Georg Jensen is a Danish design house renowned for artistic boldness, superior craftsmanship and collaborations with some of the leading designers of the past century and today.
Mehul shares more about his journey from CFO to CEO, Georg Jensen's plans for the future, the importance of understanding your customer, connecting retail and online, plus lots more!
Listen to the full episode below.
If you prefer to read, scroll down to read the full interview transcript.
Sorcha O’Boyle: So, on the Podcast with me this week is Mehul Tank, former CFO of British Womenswear brand Hobbs, and now the CEO of Danish Lifestyle brand Georg Jensen. [Inaudible 00:00:44] in 1904 Georg Jensen has a really rich heritage and a beautiful design Ethos. Mehul I can’t wait to hear more about life at Georg Jensen, it’s such a beautiful brand with a really brilliant story and for you, it’s a brand that you made the move from London to Copenhagen for back in June 2020, I think, in the height of that pandemic summer. How was that for you and what is lifelike in Copenhagen?
Mehul Tank: So, thank you Sorcha firstly for inviting me on to the show. You know I have to say I chose an incredible moment to make a move like that. I think a lot of people back in June of 2020 would not have made that decision. But Copenhagen when I first arrived was in a very different phase of Covid, compared to the UK. It had shut down very early on, managed the pandemic quite well and so when I arrived here it was remarkable to see no one was wearing a mask, everything was very open, and it felt like a very magical city at the time. We did go through obviously a difficult phase in the winter, but in general, the Danes have really managed to control the pandemic in ways that I think a lot of us could have benefited from in other countries. But yes. I have really enjoyed moving here and living here. It's been quite exceptional I have to say.
Sorcha O’Boyle: Yeah. It’s a lovely lifestyle I think in larger Scandinavian countries. We were chatting briefly before; I was there in Copenhagen a few years ago and just loved it. It’s a great city.
Mehul Tank: Absolutely. The city itself is, you know, it's exciting, it's cosmopolitan, a lot of visitors, but also the people. I think the culture, the values that the Danes live by around honesty, sustainability, trustworthiness - I really see that come to life. I see that in the workplace; I see that in personal lives. There's a real sense of community here that I have fallen in love with, I have to say.
Sorcha O’Boyle: Well, that’s great. It’s so good to hear you know when people make a big move to a new country and a new city, it’s great to hear success stories. So, I know obviously, you have a huge experience from your time at Hobbs, at Mexx and so many other direct consumer brands. So, I’d kind of like to, you know, kind of jump in and pick your brains a little bit. For brands who are selling direct to the customers - whether that be online or in-store - how do you see the next kind of twenty-four months unfolding for direct brands?
Mehul Tank: Yeah, you know, I think we are entering a different phase, right now. I think there's intense competition. It feels like the whole world has woken up to customer and to customer kind of metrics. So, there are a lot of heritage brands that are perhaps a little behind the curve. I would say even Georg Jensen itself was a little bit behind the curve and we've had to learn very quickly. And what I see right now is obviously an appetite for digital marketing and an appetite to grow online channels at a much faster pace than people had anticipated previously and with that comes a lot of competition. So, you know, I anticipate it's going to be quite a challenge to keep growing our direct channels. What we are seeing at Georg Jensen for sure is a swing back into retail and our retail business is performing quite well. Estimating that swing back from online to retail has been a little bit of a challenge for us. So, I truly understand the customer metrics. We have of course invested like many other companies in trying to understand our customer better. How she shops, where she shops, when she shops and how frequently, and I think that will start to benefit us and will continue benefiting us I think as we look forward. I anticipate probably many other companies have done the same thing as well, I would hope. I think the next couple of years are all about the customer and making sure that we service her well. I think the service proposition will improve. I think people will pay a lot of attention to loyalty with their customers and trying to figure out how do they keep that stickiness with the customer going forward.
Sorcha O’Boyle: And has your customer surprised you since kind of you know, the I suppose the world returning back to some kind of normal. Has she changed the way she shops? Has she changed her behaviour? Are you surprised by the swing back to retail? Did you expect people to stay online more? What’s your take?
Mehul Tank: Yeah, I think the big surprise for us was how quickly she shifted her buying pattern from retail to online during Covid. I think that they were uncertain times and what we did see - and this of course varied by market - there are some markets that are much more mature when it comes to online behaviours and Georg Jensen is a very global company. So, for instance, Australia is our second largest market, which most people don't realise but what we did see is an eagerness and willingness to shift online. The question, I think the open question for us is would she shift back to retail stores when they opened again and there really is an appetite. What we are seeing right now - stores that are open or just recently reopened - are seeing like for like gains not just for 2020 but to 2019. And in some cases, double-digit like for like gains. So, there is a reason for stores to exist. We're seeing that kind of customer swing back and then I think that is then resulting in slightly softer online metrics than we would like. It's making it harder but then of course there's the challenge, right? I think in Covid it was much easier to publish online numbers that showed great growth. Now we have to work hard and therein lies the challenge. I think for the organisation, how do we maintain that loyalty? How do we maintain that stickiness? What more can we do? Are there actions we can take in terms of product? Are there actions we can take in terms of promotions that might encourage her to continue shopping with us online at the same pace?
