PRINT THIS STORY:

CHANGE TEXT SIZE:

A NEW CREATIVE OUTLET

TESCO’S FORMER DEVELOPMENT DIRECTOR HAS STARTED A NEW CAREER AS A LANDLORD

By Mark Faithfull

Tony Vasishta can be forgiven the bareness of his office, given that this is the midpoint of the second day of his new job — indeed, his new career. He has gone from retailer to developer, having carved out an impressive résumé at several major U.K. store groups. On the previous Friday Vasishta was still development director of Tesco, the U.K.’s biggest supermarket chain. But this is Tuesday, and this day finds him behind a desk at outlet developer-operator firm McArthurGlen. The commute (by bike and train) to London’s West End from his 15th-century thatched longhouse in Hertfordshire certainly contrasts with the short hop he used to take to sleepy Cheshunt, the provincial headquarters of Tesco.

Vasishta’s new role as international development director will include expanding McArthurGlen’s factory outlet and full-price luxury retail developments in Europe and spearheading opportunities elsewhere. McArthurGlen already owns and operates eight factory outlet centers in Europe and has several new projects in advanced stages of planning and development, including a 250,000-square-foot designer outlet village in Athens, Greece; and a 200,000-square-foot scheme in Venice, Italy.

The emerging East European countries are an obvious omission in the portfolio, Vasishta says, but the company is looking at Asia.

Vasishta’s last role at Tesco was actually U.K.-dominated. But he intimates that a high-profile role with a rapidly growing retailer may have skewed his work-life balance. A family man, former rugby player and keen outdoor-sports enthusiast, he says the deciding factor was something the elder of his two sons had said. “When your 8-year-old tells you that you don’t seem to be having as much fun in your job as you used to, then it’s time to take stock,” said Vasishta.

“The thing about working at Tesco is that the property teams are unbelievably professional and really understand the planning process, making them very innovative,” he said. “For example, Tesco was applying for mezzanines in the knowledge that U.K. planning restrictions might see them removed from permitted development long before many competitors were even thinking about it. But for me personally, it was difficult to make major changes at a company that was already so well organized, and I guess I have reached a watershed in my life, so it was time for a new challenge.”

Not that any part of his career has followed logically from the computer science degree he completed or the market-stall trader he became. Vasishta left college with entrepreneurial ambitions, and his father sent him off to work for a family friend who let him manage two apparel stalls on London markets. His father also lent him £2,000 for inventory, saying he wanted £2,000 plus interest back at the end of the year.

Vasishta spent four years working those stalls, managing leases on some small shops and learning the basics, he says. This taught him invaluable property lessons, he says, about the costs of labor and logistics and about “what people really prioritize, especially with small store holders, where it is their own money.”

He spent another four years running a construction that, among other things, assembled shop fixtures, four more again in yet another construction company as a contract manager before passing his Chartered Institute professional accreditation exams. In 1995 he joined Kingfisher, the first of a series of major retailers he would work for, as national contracts and purchasing manager. At the time, the Kingfisher conglomerate included B&Q, Comet, MVC, Superdrug and Woolworths. Today it is a major international home-improvement and do-it-yourself retailer.

“Kingfisher had an international vision well before it became more commonplace,” said Vasishta. “The company established a cadre of 25 to 30 managers from across the business who it wanted to groom as the next generation of senior international managers. They sent us to Templeton College in Oxford for retail training, we learned a foreign language — it was a very progressive company.”

When he left Kingfisher in 2001 — by which time he was head of property and process at its Woolworths subsidiary — he went on to work for U.S. retail group TJX, working primarily with its European unit T.K. Maxx. He divided his time between Watford, just north of London, and Boston, but left because he felt unable to commit to a full move to the U.S., even though his two brothers live there.

At the time, U.S. retailers operated their international divisions very much as subsidiaries, answerable to the head office, he says. “Probably what happened to Wal-Mart in Germany is the best example of the problems with that model. If you look at the way U.S. retailers do it now, there is much more understanding of foreign markets. The old model is changing.”

In 2003, he moved on to Boots. It was and is the U.K.’s leading pharmacy chain, but at that time was drifting and in danger of losing its way completely, despite an unrivalled brand reputation. Vasishta joined around the same time as current CEO Richard Baker, a no-nonsense, retail-focused recruit from supermarket chain Asda who was charged with whipping the group back into shape.

“If you look at what Boots was doing then, it had created ideas such as on-site medical and dental procedures and the Wellbeing [health product retailer] format that were very much in tune with the way consumers are today,” he says. “The fact that they did this when there was no market for it perhaps says a lot about where Boots was at that time.”

Vasishta says Boots’ property team was given liberty to improve formats and store layouts with clearer aisles, signage and access. “We had a maxim in terms of the shopping: Get in, get it, and get out,” he said.

Had Tesco not come knocking, he says, he might still be at Boots.

So what does he make of that employer’s designs on the U.S.? The reputation of Tesco, a retail juggernaut in the U.K. and increasingly influential in the dozen or so markets in which it operates, has soared. It surpassed Sainsbury’s as Britain’s biggest retailer and left Wal-Mart-owned Asda trailing. Vasishta, who had no role in Tesco’s U.S. venture, says he believes that the chain will be successful in America, unlike many of its U.K. predecessors there.

“Tesco doesn’t do anything lightly,” he said. “It takes its time, does its research and, although the first two or three years may be very tough, in my view it will succeed. Tesco has seen a gap in the premium convenience market, and to me the location and timing are good.”

It is markets abroad that occupy Vasishta’s mind now. McArthurGlen is ready to grow more rapidly, he says, and that means finding the right markets. Adopting the Tesco approach, he cites the needs of the customers — the retail tenants — as paramount. New channels are to be explored, and Vasishta anticipates more nondiscount developments and growth outside Europe. “Asia excites us, but it has to be beneficial,” he said. “Everything has to be led by what our customers want to do.”