Riding the rollercoaster
by Steve Hilleard
OPI interviews Peter Ventress who shares his reflections on a tumultuous year for Corporate Express
It’s been quite a year for Peter Ventress. Having just replaced Frans Koffrie as CEO at Corporate Express (CE) last autumn following an extensive review of the company’s strategic options, he set about implementing a raft of initiatives and structural changes designed to transform the underperforming company into a more operationally focussed and sales driven organisation.
But despite having ruled out a sale or breakup of the business, Ventress soon found himself on the receiving end of a well-organised approach by Staples to his company’s shareholders. Much has been written about the stalking process and CE’s flirtation with Lyreco before the historic deal was consummated back in the summer so we’ll spare you the repetition – check out www.opi.net if you somehow missed it.
Instead, here’s an exclusive chat with the affable Brit who has found himself on top of the office products world, heading up the entire international business outside of North America for our industry’s #1 reseller.
OPI: So, Peter, how does it feel four months after the deal?
PV: It’s exciting! The whole deal process was obviously all-consuming and a rollercoaster for everybody involved, but I think when we came out of it we felt that we had firstly done the right thing for our shareholders, but secondly we were with a great partner.
Insofar as the European operations of Staples are concerned, it’s a great opportunity to take a few steps forward that perhaps, on our own, we wouldn’t have been able to, either as Corporate Express or as Staples. So we’re excited by the opportunities that it affords us and I’m working hard to bring the businesses together.
OPI: I think Ron [Sargent] summarised it well in his interview with OPI recently, talking about the exceptional fit between the businesses. Is that how you saw it at the time?
PV: I think it brings the strengths of both companies together to form the world’s premier office products company. We now have a multi-channel business across the world giving consumers the opportunity to buy from us in all the major channels, which is terrific.
OPI: So, given that it was such a perfect fit, why did you initially set out to be obstructive?
PV: I don’t think we were obstructive. As I’ve said on record, we acted in the interests of our shareholders and, at the end of the process, we ended up with a friendly transaction and a friendly deal, and I don’t think my relationship with Ron suffered through the whole process. Even when we were doing the Lyreco deal we…
OPI: Didn’t Ron find out about it from a member of the press?
PV: Well, to put the record straight, I set my alarm for 4am on the day of the press conference to announce the Lyreco deal and phoned Ron at the office, at home, and on his mobile in order to warn him. Admittedly, I wasn’t giving him too much warning, but certainly I wanted to pre-warn him out of the mutual respect our companies had. But, unfortunately, some rather eager beaver in a French bank had decided to alert the press on his own initiative.
OPI: Was that proposed Lyreco deal just a distraction to drive up the price, or were you really serious about stepping back and giving Eric [Bigeard] the CEO role of a combined Lyreco-Corporate Express entity?
PV: I was very serious. We didn’t know how Staples would react but they obviously reacted in a positive way in terms of delivering value to our shareholders. It was purely a response to circumstances at the time, trying to respond in a professional way to the changing environment.
OPI: So now, four months on, what have you identified as the key differences between the two businesses and their cultures?
PV: One of the positive things that struck me about Staples – and it’s no secret to people who’ve followed them for years – is that they’re very focused on operational planning and execution which explains why their results have been so consistently good over the years and why they have such a strong position across the globe.
OPI: On a personal level, were you disappointed not to have been given a longer opportunity to execute your own vision and turn Corporate Express around?
PV: I suppose it’s been a bit of a win-win for me. I had a crash course in being the CEO of a public company, went through an exciting period of a few months where we changed many things internally, and then went through an acquisition process. I am now very fortunate to have a great job within Staples managing the business outside North America with superb opportunities to grow the business, develop people, develop our customer base, and clearly to develop my personal ambitions within Staples.
OPI: Let’s look at the integration process. How is that progressing within Europe?
PV: In Europe we’re presented with a slightly different proposition than in North America in the sense that we have three businesses – retail, catalogue, and delivery – which we have to bring together, creating a new Staples Europe.
Our work is focused in two areas – how do we benefit from our newly found greater scale, and how do we manage our relationships with suppliers to the benefit of Staples in Europe?
As in the US, we’ve compared supplier pricing and looked at areas where we can benefit through better purchasing, through scale, through better organisation and through, basically, driving hard bargains with those people who want to be partners going forward.
It may seem tough for the suppliers, but we genuinely want to be their customer of choice and, quite frankly, I think we represent a great proposition. It’s very much about trying to build partnerships for the future.
So that’s the first priority. Then we’re looking at the back office, leveraging scale and how bringing the companies together can make us more efficient. Longer term, I think there will be opportunities also in the supply chain across Europe, where we have logistics infrastructure and systems that can be exploited to the benefit of all three channels.
