In taking up the challenge, Milgrom has not only filled her father’s shoes, she has significantly outgrown them. She is now CEO of one of Australia’s largest privately held retailers. Additionally she is also chair of the Melbourne fashion festival, the Australian Centre for Contemporary Art and actively involved in a host of other arts, business and philanthropic organisations.
To arrive at her current position at the top of the retail food chain, Milgrom has moved with speed and certainty through a variety of roles and challenges. Naomi started with the Sussan retail chain in 1988 as Strategic Planning Manager and by 1990 she was Group Managing Director. From there it’s been full speed ahead with the expansion of the Sussan Group outside Australia and the acquisition and salvation of a major competitor that was on the brink of collapse. Whilst achieving all of the above Milgrom also acquired 100% equity in the Sussan, Suzanne Grae and Sportsgirl retail chains and as a consequence now controls over 520 retail outlets and over 4000 employees.
In a notoriously male-dominated corporate world Milgrom has achieved all of this while juggling the demands of raising a family, maintaining a balanced view of the worlds she inhabits and working extremely hard (and quietly) to give back a great deal to the community. In 2006 she debuted on BRW’s rich 200 list and, with an estimated wealth of $495 million, is now Australia’s fourth richest businesswoman.
Genes in fashion
Naomi Milgrom comes from a pedigree of retailers who, much like the Myers, came to Australia, started out small, and built an empire that laid the foundations of today’s thriving and vibrant retail industry.
The Sussan story started with Milgrom’s grandparents, Fay and Sam Gandel, who established a small hosiery business on Collins Street in Melbourne in 1939. In 1948, the Gandels met a Romanian immigrant who was importing goods into Australia. The importer was Marc Besen, who had started up his business after attempting to combine study and making a living, but had decided to opt out of the former. Besen struck up a relationship with the Gandels and became a supplier to the Sussan hosiery business. It was here he met Sam and Fay’s daughter, Eva Gandel, Naomi Milgrom’s mother.
Marc and Eva were married in 1950 and Marc turned to manufacturing after the Federal Government placed restrictions on imports in the early post war economy. In partnership with another manufacturer, Besen started up Stardust Fashions, producing blouses for Sussan and other businesses around Australia.
By the early 1950s however, Sussan was flourishing, placing increasing demands on Fay and Sam Gandel in managing the business. To cope with the increasing pressure, the Gandels asked Besen to join the company. Besen, seeing potential in the business came onboard and in 1959, he and his brother in-law, John Gandel, took over the company.
Now in the driver’s seat, Besen and Gandel were hungry to grow the business. In the sixties the pair purchased a further 90 stores throughout New South Wales and Queensland, namely through the acquisition of “Chic Salon” – a fashion chain owned by the Woolworths Group. The pair re-branded the stores with the Sussan name giving the retailer a significant presence in the marketplace.
In 1979, Sussan was to become a household name after it launched its “This goes with that” advertising campaign. The highly successful campaign lifted the profile of the brand and the name became synonymous with women’s fashions.
In the early1980s, co-founder Sam Gandel passed away and his son John sold his stake in Sussan to the Besen family, including the company’s entire property portfolio, the flagship of which was Highpoint West Shopping Centre. John Gandel decided to change tack and went on to develop Chadstone Shopping Centre.
Now under auspices of the Besen family, and with a fresh-faced Naomi Milgrom breathing new life into the company as Marketing and Strategic Planning Manager, the Sussan Group purchased Suzanne Grae in 1988, which at the time had 182 stores throughout Australia. This was part of a strategy to broaden its target markets with a low priced fashion chain and strengthen its presence in women’s fashion retail.
Milgrom leads Sussan into the nineties and beyond
Milgrom was appointed Group Managing Director in 1990, however it wasn’t until 1993 that she was handed the Sussan Group’s entire retail activities.
Milgrom’s succession to the Sussan Group wasn’t easy. She told delegates at an AFR BOSS Club address last year, “I got tripped over many, many, many times just to make sure that I knew that I had to be successful or it (the business) wasn’t going to be there”. However, based on her experience, she says that allowing the freedom to make mistakes is crucial to nurturing a good leader, because by being able to take risks, new ideas evolve.
