Kate Swann: Argos highflyer takes up the WH Smith gaunlet

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Kate Swann is nothing if not ambitious. Why else would she have agreed to leave the high street superstar Argos for WH Smith, retail's ugly duckling?

Kate Swann is nothing if not ambitious. Why else would she have agreed to leave the high street superstar Argos for WH Smith, retail's ugly duckling?

"If I'd wanted an easy life, I wouldn't have been a woman chief executive of a FTSE 250 company," she says for starters. Let alone a company at the receiving end of a £940m bid approach that has just racked up a whopping £72m in losses.

With many in the City sceptical that the retailer, established in 1792, even has a future, Ms Swann knew there was every chance that her first results briefing could be remembered as her swan-song if the private equity house stalking Smith's tables a firm offer.

The 39-year-old, who has two children, was phlegmatic about the prospect of an early exit from the group she joined five months ago. "The board's job is to create shareholder value, whether that's through the current plans, or a different route. I joined to turn the business around and that's absolutely what I'm focused on doing now," she said, her careful choice of words belying her fizzier side.

Unnaturally rattled during what was only her second public outing in her high-profile post - her first being the group's annual meeting - Ms Swann did not mince her words when it came to explaining why operating profits at the group's UK retail chain had almost halved to £51m. Describing the group's core performance as "unacceptable", she said it was the "culmination of a number of years where the business has not fulfilled its potential".

Its failings - for which there were "no overnight" solutions - ranged from stocking stationery "from the Eighties", leaving its shelves a quarter empty during its busiest shopping period, stocking five-year-old books, and only selling its top 200 stationery products in 100 of its 545 shops, she said.

A marketing whiz, Ms Swann is under no illusions about the scale of the challenge of selling Smith's virtues to a frustrated public that prefers to pick up the latest chart CDs from Tesco for under a tenner and this month's reading group title from the likes of Ottakar's or Borders. Her less-than-visionary revelation that Smith's strengths lie in creating a "compelling offer in our core categories [stationery, books and magazines]" was basic business degree stuff (she did hers straight from school at the University of Bradford). Hardly what you might expect from someone who climbed the retail coalface, racking up seven jobs before being headhunted to replace Richard Handover.

"What we've seen is that as new competitors have come in - the Waterstones, the Ottakars and the Stationery Boxes and the card retailers - we haven't necessarily been on the front foot saying, 'Right, we're going to defend our position'," she says, her wildly gesticulating hands testifying to her frustration.

"We've sort of pulled back in terms of authority and put other stuff in, so we've lost authority and what I want to do is build that back. I want people in the UK to get to the point where they say, 'Of course I go to Smith's for stationery; of course I go to Smith's for books; of course I go to Smith's for my magazines.' That's what I want Smith's to be for."

She admits defeat when quizzed about when the group's stores, "located on 399 of the UK's top 400 high streets", last had a compelling offer. "Oh my goodness me. That is difficult to say," she replies.

The answer appears to lie in her Smith's shopping track record, which sees her dig deep for childhood memories when asked how often she used to visit the stationer. "As a child, I suppose, like most of us, I shopped in Smith's all the time." If she is relying on kids' weekly pocket money to keep the shops' tills rolling, shareholders could be in for a nasty surprise, although she later admits that her young daughter at least seems to spend a fair whack there.

While she claims not to have underestimated how tough the job would be, despite conceding there are "ups and downs", she lets slip that living near Stansted and working in Swindon is taking its toll. The round trip from Bishop's Stortford to Smith's head office - 254 miles - takes four hours and 34 minutes, according to the AA. She says her one-year-old "barely recognises me" anymore.

Notoriously driven, Ms Swann regularly works a 12-hour day, starting at 7am. She apparently loves fast cars, and has recently bought a new one, although her job does come with its own driver.

"I've been in challenging situations lots of times before and mostly, I think, I've found the same at Smith's. Some things are a lot worse than expected, and some things are a lot better. In the case of the better stuff, the staff in the stores are fantastic," she says.

One of her more challenging tasks came at Coca-Cola, her third job after completing a graduate trainee scheme at Tesco, followed by a stint at Homepride. As its marketing manager, she persuaded the US drinks group that to get teenagers and people on the move drinking more Coke, they should sell it in re-sealable plastic bottles. Within weeks of the UK launch, the now-ubiquitous 500ml screw-top bottles became the second-biggest selling items in stores.

Meanwhile at Argos, job number seven after marketing spells at Dixons and Currys and her first managing director's role at J Sainsbury's Homebase, as it was then known, she shares the plaudits with Terry Duddy for turning round the catalogue retailer.

Renowned among Smith's insiders for her "forthright views", Ms Swann largely won over the analysts who packed out her first presentation. Dressed conservatively in a black trouser suit, with a Pucci-esque turquoise and lime green neckscarf as the main nod to her femininity, Ms Swann set out her stall. "She came across well, but then she's always been good at marketing - particularly herself," one retail analyst said. Of her presentation, he added: "It was convincing enough for the board to back her, but not enough to make me believe she will succeed."

At least if she doesn't Ms Swann - her household's only breadwinner after her husband quit his job selling fruit and vegetables at the couple's local branch of Sainsbury's to look after the children - won't be out of pocket. She stands to collect at least £1m, in shares and cash, and few observers think she would be out of a job for long.

For now, though, she insists her thoughts are focused firmly on the challenge in hand. "What gets me up in the morning is that I think there's a real opportunity to turn this around," she says, adding: "It's tough. It's a tough job."