Department Stores: Buying and Merchandising Team Structure

How do big high street retailers structure buying and merchandising teams?

My experience within Debenhams, which I think from my contacts within other big, established retailers like Arcadia Group, M&S, John Lewis, Primark and Next, I would say they follow a very similar structural formula about how they bring together buying, merchandising and design and try to mirror the structure that a customer is used to seeing in a store or a website. More so in store because the physical shape of the departments is laid out in a way that actually, then, the buying, merchandising and design team plays into.

Let me know if I'm not going on the right lines in terms of the sort of question you're asking. Buying and merchandising work very closely in harmony in all the institutions, I would say. Let's take a department, handbag department or handbag as a product type in a fashion chain, like the brands within Arcadia. Then you have a person leading it from a creative perspective and actually buying the product, so they've got very much, "What does the product look and feel like? What are the right trends? How do we see what a customer wants?" et cetera.

Then you've got someone with a much more financial and numerical head on, i.e. the merchandiser, who then is, "What's the right amount that you're going to need? How does that option, or series of options fit together in terms of space or a line? How much are we prepared to pay because of what marketing targets you have? What's the price architecture? What analysis can I, as a merchandiser, furnish the buyer with when we're creating these ranges that make these as successful as possible?" Those two roles are very closely knitted together. Then there's some slight different nuances depending on what happens in the different retailers as to how house design works with the teams and how close supply-chain or sourcing works.

Debenhams, which we've touched on in a couple of our calls has, over the last few years, tried to set up a sourcing function to actually stand as a strong pillar that works in line with buying and merchandising and design. That was making a lot of progress but is, from the recent activities that I'm assuming Sergio has directed, that seems to be scaled down and they're breaking that back down again. Therefore the emphasis in Debenhams, in terms of sourcing and supply-base, is very much left with buyer/merchandiser, perhaps designer. It becomes more the ownership within there.

Next and M&S have quite substantial sourcing capability and offices and support. I'm not sure their exact current status, but they actually do a lot of the work around making sure that the buying teams that we just described have access to the product that they would want in the right areas of the business.

Those institutions will have a buyer choosing the types of fabric they require to the new products and then they will be in contact with the sourcing offices, maybe in the Far East

Exactly. A buyer/designer will give the shopping list to the sourcing capability or facility within the like of Next and M&S. They say, "Can you get me these?" I'm not saying they would always get them, but they're pretty strong in those areas. If they couldn't, then the buyer and the merchandiser have the relationship directly with suppliers or with factory.