Sorcha O’Boyle: I’m really interested in heritage brands like Georg Jensen because obviously, you’ve been going over a hundred years now, you have a brilliant heritage, really strong kind of identity and ethos. But how has it been within a brand like that, as you’re managing that digital transformation? What are the big challenges you’re facing and how are you coping with or how are you meeting them?
Mehul Tank: Yes, it's a very good question. Firstly, I think you know it is a beautiful Danish design brand and we operate in several different categories. So, at the top of the pyramid, we have silver holloware which is pure silver pieces that sell for a pretty high-ticket item and then we have jewellery and home, both of which are very important parts of our business. I think that the heritage has allowed us to have a reason to exist and for us to connect with customers on a much deeper level. I don't think one can trade on that continuously. I think my biggest challenge when I walked into this business is we were very product led which is not unusual for a heritage brand, but customer along the way was not at the forefront. I think my biggest challenge was to pivot the organisation to make sure the customer becomes part of the conversation when it comes to product development or to go to market. Making sure that we were designing with a customer in mind, not necessarily being led by the customer. That’s kind of our role I think in many ways is to actually lead the customer into what is the new design aesthetic for the future, but really finding that right balance, that not designing in a silo without a clear viewpoint about the distribution of the customer that comes with it.
Sorcha O’Boyle: As you’re coming in, in a CEO position and you’re addressing an organisation and trying to help it make that pivot, I imagine that as an international brand - as you say Australia is such a big market for you - was that quite difficult in terms of managing your teams and structuring your teams and getting everybody kind of rowing in together? Was that a challenge for you?
Mehul Tank: I think the challenge was the kind of the pace at which we wanted to move. I naturally have a pretty fast pace, I think, in my thinking and in my kind of expectations and I think that pace, for that to trickle through the organisation obviously creates some tension. We also have a relatively devolved management team. So, for instance, each of the markets have a Managing Director and they run their organisation, their country and they have a fair level of autonomy. So, the challenge of course is to make sure that we are all aligned. What I did see was an eagerness for change when I joined the organisation. We have for a fair amount of time been in a cost-cutting kind of optimisation mode and we were finally seeing signs of growth and have just delivered our fourth quarter of you know straight growth and we can anticipate that continuing. And I think that that builds excitement and that helped us all get on the same page. So, the journey we're on today is very much a growth journey which of course is quite exciting. People are now talking more about how can we expand the business? How can we attract more customers? What new distribution is available? What new countries might we serve on? Which is a very remarkably different conversation than a year and a half ago.
Sorcha O’Boyle: Yes. For sure. And how do you balance - I know I keep going back to the heritage - but how do you balance the tradition and the heritage of the brand with that innovative outlook?
Mehul Tank: Yes, it is a very good question. I think we had to go back to our original core and really be very clear about the brand and the definition of the brand. We have obviously years of history; we have a rich archive that we pull from, and we always make sure that when we design product there's a reference to something within our past. We will draw inspiration from our archive, but we will also make sure that we are progressing the design forwards. So, it's not easy but we have a lot of material to pull from. I think our challenge right now is, we often talk about iconic product and Georg Jensen certainly has iconic product both in silver holloware, jewellery and home. It's really finding what is the next iconic product and that is really the holy grail for us. If there's a legacy I'd certainly like to leave at the company, is to help develop that next range of iconic products that is not yet even in the marketplace, but that is something that we will now start to think of as Georg Jensen, you know, true Georg Jensen product.
Sorcha O’Boyle: One question I had was, because a lot of your background is in clothing with Mexx and Hobbs and so on. How was it for you moving from a clothing brand and a clothing customer to, you know, the jewellery, the holloware, the lifestyle brand.
Mehul Tank: Yeah, you know I have worked predominantly in clothing. In part, design has mattered to me a lot. Despite being a finance person I've always been drawn to brands that I think are quite authentic and that have a design aesthetic to them. And that could be in clothing but also I think as I’ve gotten a little older, I have become much more interested in furniture, home decor and that's probably connected to my living situation when I brought a house, etc. So, I see it as somewhat integrated. I think obviously customer behaviour is very different when it comes to clothing and the frequency of purchase and the seasonality. The business that we're in here at Georg Jensen it's not a seasonal led business. The frequency of purchase is very different but there is definitely a design aesthetic that comes through and that is really important. That's probably the common thread throughout my career. I really do want to associate myself with brands that I love, that I would participate in or that I can really feel proud about.
