Retail Day
Retail Week, today
Posts Tagged ‘Stefano Pessina’
Boots, made for walking
Boots tends to keep a relatively low profile since it went private, but Jen and I spent a very interesting day at its Nottingham headquarters on Friday. We had a really packed schedule and met people in all parts of the business across its giant campus on the outskirts of the city.
The first thing that strikes you is just how big the site is, the size of a small town I’d say. It has a nice feel too - the buildings are all low-rise with a lot of space between them so if the sun comes out, as it did on Friday, I imagine it’s a nice place to work.
We spent time with Alex Gourlay, who runs the UK health and beauty business, and Simon Roberts, who runs the stores - very enthusiastically too - plus some of their less well-known collagues in the DC and call centre and on the product side. What impresses me about Boots is that while most private equity deals are based on a very clear vision, Stefano Pessina has backed his up by investing in what makes the business unique and in improving systems, stores and customer care.
We got a glimpse of that when we visited the product development teams, in a building affectionately known as Pizza Hut because it looks like a restaurant on a retail park. There were boffins in white coats testing products but we also met some clearly very commercial people who were from a scientific background and had achieved great success with No 7 Protect & Perfect and Soltan. The ability to combine retail and marketing nous with genuine product innovation is one of Boots’ strengths and Pessina, being the bright guy he is, has built on that rather than decide it was non-core.
That’s not to say there hasn’t been some pain - there have been job cuts and the move to a new distribution centre on the site has clearly been quite difficult, although paid off in real efficiency and availability improvements. The scrapping of the final salary pension last month has also inevitably caused some strife.
But there’s no arguing with the performance of the business and that the dismantling many feared when Pessina did his blockbuster deal in 2007 hasn’t been realised. By putting Boots lifers like Gourlay in key positions he has been able to remain true to the company’s heritage whilst also implementing a pretty ruthless modernisation, and so far the deal has been one of the unsung successes of the private equity boom days.
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Back on the rails
The appointment of former HBoS chief Andy Hornby as new chief executive of Alliance Boots has been confirmed this morning. This will surprise and anger many people after his role in the collapse of the bank, but I’m not sure it’s a bad move.
After all, it’s Stefano Pessina’s own money, and he’s no mug. And while he can’t be excused culpability for the collapse of HBoS, Hornby is no Fred Goodwin. I don’t know Hornby at all but everyone who dealt with him at Asda speaks highly of him, and he is clearly a very bright bloke. Running a major company outside the quoted arena is probably just the job to rehabilitate his CV.
The appointment also makes sense for Boots. While the existing management team seem to be doing just fine as it is, Pessina is always on the hunt for new deals so there’s no-one there really running group strategy in day-to-day and providing the link between the owners and the two main operating businesses. Boots is already proving a big success story of the recession and I think this might just turn out to be a very cute move.
