Magic touch

While high street fashion struggles to recover from Covid, AllSaints has been making record profits. How did it buck the sector’s downward trend? CEO Peter Wood CA credits excellent training, great teamwork and a weekend of Harry Potter

Words: Cherry Casey

Ted Baker, Topshop and J.Crew are just a few of the fashion businesses that were unable to mitigate the crushing impact of Covid-19, leaving UK’s shores, moving to online-only trading or going into administration completely.

So how has AllSaints, which recently celebrated its 30th anniversary, achieved record-breaking performances for the past three years in a row, boasting £39.9m operating profit in 2023 – an increase of 40% on the previous years – while EBITDA was up 18%?

“Fashion, by its definition, has to change,” says Peter Wood CA, AllSaints CEO. And AllSaints has done that successfully, he adds, because “evolution begins with realising what it is you actually have, and I always say we’re not a ‘retail business’, we’re in the business of feelings”.

“We’ve had four record years of results out of five at AllSaints, and it’s been based on the philosophy that the inputs create the outputs”

For the one thing that unites every one of AllSaints’ customers, he explains, is that they love fashion. “They all believe it’s possible to get up in the morning, put something on and feel a bit better. And our job is to help our customers do that, by experiencing the AllSaints attitude.” For that’s what the brand has always had, he says, pointing to a framed photograph on his shelves, depicting one of the first AllSaints shoots, three decades ago. “AllSaints isn't a ‘look’, and it isn’t an ‘item’,” says Wood. “The attitude you see in this photo, that’s the DNA of the brand, and that’s what we nurture.”

Given the passion with which he describes the business, not to mention his credentials in his industry, you’d be forgiven for assuming Wood is something of a follower of fashion himself. He insists, however, that’s not really him. Rather, it seems his ability to understand how the financial aspect of this, or perhaps any, business works is equivalent to his understanding of how people work. And that is what has enabled him to weather any storm.

Non-negotiables

“Since I took over as CEO, we’ve had four record years of results out of five, and it’s been based on the philosophy that the inputs create the outputs,” says Wood. This people-first ethos was put to the test when Covid hit in 2020, just a year into Wood’s time at the helm. “It was a case of, should the philosophy that served us well through 2019 be abandoned when Covid came, or should we lean into it even more?” AllSaints took the latter road, with daily leadership team video-calls for 15 months (including a voluntary one on Christmas Day) to check in on one another and keep hold of the notion that they were all in it together.

“It showed that this way of running the business was good for when we’re trying to grow, but also for when we’re trying to shelter,” says Wood. “So it gave us confidence that no matter what the world throws at us, those principles we hold onto are non-negotiable.” Which is why today, Wood says, his “number one KPI is how many of our team love their jobs. Because, unless the team really wants to help us achieve our aims, they’re not going to happen.”

This is the reason, he adds, “that we still hear stories where, despite clean audit opinions, things still go wrong with businesses”. And while the finger of blame often subsequently points at the auditor, “they’ve had no brief to form a view of how that business is being run,” says Wood. Using auditing culture to change such practices – exploring whether, for instance, a CFO can speak freely – “and getting a real sense of the leadership that business is operating under” could be an exciting development, he adds. Not least because investors want that assurance. “And,” he says, “that should come from a little further upstream than just the year-end results.”

The skills this would require are baked into the CA qualification, says Wood: “CAs get exposure to real businesses, to people [via their training]. Being a CA helps you understand that it’s not all spreadsheets, and gives you an ability to pull from different information sources, different personalities, all the different factors you need to enable what I think is the most important notion: good judgement.”

And while Wood isn’t anti-AI (he has ChatGPT on his phone), he insists “the quality of the answer is driven by the quality of the question”. And asking the right questions, he argues, is a uniquely human skill.

Righting wrongs

As is storytelling. “The first movie I went to see was Star Wars,” he says. “As a kid, if you asked me what I wanted to be when I grew up, I would have said Luke Skywalker. On the day I found out I was getting the CEO role [at AllSaints], I was in a little hotel room in SoHo in New York, late at night, and the Ellen DeGeneres chat show was on TV. One of the guests was Mark Hamill, because the final Star Wars movies were being released. He walked on and he was wearing AllSaints. So, I thought that must be a sign.”

If Hamill provided Wood with confirmation he’d made the right decision, he has others to thank for going into business in the first place. “I wouldn’t be sitting here today, with a job that I absolutely love, if it hadn't been for three conversations I had with people who had been on the planet longer than I have. I can remember them as clear as day,” he says.

