Unlocking Volume Growth—Being Ready For The Big Bets: A Conversation With Régis Schultz, JD Group (Podcast)

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Niamh Stone:
Hello and welcome to the World Retail Podcast. This episode is part of our third podcast series, produced in partnership with the global retail team at AlixPartners.

Today’s interview is with Régis Schultz, CEO of JD Group, one of the world’s leading sports fashion and outdoor retailers, operating more than 4,500 stores in 36 countries. Régis has led JD since 2022 and is one of retail’s most respected leaders, having worked at Al-Futtaim, Monoprix, Kingfisher, Darty, and Boots, to name just a few.

This episode looks at how retailers can unlock volume growth by being ready for the big bets. To discuss this with Régis, I’m joined by Paul Martin, Global Retail Growth Leader, Partner & Managing Director at AlixPartners.

Paul, thank you for joining me on this episode of the World Retail Podcast.

In this episode with Régis, we’re looking at the headline Being ready for the big bets. Can you give us an idea of what some of those big bets are for retailers at this time, and what readiness might look like?

Paul Martin:
Hello, Niamh. It’s great to be here. I’m really looking forward to our conversation today.

As you highlighted in your introduction, this is a theme I spend a lot of time discussing with retail leaders around the world: how do you drive like-for-like volume growth in a market that is broadly stagnant across many economies?

We have created a framework looking at nine distinct levers that should help retail businesses unlock that like-for-like volume growth, and today we’re going to focus on how you place big bets in a stagnant market. I believe this is a really crucial topic.

It’s fair to say that retail has gone through at least a decade, if not longer, of turbulent times. We’ve seen digital disruption and experienced a global pandemic. In that context, retail has not delivered the hoped-for growth over the last couple of years.

Yes, we have seen value growth, but that has largely been driven by inflation. People—by which I mean consumers—are buying less and using fewer services today than they were before COVID.

But any disruption in a market also creates opportunities. Where there is distress, there will be opportunity for those who are brave and bold enough to embrace it and deliver the growth we’re talking about today.

And in that context, we obviously have Régis here with us today, who I would describe as somebody who has made many bold moves in his career, and I’m really looking forward to exploring that in more detail.

Niamh Stone:
Thank you, Paul.

And without further ado, welcome, Régis, to the World Retail Podcast. How are you today?

Régis Schultz:
Good, good.

And you mentioned some of the retailers I’ve been in charge of, but I think you should add Darty and Boots, because those were very good stories.

Niamh Stone:
Brilliant.

And I’m sure many of our listeners will know and love JD Group too. So just to start us off, it would be great to get a brief introduction from you to the group and what the last few years have looked like for JD’s growth trajectory.

Régis Schultz:
JD has grown very, very fast over the last 10 years, and I think we have continued to grow very fast over the last four years as well.

When I joined, the board had a clear mandate: deliver 10% growth. And 10% on £10 billion is £1 billion every year, so that means you need to find a lot of opportunity to deliver that type of growth.

That has been delivered, so I’m pleased to say that when I joined, the business was an £8 billion business. This year, it is a £12 billion business, a little more than that. So we have delivered £1 billion of growth every year for the last four years.

That has been driven partly by acquisitions to consolidate our marketplace and our market share in the U.S., in North America, and in Europe. But most of the growth is coming from organic growth, with an accelerated program of opening doors in the U.S., in Canada, in Europe, and in APAC.

There has also been development in franchise, which has been very successful for us.

So that’s really JD. We are the market leader in the countries where we operate.

Paul Martin:
Fantastic. Thank you for that overview and introduction, Régis.

I mentioned a few moments ago that we are really focusing on growth, and you’ve already highlighted the very impressive £1 billion of growth per annum you have been achieving.

As a retail leader, you always have to balance many different priorities. Would you agree that driving like-for-like volume growth is one, if not the top, priority for you? And of course, how do you define like-for-like volume growth?

Régis Schultz:
I would say no.

As you mentioned, in most of the economies where we operate, especially in Europe, population is stagnant or going down. In fact, volume is driven by population. It’s as simple as that. If you have fewer people, you have less volume.

