Independent wholesaler group seeks partner(s) for bright future together.
It could read like an advert in the classifieds. Advantage Marketing Wholesalers (AMW) is back in the market and looking for suitors following the departure of its long-standing partner O Henry to rivals SP Richards (SPR).
O Henry, the leading regional wholesaler in the mid-Atlantic and south-eastern states, was swallowed up by SPR on 1 April, breaking up AMW’s ménage-a-trois and leaving some in the independent channel wondering what might happen next. One thing is certain – it definitely has a future, according to its management, which has opened the door to those interested in starting a relationship with the third-largest US office products and furniture wholesale organisation. Quick to reassure its US dealer customers, AMW told OPI that it was firmly committed to increasing the group’s numbers.
AMW’s two remaining members, ActionEmco and PPI Wholesale Office Supplies, are now listening to interested parties that would like to become part of the club. Far from marking the end of the group as some had suggested, members of the AMW board said that the loss of O Henry will spark a revival that could take it in new – and surprising – directions.
"We are exploring a number of options. Some are natural partners and others would be non-traditional partners where we think our marketing could be of great help," said AMW’s senior VP of marketing and merchandising, Jack Reagan. "The strength of AMW is our marketing group which has always been done in-house – it’s the backbone of our organisation, so it can lend itself to vertical industries."
Reagan, who also holds the title of EVP of ActionEmco, said the group could survive with the strong businesses of PPI and the larger ActionEmco behind it, but the management wants more than to simply rest on its laurels.
The forced dissolution of the old set-up has, conversely, opened doors for the remaining members. ActionEmco has now begun to run a daily service into the south-east of the country – O Henry’s old patch – something it had previously agreed not to do under a gentleman’s agreement. The change also opens up the possibility for a different dynamic within the organisation itself. The departure of O Henry frees up ActionEmco and its CEO Mike Maggio, historically the more aggressive member of the three, to work with PPI to develop the AMW brand.
"ActionEmco was always the largest entity and PPI is still committed, so AMW could stand on its own, but it wouldn’t be moving forward at the pace that it should be. In some ways this is an opportunity for us," said Reagan.
"The O Henry and PPI mission was very similar to ActionEmco by being focused on the independent dealer. Barry Frahm [O Henry] and Barry Greenberg [PPI] have a great deal of experience and sharing ideas on a regular basis was always important to us. Cost-saving was just as important and the set-up gave us some additional clout with the vendors, so we had a three-pronged attack which made up the foundation of the group." Aspects which the remaining members would like to retain, with AMW now looking at "every true wholesaler in the OP arena" with an attitude of open discussion available to anyone who wants to talk.
This could revive some international partnerships that had been mooted in the past. When Mike Maggio’s predecessor Bob Scribner was a member of the AMW board, he used a relationship with Kingfield Heath’s Alan Barclay to hold "preliminary conversations" with interACTION and Kingfield Heath. Those have since been put on hold, but there are available synergies "particularly between ActionEmco and Kingfield Heath" according to Reagan, leaving the door firmly open.
Contact with interACTION, the pan-European alliance of wholesalers, in the past centred around its Q-Connect private label range. AMW recently chose Legacy as part of an alliance that offered the private label range to is.group dealers, but now that Legacy is established, Reagan said it would consider having those discussions again.
It remains to be seen whether the current financial climate will have a bearing on AMW’s ability to find a partner, with wholesalers feeling the pinch like everyone else. The benefits of a strong wholesaling family for independents are obvious but they will have to wait until later in the year while the group considers its options.
"Our business is strictly independent dealers and that channel is as strong as ever, although we are seeing pockets of recession around the country. I think we are all in for a tough year, but we don’t see any major incidents occurring.
"This year will see some things happening at AMW that will be surprising to some people – but not until Q4," added Reagan. "We believe that if you’re not moving forward then you’re probably moving backwards."