is in great shape and attractive for a trade sale or public float. “Schneider is keen to develop a stronger online presence for Bunnings.” Sam Gance Chemist Warehouse With sales exceeding $4.5 billion, Chemist Warehouse is the seventh-largest retail company in Australia and, excluding the German-owned Aldi supermarkets, the pharmacy chain is the largest retailer in private ownership. Founded in 2000 by Mario Verrochi and Jack Gance, the Chemist Warehouse Group has expanded rapidly on a business platform established in 2002 after the acquisition of an entity called East Yarra Friendly Society. Sam Gance now heads the pharmacy group of around 400 stores under Chemist Warehouse, My Chemist, My Beauty Spot and ePharmacy, a group which commands around 23  per cent of the total retail pharmacy market. Gance has expanded aggressively with a distinctive large store format and low price proposition and is now trading in China through a targeted online channel. The Chemist Warehouse Group has considered but not proceeded with a float of the pharmacy powerhouse on the ASX but has certainly stirred investor, supplier and retailer interest with a planned July 2019 move from long-term wholesaler Sigma to EBOS. Gance’s position in the top 10 recognises the significant market position of the Chemist Warehouse Group and its measured entry into China. Gance is an important industry figure, particularly as politicians consider changes in the highly regulated pharmacy sector. A canny marketer and retailer, he has achieved exceptional sales growth and healthy profitability through innovation and a strong business model. “Gance has expanded aggressively with a distinctive large store format and low price proposition.” Jeff Bezos Amazon Last year’s influential list was topped by two international ecommerce giants. Jeff Bezos came in first place, as Amazon revealed plans to develop its Australian business, while Alibaba founder Jack Ma ranked second. Both companies have a physical presence in Australia and are leading a pack of online retail platforms that are forcing bricks-and-mortar retailers to rethink their business models. Both Amazon and Alibaba are effectively building their Australian operations and have yet to wreak the havoc that some industry observers predicted, but they are forcing changes. Australia’s homegrown online retailer, Kogan.com, is also continuing to develop a market presence and sales growth, following an ASX listing, while the Chinese retailer JD.com has now also entered the Australian market. Some reports suggest eBay is currently a more significant online platform for retailers than Amazon, but neither Amazon nor Alibaba can be underestimated, especially as they continue to develop new technologies and expand payment platforms. Bezos has defied many business conventions since he founded Amazon in 1994 at the age of 30, after writing a business plan while driving from New York to Seattle. Amazon is now valued by investors at $US1 trillion, while Bezos is the world’s richest man with a net worth of $US112 billion, courtesy of his stake in the online retail goliath. Amazon, Alibaba, JD.com, Kogan.com and eBay are virtual department stores with products across a wide number of merchandise categories at prices that are cutting as much as 30 per cent from in-store price points offered by bricks-and-mortar retailers. “Bezos has defied many business conventions since he founded Amazon.” Jack Ma Alibaba Jack Ma founded his first online retail site, Alibaba Online, in 1999 and turned a profit within two years. He created Taobao as a consumer ecommerce site in 2003 and subsequently launched the Alipay payment service used on Taobao as a separate venture. The Alibaba Group is listed on the New York Stock Exchange and is building sales through the consumer-to-consumer portal Taobao and business-to-consumer portal Tmall. Ma’s business offers almost one billion products and the group’s websites command a dominant share of China’s online sales. Ma has established an Australian base to support around 2,000 Australian and New Zealand businesses on Tmall and Tmall Global, while also creating more opportunities for vendors from China and other countries. Earlier this year, Sydney hosted its first Alibaba ecommerce expo, attracting over 175 exhibiting Australian and New Zealand brands and retailers, who took part in the two-day event focused on helping local businesses tap into the ecommerce-enabled Chinese economy. In September, Ma said he will step down as executive chairman of the company he founded at the end of a 12-month succession plan, handing over to CEO Daniel Zhang. While 54-year old Ma handed over the day-to-day operations of the ever-growing business to Zhang five years ago, he says he will still be a director of the company until the 2020 annual meeting and