Questions 23 to 30.
You will hear John Sergeant, a retail analyst, being interviewed about a chain of clothing stores called Sangra.
For each question, 23-30, mark one letter (A, B or C) for the correct answer.
After you have listened once, replay the recording.
You have 45 seconds to read through the questions.
Now listen, and mark A, B or C.
Woman: The big clothing retailer Sangra is currently in the news, and here to talk about its difficulties is retail analyst John Sergeant.
Woman: John, why have Sangra’s sales fallen so much?
Man: Well, they’ve started using top designers, but it takes too long to get the designs from the drawing board into the shops. Sangra haven’t realised that fashion trends are moving faster than ever, and they need to react much more quickly. As a result, they aren’t attracting younger shoppers. It really makes little difference who designs their clothes or what the stores look like if people don’t feel like going in.
Woman: They’ve been very short-sighted, haven’t they?
Man: That’s right. Sangra’s strength is in the middle market, but shoppers now want either expensive designer labels or low prices. At the same time, other stores have started to compete for the same customers, but are offering lower prices. Sangra’s response to these dangers has been an advertising campaign which was right off target, and which actually seems to have lost them customers. And amazingly, they’re still running it.
Woman: The last Chief Executive was thought to be responsible for many of the mistakes, wasn’t he?
Man: Throughout the nineteen nineties, the company was managed by Denis Howard, who was a strong leader. He decided on the policy of acquisition, and to be fair to him, he managed to persuade the Board. But when sales fell, Howard was forced out. If he’d already got somebody in position to take over, everything might have been fine, but as it was, a boardroom argument broke out. That’s when the company’s problems started.
Woman: So what s happening now?
Man: The new management’s started a high-cost policy of introducing what they call the ‘lifestyle’ idea into the stores, grouping merchandise according to the target customer. For example, instead of dresses in one area, shoes in another, they have one section aimed at active adults, another at teenagers, and so on. The staff seem to be behind them, but they’re finding that most of the stores just don t have the floor space for it.
Woman: Is this the solution to the company’s problems?
Man: Not really. They re also trying to make savings, like cutting the number of higher-paid staff to improve productivity; but the effect is minimal. The fact is that margins in retailing are being cut, and Sangra will have to do the same if they’re to succeed. I’m sure this will be their next step. Or else they’ll have to start shutting poorly performing stores, but that means shutting all of them.
Woman: Do you think it’s suffering from its old- fashioned, top-down style of management?
Man: Yes, but they’re beginning to change. They’re going to have to take much more notice of what shoppers want, but at the moment, they’re working to reduce the time it takes for new products to be manufactured, so for the first time they and their suppliers are co- operating to make improvements. To be honest, if the management were less autocratic, they could also learn a lot from their staff.
Woman: What would be your advice to Sangra?
Man: They need to remember that their years of success came from supplying a broad range of ordinary clothes. They’ve made too many mistakes recently, like moving into designer items. They should stop playing with new ideas and just do what they’re good at. There isn’t really a safe alternative.
Woman: How is the company likely to change in the next few years?
Man: Their main activity will still be the same, even if they decide to follow the trend into big out-of-town stores. Their venture into financial services and food halls, both of which are due to start this year, will have a considerable effect, though whether for good or bad remains to be seen. And we may well find Sangra stores opening abroad, and my guess is that it’ll be through acquisition.
Woman: John Sergeant, thank you very much.
Man: Thank you.
Now listen to the recording again.
That is the end of Part Three. You now have ten minutes to transfer your answers to your Answer Sheet.
Note: Teacher, stop the recording here and time ten minutes. Remind students when there is one minute remaining.
That is the end of the test.