2018: ADVEO CEO Jaime Carbó may have referred to 2017 as ‘transformational’, but this year has certainly turned out to be tumultuous. In a filing to the Spanish stock market at the beginning of September, ADVEO announced that Staples Solutions has signed an agreement with the wholesaler’s lenders to acquire all of its financial debt.
The company believed it had solved its financial and liquidity dramas as the banks agreed to a loan of €20 million ($23 million) in August, but only after ADVEO turned to investment firm Pimco for extra cash to solve its stock availability issues. The Pimco deal, however, would have left around €90 million in debt frozen for six years.
The wholesaler has battled to reduce its debt for the past few years, and in June hastily arranged a meeting in Paris to lay down the law in terms of its relationship with vendor partners, including the refusal to make pre-payments on orders and instead offering contracts of up to three years, guaranteed payment and preferred vendor positions.
Other ways of reducing its financial burden has been in the form of various sales such as its Tres Cantos facility near Madrid, Spain, and the ability to sell its former Unipapel distribution warehouses. In aiming for its goal of becoming a multichannel operator, ADVEO has rejigged its distribution model in Spain, Germany and Italy, with France and Belgium scheduled to follow suit next year.
Following the introduction of stationery brand Pergamy in October 2017, and jan/san brand Albiore this year, an EOS brand called Kineon will be launched in 2019.
2017: Having called 2016 a year of transition after selling its IT consumables business to UK distributor Westcoast and taking a number of key financial measures, 2017 can surely be described as a year of fundamental – CEO Jaime Carbó referred to it as “transformational” – change for ADVEO.
The headline news from the pan-European wholesaler’s camp this year is undoubtedly the abolition of the traditional wholesaling model at the company and setting a new course to develop into a multichannel provider of workplace solutions. Selling direct to end users may not be the most surprising of its new strategic pillars that will help ADVEO on this path, but it’s certainly the one that raised the most eyebrows.
Starting from scratch this year, the goal is to achieve direct sales of €67 million ($80 million) by the end of 2020 via four sales avenues: in partnership with its top resellers, through its Calipage dealer network, directly from ADVEO, and from new B2C platforms. The argument is that, as a wholesaler, ADVEO is essentially locked out of a large chunk of the addressable business supplies market with enterprise and public sector accounts.
Another transformational change includes a strengthened focus on own brands that compete in different sectors of the market. Carbó’s plan states these brands will account for €75 million of new sales over the next four years, thereby taking the ratio of own brand sales up to about 25% of total revenues.
In addition, the company’s franchise and retail network – Calipage, Plein Ciel and Buro+ – is set to play a considerable larger part in the future. Expanded product categories and services are planned to result in a much bigger share of wallet for ADVEO from these partners.
Most recently, the firm’s departure from its traditional wholesaling model has manifested itself in ADVEO outsourcing its logistics operations in Spain – a bold move for a wholesale operation and one that has already resulted in many job losses as well as staff re-allocations. It will be interesting to see if this is a sign of things to come for the rest of Europe.
2016: Jaime Carbó now has his feet firmly under the table at ADVEO after taking over as CEO at the end of August 2015. With a new senior management team in place, he unveiled a three-year business plan in March 2016 aimed at getting the wholesaler back on a sound financial footing.
That plan includes prioritising profitability over sales growth. A major consequence of this strategy has been the sale of the former Adimpo EOS business to Westcoast in order to refocus ADVEO on its one-stop shop value-added wholesaling model and on developing its more profitable independent reseller network.
The painful restructuring in Spain has now been completed and the performance in ADVEO’s home market is now improving again with its IT integration issues finally behind it. An aggressive plan to recapture market share is now underway, including growing the number of Calipage dealers in the country.
2015: New ADVEO CEO Jaime Carbó officially joined the European wholesaler on 31 August following the June dismissal of former incumbent Millán Álvarez-Miranda.
Carbó comes to the business supplies industry from Spanish olive oil manufacturer Deoleo where he led an organisational and financial restructuring during his four years at the firm. He will need those turnaround skills at ADVEO. Its operations in Spain continue to register sales declines of more than 30% following the poorly-executed implementation of a new technology platform, triggering a steep decline in overall company profits so far this year.
The new CEO has been given a clear set of priorities from the board of directors: get Spain back on track, ensure that best practices are shared across ADVEO’s different markets and consolidate the company’s business model. He will also be responsible for implementing a new strategic plan which will be revealed later this year.
Whatever that plan contains, ADVEO’s board is adamant that any future strategy must be carried out using a fully-integrated technology platform, so a pan-European rollout of the new system is set to take place on Carbó’s watch – something that will no doubt set nerves jangling in Madrid and around the rest of Europe.