OPI: Let’s talk about the demise of the XPD family of dealer groups. You had a very tight relationship with those groups, so what’s your take on what happened?
JW: Well, first of all it’s slightly disappointing that we had no advance warning of what was going to happen – plenty of speculation and snippets about the liquidation and the set-up of a new company, but no actual communication from the group itself.
Once we did hear, we had to understand exactly what was going on, so we sent out a series of three letters to XPD dealers. XPD was a dealer group completely aligned to Spicers, so if XPD failed then there would be two other groups that support Spicers – Superstat and Office Power – that could potentially become a home for the affected dealers.
We needed to make sure that dealers of XPD didn’t end up in a group that was aligned to VOW – that was my key intention.
It wasn’t until XPD itself recommended dealers to join Superstat that we had to come off the fence. After all the speculation, we had to find out whether XPD was indeed a phoenix company because we had always made it very clear we would not support phoenixes. We didn’t actually have any details as to what the structure of XPD Group Ltd – was it just a rebranding of the old XPD or were there indeed significant losses made by the people within the business?
The outcome was that there were losses and that it was a phoenix and therefore we couldn’t have supported it even if we had wanted to.
OPI: But you weren’t particularly fussed whether dealers chose the Superstat or the Office Power route?
JW: There have been many dealer groups that Spicers has worked with very openly over the years, but we do have to be neutral about which ones to recommend. Of course, we wouldn’t recommend dealers to join a VOW-focused group such as Office Friendly or nectere.
OPI: So you weren’t tempted at any point to go down a continental-style Calipage/Plein Ciel route?
JW: No. Our focus at the moment is on making sure Spicers is delivering boxes efficiently and helping dealers grow. Any thought of moving off on a tangent like that at this moment in time would not be appropriate for us.
OPI: Something to look at in the future maybe?
JW: Oh, I think the whole market needs to look at its structure in the future. We’re all focusing on the likes of Amazon coming into the market with a very efficient supply chain and it would be foolish to count anything out in terms of long-term planning. We always have very interesting conversations when we get a group of dealers, wholesalers and manufacturers together in terms of what the future could hold.
So yes, I’ve got ideas but at the moment I’m absolutely focused on turning Spicers into a wholesaler that people need for the future.
OPI: You mentioned phoenix companies earlier and OPI readers will recall the joint statement that you put out with VOW last summer. It must be an expanding problem if you are happy to take the bold move of collaborating on a subject with your chief competitor.
JW: It’s not so much a bold move as looking to the future in terms of potential issues. It all started when we talked to our lawyers about the competition act and put a system in place whereby OfficeTeam wasn’t competing with Spicers’ dealers.
The conversation then moved on to the question of whether we could actually talk to our major rival in terms of sharing concerns about bad debt and phoenix companies? We were advised we could and it went from there.
We’re hoping that sending the message that people can’t simply phoenix and walk away from bad debt will have an impact. Robert Baldrey and I will both make sure that neither party either benefits from or falls foul of a phoenix operation.
OPI: The dealer group situation in the UK is quite unique, in terms of how many there still are. Do you foresee more groups combining or falling by the wayside?
JW: The key is: are they all differentiating themselves enough to deliver something to the dealers? Ultimately, the dealers will decide as they increasingly look at costs in the supply chain.
OPI: There’re clearly quite a few dealers out there that are struggling, another reason perhaps for the whole phoenix conversation coming up. Does that present an opportunity for the OfficeTeam part of the SPOT Group to acquire additional volume?
JW: I believe it’s more of an opportunity for Spicers supporting dealers that want to acquire these struggling dealers you refer to. It could be with regard to due diligence, SPOT Group experience or even financial assistance, but I believe that’s the way to go.
For OfficeTeam to go on the march and hoover up a whole group of dealers would almost certainly displease Spicers’ dealer base. Of course, if a big dealer comes up for sale that’s too big for a typical Spicers dealer to swallow then maybe OfficeTeam would step in, but I believe the vast majority of transactions like this will be smaller dealers.
Better Capital has made us aware that there is an acquisition fund available. I suspect the major opportunities lie in acquiring businesses in the specialist fields that we want to enter and that we talked about before. The core idea would be to bring in more expertise and/or to make the supply chain more efficient. Perhaps an FM company would be suitable.
OPI: Does that funding also apply to potentially acquiring a distributor/wholesaler in these new categories?
JW: Absolutely – it’s a very natural area to look at.
OPI: SPOT Group’s most recent set of results was not too encouraging and that applied to OfficeTeam as much as it did to Spicers. Better Capital in particular referred to a “poor sales performance” in the early part of 2015.
JW: OfficeTeam undoubtedly suffered from a lack of attention from senior management during the early part of 2015, as we pretty much solely focused on Spicers. But changes in our structure, including the sales force being split into three divisions – existing business, new business and specialist sectors – and some very successful above budget new business wins mean that OfficeTeam is likely to show flat year-on-year sales in 2015 and positive growth in 2016.
OPI: Let’s talk about the industry at large. Given that you’re pretty time-pressed I’m curious as to why you’ve chosen to get involved with UK trade association BOSS Federation.
JW: I’ve questioned the relevance of BOSS for many years, a view that is mirrored by plenty of dealers I’ve spoken to. But I also think the industry needs a federation to bring it together.
It’s a bit of a ‘give back’ mind set. This industry has been very good to me, both professionally and personally, so by joining the BOSS board I was hoping to help make it much more relevant to the daily lives of both manufacturers and dealers.
OPI: On first impressions, do you think that’s possible?
JW: I’d like to answer that question in about six months’ time. We’ve certainly taken some actions that will be a watershed in terms of the future BOSS. I’d like to think that we will succeed in making it a much better and relevant organisation. At the moment it seems to work only for the manufacturers, but not for the dealers.
OPI: You might recall a year or two ago there was a discussion about the potential of having a single industry event in the UK with the dealer groups and the wholesalers all combining and having a big shindig somewhere, removing a lot of the cost that the vendors have at the moment in terms of duplication of effort, travelling, etc. Have any further moves been made in that direction, even just small baby steps?
JW: We are still having those discussions, but it’s words rather than actions at present. It’s going to take a great deal of planning and it won’t happen before 2017/8 if at all. There are many interested parties and also a potential impact on dealer groups’ own conferences, so this would need to be an industry-wide agreement and one that would take a lot of organisation.
But yes, there is a general consensus that the UK industry as a whole would benefit from one major exhibition, one industry awards dinner, one dealer conference, etc, rather than spending umpteen weekends at smaller events.
OPI: Is it something that BOSS should run?
JW: It would be the obvious thing for BOSS to run, but they currently do not have the resource to do so. It needs to be well organised and have the potential of income generation as well.