Arcadia Group: Management and Operational Challenges

The assessment is based on a business and management case study which requires a critical approach to identifying and problem-solving a range of business and management challenges within the case. Throughout the term you will undertake research and analysis which will inform your individual report. Within the individual report you will include a summary and key justifications for the resolution of one of the problems in the case supported by management theories and principles. 

The Arcadia Group is a leading fashion retailer in the UK which operates 2,500 high street stores and outlets (concessions) in the UK, Ireland and the US. It also operates an online sales business. They own the famous brands of Burton, Top Man, Dorothy Perkins, Evans, Outfit, Outfit kids, Miss Selfridge, Wallis and Topshop. The company has a long history, having developed the business through the acquisition and sale of fashion brands and companies including BHS which was sold in 2015. The company is currently owned by the Green family and it led by Sir Philip Green.

The retail fashion market is highly competitive and with the dramatic growth in online fashion sales, retail store operators such as Arcadia have been experiencing difficult challenges in terms of making profits, as well as paying high street rents to their landlords. In March 2019, after continued losses, it was reported that Sir Philip Green was exploring a company voluntary arrangement (CVA) to restructure the company. In May 2019, Arcadia Group confirmed it planned to close multiple stores across the UK, US and Ireland with the possibility of further closures worldwide to cut costs[ BBC (2019) https://www.bbc.co.uk/news/business-47589885 (Accessed 7.1.20)]. The plan is feared to lead to more shop closures and job losses.  

This case study therefore focusses on the management and operational challenges of running high street retail stores in difficult trading conditions.  

The group is experiencing a set of management and operational challenges as follows:

Problem 1 – Staffing & HR - Recruitment selection retention and training for high street stores

Problem 2 – The work culture in the high street stores 

Problem 3 – Being a sustainable business in fast fashion (sustainability)

Problem 4 – Poor customer service quality in the stores in the South East Region

1.High street fashion retailers experience many challenges in terms recruiting and retaining good quality store staff especially in these difficult trading conditions. With many of the stores being under threat of closure, attracting talented retail store staff to work for the group is difficult. Equally the stores that remain open and are trading reasonably well need to be run efficiently by well-motivated, well trained, experienced staff.

Problem 2: The Work Culture at Arcadia Group

Propose and justify measures that would help resolve the following issues:

1.The recruitment practices for the group are failing to attract and retain staff with many retail staff leaving before 6 months into the job. Outline and justify three different human resources and recruitment practices from a Human Resources Manager perspective, that could be suitable to a) attract new talent; b) offer suitable incentives and rewards; and c) retain staff for at least beyond one year of employment. Discuss the advantages and disadvantages of the three proposed practices in the context of the Arcadia Group. 

2.In 2018 the Arcadia Group produced a Gender Pay Gap Report[ Arcadia (2019) Gender Pay Gap Report https://s3-eu-west-1.amazonaws.com/craft-web-s3-2617/Gender-Pay-Gap-Report-2018.pdf (Accessed 7.1.20)] which highlighted that the mean gender pay gap for the total organisation is just under 29%. Since 82% of the employees in the group are women, consider ways that the group can close the pay gap. Consider and justify ways of closing the gender pay gap.

The Arcadia Group has been experiencing difficult trading conditions and sales are falling. This has put the group under pressure to reduce costs with some stores having to be closed. It has been reported that the head of the group Sir Philip Green [ BBC (2019) https://www.bbc.com/news/uk-47179344 (Accessed 7.1.20)] adopts an aggressive approach to management and has been reputedly accused of harassment by some members of staff. Retail is traditionally a sales-orientated operation, relying on good supply chains and efficient operations systems.