Sorcha O’Boyle: What about the move from CFO to CEO? Because as you say you come from a finance background and you do see people making that move but it is maybe one of the more unusual career moves for people to make.
Mehul Tank: I think over the years I've had the good fortune I think of having relatively broad remits as CFO and certainly I've sought them as I've gotten more involved in businesses and I think people would often, you know, as a CFO you do get the opportunity to get involved in decision making and key decision making to the company so I've always welcomed that, but always approached something from a business standpoint more than just a pure financial standpoint. Over the years I have expanded my remit. So even when I was at Hobbs, Meg Lustman the CEO, asked if the online part of the business e-commerce would report into me, which you know is a little unusual for a CFO, but it was because I had managed performance marketing before at a prior company and I cared about customers so much. So, I sought out the opportunities and I think when I was given this kind of change in role, you know I could not be happier. I mean I do think for me it is a transition. As a CFO I do tend to be quite numbers led but product is very important. It’s probably product is the one area that I've had to come up to speed on the fastest and I rely heavily on my team in areas that I'm not as well-versed in. So, I make sure when I'm hiring that I hire into that depth of knowledge and I think I'm a quick learner but I'm also, you know, able to collaborate, I think, quite well with the team to make sure that we are all finding the best solution whether it be in product, whether it be in marketing, whether it be in eCommerce, as a team.
Sorcha O’Boyle: Yeah it's interesting that you mentioned Meg Lustman because we had her on the podcast not too long ago and one thing that really struck me from speaking to her was, you know, that every decision has to be made you know kind of fairly ruthlessly [Inaudible 00:15:48] you know what is best for the business and I suppose coming from the financial background you’re able to ask those questions and find exactly what is best for the business so.
Mehul Tank: Yes, I mean I think you're right. I mean financially often, there are often the drivers of kind of making decisions and the filters we use when it comes to making decisions. You know what's best for the business can vary of course. I think we've just come out of a very difficult time of uncertainty for many businesses, so time frames became very short in terms of looking at investments or looking at any type of return rates. I think as we come out of it our idea of what’s best for the business is beginning to expand and beginning to become more mid-term. I wouldn't say it's quite long term as yet, but we are making sure as a business and me as a CEO that I'm not just purely focused on the short term and just delivering this year’s set of numbers but making sure that I'm laying the groundwork for the products that we're launching next year and in particular the year after, to make sure that we are really laying the right groundwork for future success. That involves investment. I think as CEO, I see the one big difference between the CFO and the CEO kind of role is the time horizon that you view things. So, I'm really enjoying it. It is a slight shift.
Sorcha O’Boyle: Can you tell me, because like you said earlier, it’s been a very uncertain time for a lot of brands and a lot of, you know, basically the whole retail industry. Can you tell me a little bit about maybe one of the big challenges that you’ve faced in your career?
Mehul Tank: I think, you know, probably one of the hardest moments in my career is when I was working for a large clothing brand Mexx, actually in Amsterdam and realising we were trying to do a turnaround. We were doing a brand repositioning and we had investors that were a little, I guess the best word to say shaky, and a little uncommitted to that turnaround. I think for me it was very difficult to make a difficult decision about pushing the company into a restructuring and essentially a bankruptcy and a restructuring plan to buy it out of bankruptcy. The loss of jobs around that weighs heavily on me. I had been there a mere four months or five months at the time. I think we did everything we could to try and keep things, to get things back on track, but there really was no other option. I think that that was a difficult moment, you know, to have to tell employees that they are losing their jobs and that, you know, perhaps only 30% of them will end up continuing being employed by the new entity. So that I think was difficult. In any situation I have to say letting go of employees is not easy; it's not something I cherish. I'm very clear when it's necessary and I'm very clear that it's often necessary for the health of the business, but it is not something that I take very lightly.
Sorcha O’Boyle: What about in terms of kind of a broader question, what are the things maybe, the three or four core things that you think a direct brand really needs to get right in order to be successful?