remain a permanent member of the Alibaba Partnership, which guides the business, well beyond that. Ma now spends about 40 per cent of his time travelling internationally presenting to audiences about globalisation and interconnectedness, using technology to improve people’s lives, and philanthropy. So don’t expect his influence on Australian retail to wane any time soon. Thomas Coellner H&M Thomas Coellner is a debutant in the influential list, having only arrived in Australia at the start of September to lead the local expansion of H&M. Coellner has taken over from Hans Andersson, who has headed back to Sweden after overseeing the opening of 31 stores across Australia. He holds 30 years of experience with the Swedish retail chain that is now a global retailer. He was most recently CEO of the company’s Turkish stores. H&M launched in Australia four years ago and has been profitable from its second year Down Under while building annual sales to more than $350 million. In its latest quarterly result, global sales at H&M saw an 11 per cent increase, aided by a 32 per cent jump in online sales for the nine months to August 31. Coellner believes the chain has significant growth potential in Australia, which will no doubt hearten shopping centre landlords, but cause further dismay to Myer, David Jones and other apparel retailers who have lost sales to H&M. The experienced retail executive has not wasted any time upon his entry into Australia, announcing the global fast fashion chain’s first entry into South Australia, with a store to open at Rundle Mall Plaza in November. While Zara and Uniqlo are also significant global retailer entrants to Australia, H&M potentially looms as the greatest threat to Australian apparel chains and particularly the department stores. Tom Daunt Aldi Aldi CEO Tom Daunt rounds out the top 10, in recognition of the significant changes the German discount supermarket chain has triggered in the industry. Daunt was appointed CEO for Aldi Australasia in 2015, an indicator that once the retailer had launched into the South Australian and West Australian markets, expansion into New Zealand was on its radar. Aldi is estimated to have more than 12 per cent of the Australian grocery market, with annual sales in excess of $10 billion. The German grocery giant’s impact on Australian retail is well-documented. According to Roy Morgan Research, the privately-owned retailer is one of the country’s most trusted brands, sitting alongside homegrown favourite Bunnings at the top of the standings. With the likes of Dick Smith recently announcing that he is closing his foods business due to increased competition from the ‘secretive’ Aldi, the German giant’s impact on Australian retailing cannot be understated. Daunt’s response?  “[Aldi’s] international heritage and global presence is no secret, nor are our intentions in Australia. We want to supply great, quality products at affordable prices.” It’s clear that the grocer’s rivals can expect more relentless growth and pressure, which shows no signs of slowing down anytime soon.   Top 50 List: Rob Scott, Wesfarmers Group Richard Murray, JB Hi-Fi Limited Solomon Lew & Mark McInnes, Premier Retail Brad Banducci, Woolworths Group Michael Schneider, Bunnings Warehouse Sam Gance, Chemist Warehouse Jeff Bezos, Amazon Jack Ma, Alibaba Group Thomas Coellner, H&M Australia Tom Daunt, Aldi Australasia Gerry Harvey & Katie Page, Harvey Norman Claire Peters, Woolworths Supermarkets Ian Bailey, Kmart and Target Steven Cain, Coles food & liquor Ian Moir, Woolworths South Africa Michael Ford, Steinhoff Asia Pacific Ruslan Kogan, Kogan.com Peter Johnson & Nigel Austin, Cotton On Group Scott Evans, Noni B Jeff Adams, Metcash Peter Birtles, Super Retail Group Naomi Milgrom, Sussan Group John King, Myer Patrick Noone, Costco Erica Berchtold, previously at Super Retail Group (Rebel Sport) Jo Horgan, Mecca Cosmetica Peter Allen, Scentre Group Zac Fried & Morry Fraid, Spotlight Group Janine Allis, Boost Juice & Retail Zoo Don Meij, Domino’s Pizza Elle Roseby, Country Road Nati Harpaz, Gabby Leibovich & Hezi Leibovich, Catch Tony King, Apple Australia and New Zealand Anthony White & Terry White, Terry White Christmas Tim MacKinnon, eBay Australia & New Zealand Andrew Gregory, McDonald’s Australia Kenji Tsuji, Uniqlo Holly Kramer, Woolworths Kevin Song, Zara (Inditex Australia) Debra Singh, Steinhoff Asia Pacific Steve Donohue, Endeavour Drinks Mark Ward, Officeworks Jan Gardberg, Ikea Australia Jay Munro, Munro Footwear Group Doug Murray, Foschini Group Judy Coomber, Peter Alexander Brett Blundy, BB Retail Capital Roger Drake, Drakes Supermarkets John Charlton, Spendless Shoes Angus McKay, 7-Eleven   Access exclusive analysis, locked news and reports with Inside Retail Weekly. 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