When James Rhee, a Harvard-educated lawyer who spent his career in private equity, took the top job at Ashley Stewart in August 2013, few people thought the 22-year old company was worth saving. The retailer was losing millions every year, its business model was obsolete, the company lacked credibility, both internally and externally, its ecommerce platform was “defunct,” its corporate headquarters was riddled with bugs and even lacked Wi-Fi.
Rhee, who had been on Ashley’s board of directors but had zero retail operating experience, was persuaded to take the helm to try to save the company.
“I was probably the least qualified person to run the company,” says Rhee.
How does a person with zero operating experience in retail save a fashion retailer from certain liquidation and, in the process, become the toast of the industry, with glowing accolades, awards, numerous profiles in business magazines and a first-person case study in the Harvard Business Review?
Beyond math and operating best practices, first and foremost, a maniacal focus on catering to the uniqueness of Ashley’s customer and second, kindness.
“I loved the brand and everything it stood for,” Rhee wrote in HBR in mid-2015. “After listening to our customers, I came to realize that the brand stood for…values like respect, empowerment and joy. In tightly knit communities, shopping routines are interwoven amongst generations of women, often around important moments for them like church, family reunions or job interviews. In short, I felt Ashley Stewart stood for kindness and embodied community.”
So Rhee spent time in the stores, soaking up the atmosphere, learning from the associates and understanding the emotional needs of its customers.
“I’d see someone crying because something fit well,” he says. “Women would come in two and three times a week, and would help each other. The associates were their friends. I saw joy, and something very decent, and I concluded that kindness was the embodiment of the brand.”
Rhee knows it sounds hokey, but he was unyielding in his determination to focus the entire company around things that were important to its customers. “Basically, anything that was not important to our customer was disregarded. I’d tell people at corporate, ‘if this thing is important to you to satisfy your own insecurity, that’s great, but you don’t have to work here,’” says Rhee.
The loyalty of its customers had sustained the brand for two decades despite the foibles of previous management, and Rhee was convinced they would stick with the company if Ashley gave them what they deserved.
The transformation started at the top, with complete transparency at all levels of the organization. Rhee got on a first name basis with most of the managers in its 89 stores, and did what he calls an “emergency replatform” of its ecommerce site onto the Demandware Commerce Cloud.
After the replatform, Ashley implemented Demandware order management to better handle order lookup, order status and returns.
At the same time Ashley also dove headfirst into online engagement, connecting with its customers via Facebook – its more than 564,000 followers exceed that of Bloomingdale’s – Instagram, Youtube and Pinterest, not to mention its blog and #LoveYourCurvesTour.
“We used to have a one-way conversation with our customers,” says Rhee. “But we are now one of the most engaged retail brands on Facebook. We don’t measure ‘likes’; it’s more about the engagement and quality of the connection with our customers.”
The result of all this:
- Sales of $150+ million, representing organic growth of 25%+
- Adjusted EBITDA of ~$20 million
- 33% of sales are online; digital sales growing at 80% pace
- Mobile demand growth of 140% – mobile commerce penetration of 40%
- More sales on 2015 Cyber Monday than entire month of November 2013
- Ashley Stewart is now one of the largest, most profitable and fastest-growing plus size brands in the world
As CNBC noted in 2012, “While a turnaround is difficult in any sector, ultimately the retail sector lends itself more readily to more rapid shifts given the industry’s close alliance with consumer demands that are more fickle.”
Ashley Stewart has demonstrated that ‘putting the customer first’ isn’t just a tired platitude. By truly understanding its customers and their needs, Ashley was able to focus on implementing capabilities that empowered it to not only respond to but to stay ahead of and exceed customer expectations.