Mehul Tank: Yes. I think you know there are some very key things. I think product is the most important thing for a direct brand. I've worked in many companies that obviously product is the need when it comes to how they sell their story. I think for Georg Jensen product of course is incredibly important. But more than that, you know. I've also worked in my past for companies where the product isn't necessarily that appealing but the marketing is particularly strong. So direct marketing companies that really understand their customer and know how to contact, how frequently they should contact and the kind of activities that really engage their customer. In the US, I've seen marketing being particular well applied to brands that I think are perhaps a little middle of the road but can be successful because their marketing strategies are quite strong. In Europe, what I find actually a little more interesting is I actually think that product tends to lead the way and marketing has sometimes taken a secondary position. So, when it comes to direct brands, I actually see that both need to perform strongly. I don't think one can succeed without the other anymore. But I think those two areas kind of need, for me. Then of course you obviously have to have a good merchandising mix; you have to have a good distribution channel. I don't want to describe those as secondary, but they are certainly important and certainly where we are spending a lot of our focus here at Georg Jensen. We think we have the marketing right; we think we have the product mix right. With the launch that's coming up I think distribution is worth spending a lot of time on today, to say “Is the mix of distribution at stores online, right? “Should we be, you know, pulling back on some of our wholesale? How do we manage the inherent conflict that sometimes happens between wholesale and retail?” These are the kind of the key questions that we are working on right now and I think we're seeing some success here because we're beginning to make the right longer-term decisions around owning customers and making sure that’s how our own direct channels grow.
Sorcha O’Boyle: Yes, that’s really interesting. That balance between wholesale and retail I always find very interesting. So how, for you, what are kind of the markers of getting that balance right?
Mehul Tank: Well, I think we have a very nicely profitable wholesale channel. Where I was seeing an opportunity within wholesale is to make sure that our product offering in wholesale met the needs of the wholesaler without putting the needs of our own direct business. I think that we are applying a product segmentation that allows us to continue growing wholesale profitably and the wholesale partnership is getting stronger for us because we are designing specifically into what a wholesaler might need in terms of either price point or in terms of aesthetic or in terms of who their customer is. That customer is not necessarily the Georg Jensen direct customer. So, what we are also making sure is that the Georg Jensen direct customers also getting product that’s relevant to her - typically it's a woman - and so making sure that the segmentation around product meets both the needs. I think the wholesale, you know the partnership and the reach of wholesale is so strong for us and is so wide for us and I really enjoy working with our wholesale partners. They have sometimes a better knowledge of our product and a better understanding of the customer than we do and I think we learn a lot from each other. Having said that our focus today is to make sure that our customer and our customer database and our customer engagement levels are rising direct. So that part of the business is important. We have a retailer state that needs to remain profitable and needs to remain productive and that can only happen by us, you know, trying to grow our own database as well.
Sorcha O’Boyle: Can you tell me a little bit about your expansion into China? So, I saw that you recently launched Torun in August. How has that been?
Mehul Tank: China for us, actually it's been a very exciting year for us in China. We have a very, very, small team on the ground there. Historically though I have to say China has, we've made a couple of missteps, so we've entered China with some pretty large plans. We've kind of pulled back because we realised actually the plans were not really the right opportunity for us. So, we went quiet in China until about a year and a half ago, we kind of booted our plans and we have a small team on the ground, and they delivered some amazing numbers. Our focus initially was on wholesale as well as a team of home business, we just launched, Torun jewellery which I think is what you’re referencing and are really excited by the appetite we're seeing and kind of anticipating from customers in China. So, we've had a Pop-up store in Beijing that has performed really well so we’ve proved that the customer likes us, that she wants to buy jewellery from us, and we can make a profitable retail venture. So, we use that to have negotiations with some of the top department stores within China and opened SKP which is a luxury department store in Shanghai. That is just the beginning of our retail journey within China. So yes, I think both the home category for us has proved out. We've now been trading home for about a year and a half, almost two years, doing really well and we've just essentially launched jewellery and are looking forward to seeing some high growth there. China of course is the key market when it comes to luxury. It is a gap in our portfolio in terms of geographies, but we are addressing that, and I think the key question we ask ourselves is, when exactly should we double down and we make a much bigger investment in China? I think we are fast approaching that point - not quite there yet - we're still looking for a few more proof points, but it’s an exciting journey and regardless, it is nicely profitable and growing rapidly for us.
Sorcha O’Boyle: Fantastic. Yeah, it sounds really exciting. So, we’ll watch that space for Georg Jensen and takes on China.
Mehul Tank: [Laughs] I mean it's certainly, yes. Georg Jensen would like to take on China. China we are seeing an appetite. I think what seems to be appealing as well to the Chinese customer is the heritage brands and the Scandinavian aesthetic. So, I think we have a right to exist there. The awareness is a little low but we're working on that.
Sorcha O’Boyle: Fantastic. Okay. Listen Mehul, thank you so much. I’ve really enjoyed chatting with you and I can’t wait to see how Georg Jensen grows and evolves and takes on the world basically.
Mehul Tank: Thank you. Thank you. I mean it's been an exciting certainly a year and a half for me and I really look forward to the next year ahead. We have some exciting plans but thank you for inviting me to come on the show I really enjoyed it and I hope I was helpful.