BusinessCompany NewsProfile: Simon Burke – Toystory

Profile: Simon Burke - Toystory

For a man with no children and no interest in popular music, Simon Burke, ex-Virgin CEO and current pied-piper at toy emporium Hamleys, certainly knows how to play the business game.

Natural people skills among the CEO community are not as commonplace as they perhaps should be. Old school CEOs don’t traditionally prioritise them.

But the business world, particularly in a downturn, is getting less flamboyant and more realistic. Executives are making an effort to hone their ‘soft skills’, aware that society demands, at least on the surface, more responsible managers and directors.

Out of this evolving business world, emerges a rather more down to earth accountant turned chief executive who takes the tube to work, the bus home and who only owns one house.

Added to this he prefers to move, outside of work, in non-corporate circles, spends his free time immersed in Byzantine history and does not believe in working prolonged hours. Yet he is one of today’s most feted CEOs.

Simon Burke, chartered accountant and chief executive of Britain’s most famous toy store, seems graced with a natural flair for people and business as he greets me amid a reception of teddy bear chairs, board games and various other toy paraphernalia.

A man unburdened
There is no hint of a man burdened with the weight of managing a publicly listed company as he winds his way to his orderly but minimalistic office on the top floor of Hamleys’ Regent Street store dodging office staff’s antics and joking about meeting Star Wars’ imperial stormtroopers along the way.

He has, however, enjoyed a generous dose of favourable publicity since Hamleys’ was given a major overhaul around three years ago under his supervision.

The continued success of Hamleys lay in the balance last October when Burke had to face the City to deliver dipping trading results following the effects of the foot-and-mouth epidemic and the September 11 terrorist strikes.

‘We had a couple of scary months. Business dropped literally from noon on September 11 when people went home to watch the television, and continued dropping for five to six weeks in London,’ Burke explains.

‘At the end of October we had the half-term week, which is very important in our business because it is the first of the really manic Christmas trading weeks. And it’s a good bellwether for how Christmas trading will turn out. And we had the worst half-term trading week that we could remember.’

As expected the City issued damning statements on Hamleys’ outlook. But fortunately for the toy store, and Burke’s reputation, it defied all predictions and after two highly charged months things took a turn for the better.

‘Ironically it was almost at that point that things seemed to turn. And at the end of that week trading picked up,’ he says.

Optimism for the year ahead
With summer just around the corner Burke continues to be optimistic for this year’s trading. ‘I sense that there are more tourists around now.

I hear a variety of languages going home on the bus in the evening and on the tube in the morning, so hopefully we’ll have a reasonable summer.’

He is not, however, ignorant to the changing tides of favour. He is Hamleys’ fourth chief executive in three years. Although currently well-respected in the City, he is ‘acutely aware’ that things can take a change for the worst in this ‘short-termist’ world.

‘I have basked in the publicity that has been reasonably favourable over the last couple of years. There are plenty of managers in businesses who have been pilloried for performance which is probably not their fault,’ he explains.

‘I’m not constantly in a state of paranoia, but you are always conscious of the unrelenting need to keep up the performance. There isn’t that longer-term view. People don’t see a failure in the context of wider success. Running a public company you’re aware that you’re only as good as your last, or more to the point, your next, set of results.’

His awareness of potentially temporary popularity does not however temper his frank views on regulation.

Of the proposals for listed companies to report on a quarterly basis, as in the US, he says: ‘There is an insatiable appetite for data about companies and their performance. I give five trading updates a year in terms of our sales performance.

‘I’m not convinced that if companies reported monthly on their results that investors would be in any real way that better informed,’ he says.

‘I don’t think quarterly reporting is the answer. For a company like ours it would be farcical and very expensive.’

Views on auditing
His views on the current raging debate about auditor independence are equally forthright. ‘If you want an audit process that is truly independent of the company then the fees have got to be paid by the state,’ he says.

For a man who has ‘never really made any career decisions’, Burke boasts an extremely successful and varied career that began in the humble background of a small accountancy practice in Dublin. He later went to Coopers & Lybrand before moving on to Virgin.

After a short stint in the corporate finance department at Virgin Entertainment, he swiftly, yet ‘foolishly and naively’, became CEO of Virgin.

‘I was naive because I thought the problems were purely financial and with better financial skills I could put it right. But I learnt differently very quickly,’ recalls Burke.

But he stuck at it and hauled the company back into the black. In fact he did it a number of times as the company acquired other failing businesses.

Moving on from Virgin
After 12 years at Virgin and with very fond memories of his time there he was considering a move. With his reputation preceding him he received a phone call from Hamleys.

‘I had always hankered after running a public company. The opportunity seemed tailor-made for me. It was a high-profile name, it was in trouble, it wasn’t too big, so it wasn’t going to be hugely bureaucratic and it was a business that you could see beyond the turnaround had the potential to do better. The timing was right,’ he says.

Hamleys, as Burke explains, was in a ‘very sad’ state. ‘In morale terms it was on its knees. There had been severe boardroom strife over a period of two years prior to my arrival. There was a dreadful atmosphere and it was worse the more senior you got,’ remembers Burke.

But, it was a challenge he relished. ‘It was a tonic experience,’ he says.

Indeed with Hamleys’ now in a stable trading position, Burke considers the business success the best part of his job. ‘The best thing about this job is the sense of fulfilment you get when someone says “Hamleys was a bit of miserable place and then Simon came in and it’s all changed now.

It’s so much better and it’s going places”. Morale is up and people now have a bit of a laugh here. That’s a great sense of fulfilment and satisfaction in turnaround work.’

And the worst thing? ‘The sense of responsibility that you carry. If it all goes wrong it’s going to be down to me,’ he says.

A big adult base
Ironically for a man who has worked in the record and toy business, he has no children and nor did he ever have any interest in rock music or rock stars prior to working at Virgin. Nevertheless he is quick to point out that 50% of Hamleys’ customer base is adults with no children.

He also, rather embarrassingly, recounts that at the height of the Beatles frenzy in the 1960s, he went out and bought his first album – a classical one.

His professional life, however important to Burke, has never changed his lifestyle philosophy. He would make a great example for the government’s work/life balance project. His outside interests are varied – besides the avid fascination with Byzantine history, he is a keen pilot. Most of his friends work in areas that have little to do with the business world, which he clearly values.

‘I think getting away from work is very important. People who lead a one-dimensional life have their effectiveness diminished by that to some extent. Per hour they are certainly a lot less effective than people who get refreshment through change or rest,’ he enthuses.

So where from here? Well that remains to be seen. Burke continues for the moment to ride a wave of success. But if all else fails, there is always astronomy.

‘It has always interested me,’ he explains. ‘If you said you can do something else, but not business, then that would probably be the thing I’d do.

‘It’s the area of science we’re still on the frontier of, with amazing discoveries still being made. I’d like to think that man has a future in space, and away from planet Earth.’

The universe remains his oyster …

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