So I think there are really two things.

First is value: how do you drive more value? That value part is really important. How do you make sure that what you do creates value—value for the consumer, but value for you too?

The second part is around the store model. I was a franchisee of Inditex, and I remember when they started the strategy around “less is more,” reducing the number of stores to make the stores bigger. It was about fewer, bigger, better.

As a franchisee, I said, why should I close some really profitable stores? I didn’t get it. But to be fair, they were right.

Today, I see that strategy—fewer stores, bigger stores, better stores—as the one best adapted to the new world we are in, where strong retail parks are getting stronger, but the weak ones are getting weaker.

Traffic is diminishing in stores everywhere in the world. Everywhere we operate, we see traffic going down. When shopping is only about buying commodities, people go online, because that is the best way to do it.

The store needs to be a demonstration. It needs to be an experience.

I think there is a bright future for stores when they create an experience, when they showcase something that is really fantastic. There is no future for small stores in the middle of nowhere that just play a convenience role.

Either it is an omnichannel play, where you are close to the consumer for ship-from-store and click-and-collect, or it has to be a destination.

Today, I think it is much more complex than simply driving like-for-like growth. It is about value, it is about giving an experience to the consumer, and it is about the omnichannel strategy.

Paul Martin:
Thank you, Régis. You’ve highlighted some very different and very important facets of growth.

To your point, less can sometimes be more.

The complexity, of course, in retail—and I say this with a pinch of salt, because some commentators will say retail is really quite simple—is that if you think of Maslow’s hierarchy of needs, you start by fixing the fundamentals and being really, really good at the basics. Then you move up that hierarchy, especially in a stagnant market, and ask how you take market share from competitors. Then at the top of that hierarchy is today’s topic: placing big bets.

If you think of your career, and especially JD Group, you have obviously placed a number of bets over the years. How important is placing these bets for you?

Régis Schultz:
Having turned around Boots and Darty, I think those turnarounds were based on fixing the fundamentals. That is the most important thing. If you don’t have the right product, the right price, and the right service, all the rest is useless.

So I would echo what you’re saying. If you don’t fix the fundamentals, there is no point doing something else.

At Darty, one of the things we did was omnichannel. And if you take Monoprix, it was the same. It was all about the omnichannel proposition and making sure you adapt to a new world that has completely changed our industry.

I don’t know if omnichannel used to be a differentiator to drive demand, but today I think it has become part of the fundamentals.

So I would say the fundamentals today are: first, product; second, price; third, service; and fourth, omnichannel, because now it has become a fundamental.

After that, placing big bets is frankly a risky game.

We did it a little bit with Monoprix through the deal we did with Amazon, which was a fantastic deal for Monoprix. We were nowhere online, and today Monoprix is number one online in France because of two big bets: the agreement with Amazon and the partnership with Ocado. If you play it well, it can change the trajectory.

At Al-Futtaim, there were a lot of big bets, because it was about reshaping the portfolio completely. Al-Futtaim was, and is, a retail conglomerate. We moved from losing money to making a lot of money just by changing the portfolio and adapting it to a new world. That was very efficient.

At JD, the fundamentals were very strong when I joined the group. I think the board was looking for growth, and we placed some big bets through expansion.

The issue about big bets today is that the stock market does not reward you for them. For retailers, investors are looking at share buybacks and dividends. They don’t really believe retail is a growth industry.

You’ve seen that with Tesco, really moving out of international growth to focus only on the U.K. and investing most of its capital into share buybacks. And that is what the market likes.

In the case of JD, we built a fantastic business—number one in the U.S., bigger than Foot Locker, whereas we were nowhere when I joined—and number one in Europe, where we were number three. And you don’t get rewarded for that in terms of stock price.

So today, because of where retail sits in the mindset of investors, the emphasis is much more on fixing the fundamentals, focusing on one market, and giving back to shareholders through dividends and share buybacks.

I think that is quite sad, but that is the state of the stock market. It will change, hopefully. But for the moment, you don’t get rewarded for placing big bets.

Niamh Stone:
You mentioned there just how important expansion has been to your big bets at JD Group.