Propose and justify measures that would help resolve the following issues:

1.From a store managers perspective, consider three ways of enhancing the company culture to meet the requirements of the  company’s ‘How we work’[ The Arcadia Group (2019) How we work https://www.arcadiagroup.co.uk/about-arcadia/how-we-work (Accessed 7.1.20)] initiative, namely: Commercial Flair; Future Focus; Developing the Best; Driving Results; & Resilience. Discuss the advantages and disadvantages of your proposals in the context of the Arcadia Group. Using Quinn’s Competing Values Framework (Boddy 2017:43)[ Boddy, D. (2017) Management: An Introduction (5th Ed). Harlow: Pearson Education.] evaluate which ‘model’ that the company adopts and justify which model could be more appropriate to for the future success of the company 

2.Review and assess the mixed staff views expressed in the quotes[ Indeed (2019) https://www.indeed.co.uk/cmp/Arcadia-Group/reviews?fjobtitle=Team+Leader&fcountry=ALL (Accessed 7.1.20)] in the Indeed website (employment website). What management practices and approaches could be put into place to resolve some of issues raised by the negative comments from staff?

Problem 3: Being a Sustainable Business in Fast Fashion (Sustainability)

The Arcadia Group have identified four goals from the where our business operations have the most direct impact on bringing about collaborative change in line with the United Nations Sustainable Development Goals (SDGs). These are in the following areas: Good health and wellbeing (through the Charity and Partnership Programme)[ The Arcadia Group (2019) https://www.arcadiagroup.co.uk/fashion-footprint/people/charity-partnerships/charity-partnership-programme (Accessed 7.1.20)]; Decent work and economic growth (ethical trade)[ The Arcadia Group (2019)  https://www.arcadiagroup.co.uk/fashion-footprint/product/ethical-trade (Accessed 7.1.20)]; Responsible consumption and production[ The Arcadia Group (2019)  https://www.arcadiagroup.co.uk/fashion-footprint/product (Accessed 7.1.20 )]; and Climate Change (with the aim to improve the environmental impacts associated with the fashion industry, through initiatives such as: The Sustainable Clothing Action Plan; Industry Acting on Microfibres; WWF Leather Buyers Platform; Alliance for Responsible Denim; and Canopy).  Source https://www.arcadiagroup.co.uk/fashion-footprint/about/sustainable-development-goals[ The Arcadia Group (2019) https://www.arcadiagroup.co.uk/fashion-footprint/about/sustainable-development-goals (Accessed 7.1.20)

Fashion retailers have been accused of ‘Greenwash’[ The Guardian (2019) https://www.theguardian.com/commentisfree/2019/jun/18/fast-fashion-environmental-audit-committee-polluting-industry (Accessed 7.1.20 )],  defined as the use of marketing to portray an organisation's products, activities or policies as environmentally friendly when they are not.

Propose and justify measures that would help resolve the following issues:

1.Review and assess Arcadia’s current sustainable development goals and consider ways in which these goals could be met in the retail stores by store managers supporting your review with examples of sustainability initiatives from other retail operators.

2.Child Labour[ The Guardian (2019) https://labs.theguardian.com/unicef-child-labour/ (Accessed 7.1.20)

what can the Arcadia Group do to ensure that children are not employed in the production of their clothes sold? What could be done in the stores to reinforce the message of sustainability and ethics? 

The retail stores for the group operate on a regional basis. The South East Region, which includes London, is overseen by a Regional Manager. Each store is assessed for quality service and operation in a number of ways. The stores get a monthly benchmark score based on feedback from customers who complete a customer service survey, as well as with assessment from a Mystery Shopper research company ShopQuest. The key complaints are in the following areas: Poor customers service with staff being sometimes rude or abrupt; Messy stores with poor presentation of clothes and product; Errors made in billing; & clothing being unavailable in a suitable range of sizes, especially those on special promotions. The stores in this region consistently score 10% lower than the other stores in the group achieving an average quality score of 66%. The Regional Manager needs help to raise the standards of service in the stores in the region.

Propose and justify measures that would help resolve the following issues:

1.Poor customer service

Discuss the options available to the Regional Manager to improve the performance of the individual stores and their staff members. Review and assess different methods of benchmarking, measuring and testing the service quality being offered in the stores.

2.Weak store operations procedures 

Discuss contingency plans that could be put into place to deal with the operations problems in the region, especially around store management and stock availability and logistics.