In her view, new ideas, creativity and vision are critical to good leadership. She says that leadership is not about implementing standards, procedures and performance. She believes it is more about having clarity of vision and the ability to inspire others.
It was Milgrom’s vision that drove the Sussan chain beyond Australian shores in 1995 when she opened up eight stores in New Zealand. Milgrom says that going to New Zealand wasn’t as simple as she anticipated. She said that she thought the move wouldn’t be much more difficult than entering another state, however, she admits it has been far more complicated. Different currency, a different way of working and writing two orders for everything has placed a lot of pressure on people in the company and the New Zealand market responds to trends differently than the Australian market.
After a twelve year struggle, Sussan now has 20 outlets throughout New Zealand. Though she has realised her vision, Milgrom has learnt some valuable lessons from the experience. The biggest, perhaps, is that she has no intentions of going global. She says that each market is idiosyncratic and to go global would place too much pressure on her team.
In 1999, Milgrom was to face an even bigger challenge when she led the Sussan Corporation into a takeover of the 101 store Sportsgirl chain. At the time, Sportsgirl was in receivership under the South African company, the Truworth Group.
When the Sussan Corporation took over Sportsgirl, rent to sales percentages were extremely high. Milgrom said that she went to every single landlord and told them she was buying Sportsgirl out of administration and she needed some reprieve. Not one helped her out.
To make matters worse, after years of poor administration, staff morale was at an all time low. Milgrom says she kept on 64 people from Sportsgirl’s head office when Sussan bought the business.
Speaking at the AV-CC Women in Leadership program, she said, “By anyone’s standards Sportsgirl was a company in total disarray. But did that mean that people in the company were not good retailers? No. They were given poor leadership”.
She says that these people believed in the brand, but didn’t know what to do. “The first thing I had to do was make them realise that the brand could live again. So that was my biggest challenge, saying to them ‘this is what we’re going to do, this is how it is going to work’. And, all those people who thought they were losers in 1999, because they had spent five years losing money, were winners in 2000.”
Under seemingly impossible odds, Milgrom managed to turn the company around in little over a year. The turnaround taught Milgrom a valuable lesson about leadership which has profoundly affected her view of what is important to a successful enterprise.
“Talented people in the right culture and with the right coaching and development can provide a competitive edge an organisation is looking for.”
Milgrom believes today’s leaders need to be both visionary and more collaborative in style. She says leaders need strategic skills because you have to know where you’re going and how best to get there. But she adds that just as important are people skills, because people are the implementers of your vision.
“Without a team of people who are creative and keep reinventing and reinvigorating our products, we won’t have a business in the long run.” “I see my greatest challenge as a leader is acquiring and retaining the right people and having them motivated to deliver our business objectives.”
She says that productivity is closely aligned with job satisfaction and fulfilment. She says that it is estimated that rehiring, retraining, lost opportunity costs and exit costs to replace people who leave is two and a half times the annual salary. Milgrom believes that retaining staff and keeping them inspired to remain productive can have a dramatic impact on your bottom line.
To keep high performers motivated, Milgrom puts them in roles before they are ready or she will design jobs for them. She believes that people learn new skills by being put into a role before they have the skills for it and high performers will naturally thrive in such an environment. She suggests that effective leaders create an environment where professional development and change is accepted as the norm.
“Talented employees are impatient. They want it all now, they are astute career managers and they place a high value on the quality of work life.”
She says that the old authoritarian style of leadership is no longer appropriate and leaders who focus only on the bottom line are not effective, not even at achieving that bottom line.
“They must measure performance in terms of outcomes and not in terms of 9 to 5 bum hours on office seats.” Milgrom says that business leaders also need to change their way of thinking about women in the workforce. 98 percent of her employees are women and many are working mothers.