You’ve expanded and strengthened your portfolio through acquisitions in the U.S. and across Europe. What have been the key lessons from your experience in driving scale and market access in those new territories?

Régis Schultz:
I think the first lesson is the one I said before: you don’t get rewarded by the market. So make sure you have a shareholder that supports that strategy.

Today, private equity would probably be the right model if you want to grow. It is more likely you would pursue that path with private equity than with a listed company. That would be the first lesson.

The good thing for us is that while we are listed, we have a shareholder with 52%, and that shareholder is really supporting this strategy around growth.

That is the beauty of it. But again, you don’t get the reward from the market, so that would be the big learning.

Niamh Stone:
And looking ahead, what types of deals and partnerships do you think hold the greatest potential for JD, and where do you see the most value?

Régis Schultz:
Today, I think we have built scale in the markets where we want to operate.

There are still plenty of markets where we could operate, but we do not want to operate by ourselves, and we have developed a very successful franchise model.

We started in Africa, the Middle East, and Asia, and I think we will continue in that direction because it is a little bit the best of both worlds. It is low capital, so it is asset-light, which the market likes.

So you can continue to give back dividends and do share buybacks, while at the same time continuing to grow.

Today, my big bet for the future is around developing the franchise model in parts of the world where there is still no strong sports-fashion retailer. I think we are doing that better than anyone else in the world, and that is why we are market leader everywhere we operate.

Paul Martin:
If I build on the M&A topic, Régis, we have obviously seen a slowdown in overall M&A activity in recent years.

Yes, there have been some very significant deals in this space, mainly in grocery, but if I look especially at non-food, we have seen a lot more M&A activity related to distressed situations—special situations where businesses have been acquired out of insolvency using pre-pack vehicles and so on.

Do you think the M&A landscape has fundamentally changed, and is it the brave retailers who are embracing this changing landscape?

Régis Schultz:
No, I think if you take my industry, we have seen Foot Locker taken over, and we have seen us taking over others. You see it in electricals with Ceconomy and JD.com as well.

So I would say there has still been a lot of activity.

The fact that there have been distressed deals is really a reflection of our industry, and the fact that our industry is changing very quickly. If you are not relevant, someone else will be.

So I don’t think it is really a reflection on M&A activity. It is more a reflection of the fact that retail is tough. Retail is not easy.

You are highly leveraged because you have a huge asset base with stores, and the world is changing.

There is this omnichannel tension that creates winners and losers. We can see that in the U.S. in grocery. The more digital it becomes, the more it becomes winner-takes-all.

And in that world, you do not always need to make acquisitions, because you can take share yourself.

The barrier to entry in digital is much higher than it is in physical retail. Everyone can open a store. But to build a website and create traffic—today, that is not for everyone anymore.

It is interesting to note that 20 years ago, all the new entrants were coming through digital. Today, there are no more new entrants in digital. The price to enter is very high.

That is why we are seeing concentration through bankruptcies and similar situations, while the excess space in the physical market gets reused for different purposes.

Niamh Stone:
We’ve spoken a lot today about the importance of getting the fundamentals right, Régis.

In the current market, in the face of slowing demand and margin pressure, how are you ensuring that those fundamentals we spoke about—right product, right place, efficient store operations—remain at the core of JD’s growth strategy?

Régis Schultz:
It is by focusing on them.

Acquisitions are always sexy, and people like them. But there is nothing more sexy than a pair of socks, because that delivers more margin and more turnover than anything else.

So you need to make sure that you love the socks more than doing acquisitions.

Paul Martin:
There we go. So getting the right socks in the right place at the right price at the right time is a key part of success. I will definitely remember that quote, Régis.

Régis Schultz:
Yes. Socks are sexy.

Paul Martin:
I think another point to touch on is that the market is evolving, there is distress in the market, and you have lots of different priorities.

I mentioned earlier the different levers we have identified that can help organizations drive growth across fixing the fundamentals, differentiating to drive demand, and placing those big bets.

But a cynic would argue that the days of doing things sequentially are over. You have to do things in parallel. But that raises the question: in an age of scarce capital, both human and financial, how do you manage doing all of these things in parallel? Any advice or thoughts on that?

