Case Text: Leisurewear Retail Company The Leisurewear Retail Company (LRC) is a

Case Text: Leisurewear Retail Company
The Leisurewear Retail Company (LRC) is a medium-sized UK retailer specialising in sportswear. It has a mixed customer base, appealing both to the ‘athleisure’ market as well as those interested in more-technical sports clothing. In common with most retailers, it sells some products online, but it also maintains a strong presence on the high street, recognising
that many customers like to try on items or are seeking advice before purchasing. The company employs around 1,000 people across the business. Around 100 of these work at the head office in Sheffield; the remainder work across it 75 stores. The head office workforce includes a team of buyers and a team of marketing specialists, alongside the usual mix of professional services (HR, finance, legal). Each store has a store manager and a
team of retail assistants. Although LRC has been successful, the marketplace is highly competitive. Most retailers operate on relatively small margins and seek to compete by keeping costs low. LRC is no exception. Head office staff and store managers have permanent contracts, but rates of pay
tend to be below the industry average and there are few perks. Retail assistants are typically employed on flexible contracts which allow store managers to vary their hours and shift patterns on a weekly basis according to business needs. This enables store managers to reduce staffing levels when sales decrease, helping them to meet targets for payroll costs as
a percentage of sales; however, the contracts tend to be unpopular with staff.
Little attempt has been made to train employees, as the company has historically sought to keep training costs to a minimum. Most employees (even those in the buying and marketing teams) are asked to carry out a fairly narrow range of tasks, and primarily learn on the job from their more-experienced colleagues. Employee communication at LRC is mostly one-way. The CEO holds a monthly briefing at head office, in which senior staff are informed about financial targets, board-level decisions
and the future direction of the business. A few departmental heads and store managers hold short meetings with the staff they manage each month, but these do not take place in all teams or stores and can get overlooked at busy times. There is no other provision for employee consultation, suggestions or participation in decision-making. Levels of employee engagement are quite low and the company has experienced high levels of staff turnover in recent years. Annual rates of 20% at head office and over 30% in-store
are not unusual. Turnover is reported to be problematic when it involves key staff at head office, or the more experienced retail assistants who have built up significant product knowledge. Finding good quality replacements can be costly and time-consuming. However, staff turnover in other positions creates fewer concerns because new recruits are usually readily available. These new recruits may not always be particularly skilled, but the company
has learned to be expedient, recruiting whoever is available, giving rudimentary training and then allowing employees to ‘sink or swim’.
Six months ago, the company was the subject of a takeover. The new owners run a successful sportswear brand, which they have built from scratch over the previous decade. This is their first foray into high-street retailing. They are keen to ensure that all areas of the business are managed effectively, so that the company can continue to be successful in the future. The owners are particularly keen to re-evaluate the company’s approach to HR,
being aware that labour costs and productivity are one area of the business over which they have most control or influence. However, they have limited HR experience. They are in need of informed advice and guidance on their options.
Task outline
Read the case study of The Leisurewear Retail Company (LRC) provided above. LRC is a successful retail company that has recently been taken over by new owners. They are keen to re-evaluate the company’s approach to HR, and need informed advice and guidance on their options. LRC’s owners have asked you to advise them on their approach to human resource management.
Talk about the resource based view.
Could use the Torrington, Derek Human resource Management text book.