The earliest was an older, cool kid from his hometown who inspired Wood to study physics at university; the most recent was a piece of advice that led directly to his current role. But it was the one in between that was perhaps most pertinent – to this conversation, if not his career path as a whole – as it led him to a life in business.

“Being a CA gives you an ability to pull from different information sources, different personalities, all the different factors you need to enable what I think is the most important notion: good judgement”

“At university, the father of my then girlfriend had done really well for his family by setting up a successful business,” says Wood, “and that inspired me.” Disillusioned by this point with science, which he’d found to be a surprisingly lonely pursuit, “I asked him what he thought I should do, and he suggested becoming a CA”.

So he did, training with Arthur Andersen and qualifying in 1997, subsequently taking on FD roles at companies, including USC and Melville Capital, until 2010, when he landed the role of CFO at AllSaints – the launchpad for his position today. As reported last year, this transition from CFO to CEO is on the up, with a third of FTSE 100 CEOs today having made the leap from leading the finance function to heading the company. Wood believes the roles require a similar skillset, just applied through a different lens.

“As a CFO in these often very entrepreneurial businesses, to help improve the chances of successful execution, I used to make my living anticipating what could go wrong and how we could mitigate that risk.” This developed a “muscle memory”, he says, to be able to see one step ahead. But now, as a CEO, he thinks, “What could go right?”

And he must be on to something, as things have gone right, not just for AllSaints, but also for John Varvatos, a menswear label which Wood also leads; according to Vogue Business, he “tiptoed in” to guide it through a financial recovery in 2020. And it hasn’t gone unnoticed, with AllSaints winning Retailer of the Year in 2023 at the Drapers Awards. “We’re all trying to work hard for a living,” says Woods, “so it’s nice to get that acknowledgement and celebrate the moment before reality kicks in and we’re facing the challenges we all have to work through.”

One such challenge must be holding on to the physical side of retail in an increasingly online world. But again, Wood is adamant the human element is something we have to recognise and value. Speaking to CA magazine back in 2021, he referenced the scenario of a father-son shopping trip, a shared experience that simply can’t be recreated online. Today, he points to a more solid form of proof that physical stores still have a place on our streets.

“We post every day on our social media and whenever it’s a broadcast coming live from our stores, it always gets more engagement than other posts,” he says. “We can see our audience loves our stores. How arrogant would it be if we try to force them to shop in a different way?” Today, the brand has 281 stores worldwide.

A real CEO

This confidence in his own abilities hasn’t always been so acute. In 2011, Wood had a one-year stint as interim CEO of AllSaints, and was at pains to tell his team that they should really think of him as the acting rather than interim CEO, as a result of his fear that he was making it all up as he went along. “I would be in situations where I would effectively run into a corner and think, ‘What would a real CEO do in this situation?’ and then run back in with an answer,” he says. Now, he says, with the passing of time and the wisdom it brings, “I realise that the best CEO you can be starts with being yourself.”

This formed the thesis of his presentation at the Retail Summit 2024, in which he explained that when the permanent CEO role came along, he challenged himself to understand what he – someone who was colour blind and who had never set out to lead a fashion business – could bring to AllSaints.

“I thought, ‘I’m a CA, so I can do the numbers; I used to be in a band, which brings in the teamwork element; and I have a deep knowledge of Harry Potter’.” Elaborating, he explains that after committing to watch all eight Harry Potter films with his daughter during one holiday period, he noticed that amid all the fantasy was some fairly sage advice.

“There’s a great part where Dumbledore says, ‘Harry, words are, in my not-so-humble opinion, our most inexhaustible source of magic.’ Basically, as a leader what comes out of your mouth has the power to inspire or really upset people, and I apply that in the business,” says Wood.

There’s a tongue-in-cheek element to the way this part of Wood’s story is delivered, but it comes with a serious moral at the core. Whether it’s the degree you studied, your previous roles or even the films you loved as a kid, whatever it is that has led you to this stage, absolutely value it. That’s a much more productive way forward than trying to emulate your own idea of what a CEO is. “And your team can always smell when you’re trying to be somebody else,” Wood says.

In terms of his own way forward, there are a couple of ambitions that are percolating. “There will be a moment where it’s no longer appropriate for me to carry on doing this role,” he says. He points to politics as a possibility, creative writing as another, without elaborating.

“For now, and this is the biggest compliment I can give to AllSaints and John Varvatos, I really don't want another job and there is no other place I want to be.” In the meantime, if there is even one CA who finds encouragement from Wood’s perspective, perhaps “just at a time just when they need it… then that’s the best way I can honour those who’ve helped me”.