Régis Schultz:
I think less is more.

You need to focus. It is impossible for an organization to do too many things.

That is why we have reduced the acquisition side of things, in order to focus.

Four years ago, the market was growing at double digits. At that moment, you could focus on acquisitions. When the market gets tougher, you need to go back to the basics.

You cannot do everything. Less is more, and you need to focus on the key things that make a difference for your business.

Niamh Stone:
I’d love to move on to some leadership and culture questions, Régis.

We’ve spoken about the importance of getting the fundamentals right and reacting appropriately to the market, but big bets often succeed or fail based on leadership behaviors.

How would you describe your leadership style when navigating uncertainty, and how do you create confidence internally to move fast, even in a high-stakes environment?

Régis Schultz:
I would make it very simple.

Say what you do and why you do it.

I think the why is more fundamental today than it has ever been, especially with the new generation.

Spend time explaining the why. You will never lose time by doing that.

And then do what you say.

Lead by example.

If you have these very simple but very clear principles, I think you have a chance to create confidence and engage your people.

People want to understand why you are doing things, and they want to make sure you are doing what you say and leading by example.

Niamh Stone:
Absolutely.

We’ve just spoken about the tension between protecting the core and backing new growth plays, but how do you personally decide where to push harder and where patience might be the smarter option?

Régis Schultz:
It comes back to your basics, and how strong they are.

That is what I discovered when I joined this business. It was in a growth market, with fantastic expertise and fantastic positioning. So my job was really about delivering growth, placing some big bets, and building on that strength.

When I joined Darty or Boots, it was exactly the opposite. The basics were not right. We did not have the right product or the right price.

So I spent my time fixing the proposition before doing anything else. We did no acquisitions, nothing—just the simple basic things.

It is exactly the pyramid of Maslow. If you do not cover the first part, you do not go to the second one.

It is as simple as that. If you do not eat, you are not going to run. First, you need to eat.

Paul Martin:
Yes, there are of course many analogies we could use in this context. We often find people discussing the balcony on the second floor without having built the foundations of the house, which is of course a very similar idea.

Régis, you’ve obviously held many fantastic leadership positions across multiple countries.

At AlixPartners, we run an annual survey looking at disruption, and this year’s findings tell us that retail is one of, if not the most, disrupted industries in the world.

Then we ask leaders: what are you going to do about it? The response suggests that retail leaders are often among the least likely to face directly into this disruption and change things, because we know change is difficult.

Looking back over your career—and you’ve already talked about articulating the why and living your values—if you were speaking to your younger self or to other CEOs today, what advice would you give about facing into change and acting on it?

Régis Schultz:
Two things.

First, no regrets. Just go for it.

Second, be passionate about what you are doing. If you are passionate, you take risks, because you like what you do.

If you do not put your soul into it, if you do not put all your energy into it, nothing will happen.

Retail is a fantastic industry because every morning you start with nothing in the till, and every evening you need to have something there at the end of the day. That creates a lot of energy. It can be negative or positive.

How much positive energy you bring into your organization is what makes change possible, because it is all about being positive.

I remember when I joined Darty, the newspapers were saying Darty was finished, because it was the moment when online was really emerging and we had nothing online, especially in electricals.

Three years later, we were number one online.

If you put a positive spin on things and say, “It is possible,” that changes everything.

I remember when I joined, some of my executive team members said, “The internet will never be something for us.” And I said, “Well, let’s look at it differently. If it happens, what do we do?”

It is all about attitude. Be positive about change, and do not put your head in the sand waiting for it not to happen.

The fact that I have changed a lot in my career is also about leading by example. Every time, I have put myself at risk: new country, new business, all of that.

So be positive about change and show that it can create positive outcomes. I think it is all about that.

Niamh Stone:
That’s a wonderful way to conclude our interview today.

As Paul said at the start of the conversation, there is disruption in the market at the moment, but there is also opportunity. And, Régis, what a great way to finish—with a positive perspective on all of it. So thank you very much, Paul, and thank you, Régis, for joining us today on the World Retail Podcast.

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