But one of the most exciting things for me is introducing some best practice from Staples, particularly commercially in America where the mid-market has been so strong for them and where, if we’re honest, Corporate Express has struggled over the years to really gain traction. We see that as a great opportunity to expand and grow the business.
OPI: So the European independent dealer community should be somewhat concerned that you’re out to eat their lunch?
PV: It’s a competitive world out there, and we’re certainly keen to be represented strongly in all areas of the market. But we also have to focus on our existing customers, ensuring that we execute our integration plans while delivering superior service and quality throughout the process.
OPI: How have your customers reacted to the deal with Staples?
PV: To be quite honest with you, I think most people believe that the Staples brand, as a truly global brand, represents something very strong in our industry. Most of our customers have been very positive about the change, particularly the larger international accounts. Being able to associate with a brand that they see delivering consistent and superior customer service across the world is important.
OPI: Looking at your people – associates in Staples-speak – there must be a great deal of uncertainty at all levels of the business. What does the future hold for them next year?
PV: Any change brings with it uncertainty, but we’ve been very open with our people and that will continue. We will have to make changes as we go through the integration process but we will make sure those decisions are clearly communicated to the people who need to know, and those that need to know will be the first to know.
Where people are adversely affected – some will unfortunately lose their jobs – we will communicate early, we will treat them fairly, and we’ll make sure that the whole process is handled professionally.
On the positive side, and this is particularly true in Europe, because we’re bringing three companies together, we’re really creating a lot of new opportunities. I think the European story is very much about building a platform for growth and I envisage, in the years ahead, that we will be creating opportunities as we focus on growing the businesses across all channels and all countries in Europe.
So not only will we be creating opportunities for those people within our company but, as always, we will be looking outside our company for talented people who want to become part of a real growth story in Europe.
OPI: So if any talented people are reading this interview?
PV: Pick up the phone and let’s have a chat!
OPI: Given this desire to add talented industry management to the company, it must have been a blow to lose Patrick Seghin so early in the integration process?
PV: Yes, disappointing, but that’s part of the changes that come with this process. Again, it opens up an opportunity for someone else and I’m very pleased that Eric Bousquet has taken over as the head of the catalogue channel within Staples Europe and Patrick joins Damartex, a French public company, with all our best wishes.
OPI: What about Peter Damman? The timing of his departure was somewhat surprising given that he was one of five key Corporate Express executives highlighted in the initial post-completion analyst presentation.
PV: Unfortunately it just didn’t work out between the company and Peter and I think both parties made a sensible decision. I really don’t want to elaborate further.
OPI: We’ve focused so far on Europe but you’re responsible for Staples’ entire international business. What are the plans elsewhere for a combined Staples-Corporate Express?
PV: Staples has really put some counters on the board in terms of the emerging markets. The high growth markets of Asia and South America are places where it’s important that we’re not only present, but developing business in both the retail and the delivery sides of the businesses in order to grow for the future.
So I’m particularly excited to have that part of the business under my wing because I think there are some superb opportunities to leverage our global scale, providing our customers with the ability to serve them on a global basis and, for me personally, to be in at the ground floor as we develop some very exciting growth stories in those developing economies.
OPI: So your remit extends to India, Asia, Australia…
PV: … and South America.
OPI: That’s a pretty substantial territory to cover.
PV: It does look like a lot of air miles, doesn’t it?!
OPI: So, since Peter Damman’s departure, who is looking after the shop in Europe when you’re clocking up all these air miles?
PV: Well, at the moment I’m not clocking them up. I’m not really looking at that side of the business until early 2009 when we hope to have some leadership issues resolved. Then I’ll have a bit more time to devote to these emerging markets.
OPI: Will that involve contemplating the acquisition of the other half of Corporate Express Australia, those shares which are publicly traded in Sydney? Aussie rumour suggests that’s partly the reason for Grant Harrod’s resignation and departure next March.
PV: Not at all. Grant has been with the company for about 13 years now and has simply decided that he would like to move to a different business, in a different industry, while remaining the CEO of a public company.
We haven’t announced any intention to do anything other than to continue with the Australian business as it is at the moment.
OPI: What is the impact of the financial crisis across the territories that you manage? And to what extent will the worsening economic situation affect Staples’ ability to realise those reported $200-$300 million of synergies?
PV: I honestly don’t believe that the current challenges affect the fundamentals of the synergies that we’ve laid out. If anything, it really is just a bit of a drag on the ability to grow in the next 12 months or so.
Business is tough in almost all territories but, like most companies, we’re focusing very much on the basics – focusing on our customers and doing everything we can to ensure that when this downturn or recession comes to an end, we’re strongly placed to emerge with a really powerful growth opportunity ahead of us. That’s when you can expect to see the company being leaner, fitter and stronger, riding the wave upwards.