Milgrom says the Sussan Corporation has created a culture of trust where employees have the flexibility to tend to family matters such as a sick child or parent/teacher meetings when necessary. She says that work environments where a person has to lie to deal with family problems are destructive and simply create a culture of lying and mistrust.
“Businesses which continue to enforce inflexible practices are pushing men and women out of their employment, and often in the case of women out of the workforce altogether.” She says that a good leader realises that work is just a means to an end and people’s lives are complex. According to Milgrom, a job is no longer forever and good people will move on if their lives don’t match their work.
She believes that employers who adapt to this change in the employment market will be the ones who draw the best talent, because in many cases people now value company culture and flexibility over remuneration.
Aside from attracting and retaining good staff, Milgrom said that leaders also need to understand and adapt to changes in the economy and consumer trends to sustain a good business and a strong brand. According the Milgrom, one of the biggest changes over the past few years has been the increasing emphasis on Corporate Social Responsibility.
“People are increasingly saying to business now, profit is good, but some of it needs to be ploughed back into communities which helped produce it and it cannot come with the unacceptable cost of corruption, exploitation, environmental destruction.”
“We’ve entered a new era of interconnectedness, an era in which business must be connected to the community, to the nation and to global environment.”
Sussan is a major partner of the Breast Cancer Network of Australia (BCNA) – a partnership which started out 15 years ago with the Sussan Group sponsoring a fun run. Now, employees can volunteer at BNCA functions, Sussan stores distribute information and raise awareness about cancer and Sussan raises funds through the BCNA Fun Run and other product sales. The company’s involvement with BNCA is now part of its brand identity and differentiation.
Suzanne Grae also has a workplace giving program where for every dollar employees put in to selected charities, the Sussan Corporation matches it.
Perhaps the most interesting initiative is Sportsgirl’s partnership with The Butterfly Foundation, an organisation that promotes and addresses prevention and early intervention of eating disorders and issues related to body image.
The company has not only made a commitment to raise money and awareness of the organisation through flyers and advertising promotions, but it is also adopting in store policies that are in line with the principles of promoting a positive body image. The company has committed to stocking garments up to size 16 in some of its ranges, and in August this year it is training management to spot the warning signs of eating disorders in staff members and to counsel any staff displaying inappropriate behaviour that promotes low self esteem and negative body images. It has also committed to not using underweight models in any of its advertising campaigns. The company says that its models range from size eight to ten, of which ten is considered a ‘medium’ in Sportgirl’s sizing spectrum.
Milgrom believes business is particularly well placed to work with not-for-profits because it has the resources to get things done, and, unlike government bodies, it is not mired with bureaucracy and is more adept at taking risks and trying new approaches. She believes all this can be harnessed for the common good.
In addition to working with non profits, the Sussan Corporation is also looking at its own CSR practices. Milgrom says the company is using environmentally friendly plastic bags and is trying to cut down on paper usage in stores.
With global warming as one of the world’s most pressing issues, Milgrom is also planning to build a highest rating green building both inside and out for the company’s new head office. The new building will also be designed to cater to the increasingly complex needs of her staff. Milgrom is planning to incorporate a breastfeeding room, bike racks and showers into the complex and is currently speaking with a number of child care centres about child care facilities for employees.
Milgrom’s progressive approach to leadership has not gone unnoticed. In 2003, Ms Milgrom was awarded the National Council of Jewish Women of Australia’s “Woman of Achievement Award” for her contribution for business and she has also been the recipient of the Centenary of Federation Medal for outstanding service to the fashion industry. In 2006, AFR Boss recognised Milgrom as one of Australia’s most outstanding business leaders. She was only one of three retailers.
When asked what the future holds for the Sussan Corporation over the next 20 years, Milgrom responded by saying that she has her eye on a few more companies that are currently in private equity hands.
“I do see short termism at the moment as a great problem, and I think that people like us are very very well placed in the future to be able to take advantage of the fact that we are long term players.”
The Sussan Corporation is now the only large retail family business in Australia in its third generation and Naomi Milgrom has no intention of relinquishing her family’s legacy. With no plans of retiring, it will be interesting to see what the next 20 years hold.
