LESSONS. This column will meander through the highways and byways of the collapsed Costcutter/Nisa-Today’s merger, so thoroughly debated in the public prints.
For those who have overdosed on the episodes, Vigilante will be of little interest this month, so turn the page.
But hold. Are there not lessons in life which every wholesaler, mutual or corporate, will want to take from the proposal – which was based on very sound Northern common sense – and its outcome?
The relationship between wholesalers and their independent retailer customers was at the heart of the matter. Competing wholesalers who were not involved should ask themselves – are they communicating adequately with their retailers?
OBJECTIVE. Who could deny that by putting together two successful wholesaling and retailing companies, both based on independent principles, that the eventual sum would be larger than the parts?
Who could deny that mergers, acquisitions, takeovers and the rest have given the giant multiples the hold that they have – and will maintain – on the market?
Who will deny, in the quiet of the night and at the call of elementary economics, that there are still too many wholesaler buying points in the market?
Why were the rebel forces so aggressive in their opposition to the merger when common sense embraced its commercial virtues?
TANGLE. The leaking of the proposal to all and sundry – but mostly to The Daily Telegraph, the bible of respectable Middle England – was the undoing of the mergerficionados.
Could the leak have been avoided? Could it have been anticipated and its impact blunted? After all, there were some sophisticates involved in the process, bankers and lawyers who knew the score.
How was the Telegraph persuaded to support the rebel cause? The City editor went on to print his negative personal view of the merger, which must have sown unwelcome seeds in claret-accompanied lunch conversations at the Savoy.
OPPORTUNITY. When other wholesalers began to take an interest and suggest that they might be interested in making a bid, should we have seen a proper auction – if the assets have a value let the market say what it is?
What did the bankers think of other bid overtures? What did the rebels think of them? Did we ever find out? Or was the rebel opposition based on a straight bat strategy – occupy the crease until darkness falls?
Was there an opportunity for a wider debate on the undoubted strength of the argument for a merger – you’ll go a long way to find two companies with such immaculate heritage and sound foundations built up over the years.
TECHNOLOGY. The answer to the last question is undoubtedly IT. The IT factor enabled retailers to talk “on the web”. And thereby hangs most of the tale.
The Captain will ignore the conversations in various bars, which focused on comparing the communication skills of the participants in the argument.
But what cannot be ignored is the way in which the rebels, taking advantage of democratic company structures, were able to score runs quickly. The email became the no-mail.
Merger proposals will not wither on the vine. But the advantages to the retailer must be spelled out with great clarity.
RE-RUN. In the good old 1980s, prior to the advent of the email, with its benefits and serious disadvantages, there was many an angry exchange between warring parties on the wholesale and independent retail front.
But salvoes were launched from public platforms to salivating trade press editors, often at conferences in the sun where late nights and wine “tastings” would often produce startling verbal assaults on a competing wholesaler.
In this merger war now simmering to an armistice, some statements by the opposition have broken the rules with absolutely no gain to the accusing party. Rather the opposite.
PROTOCOL. So where is the manual to which everyone can sign up when – as is inevitable – one wholesaler or group believes it can make progress in company with, or by taking over, another wholesaler.
There will always be legal bits and pieces which prevent one side or the other from saying what it wants and when. There will always be due diligence to process.
But the lesson to take from this matter is one of communication, and not only involving exchanges of information between wholesalers. It’s the retailers – whose numbers are shrinking – who must be courted.
And not only where mergers or take-overs are concerned. Communication is the daily heartbeat of the industry – whether it be supplier to wholesaler or wholesaler to retailer or vice versa. Get it wrong and you’re in trouble.
HISTORIC. Reliable sources say that the former hierarchy at Booker lost pound;500m in sales annually. This was due to strategic mistakes and poor communication, say observers.
This situation is now being corrected by the present board. But does it not ring again the bell that Vigilante sounded last month about wholesaler PR?
Quoting the opinions of trade press editors, some practitioners of the art of wholesale communication were named. But are communication skills given the right (top) priority by wholesalers?
Without a doubt, every wholesale boardroom in which the merger collapse is being discussed will ring with the word ‘communication’.
Retailers must not only be loved by their wholesaler. They must be seen to be loved, stroked and generally regarded with affection. It’s life.
Nisa-Today’s serves its wholesalers and retailers with exemplary product and marketing services. Some of its output from central office is unmatched. The retailers need to be encouraged to appreciate it.
THOUGHT FOR THE DAY. Who said it first? When a wholesaler begins to think about profitability, his retailer’s profit must always be the first priority.
GIANT. Dudley Ramsden, executive chairman of Nisa-Today’s, who will retire at the AGM on November 28, leaves a giant-sized gap in the independent retailer scene. With co-founder Peter Garvin, he was a genuine visionary.
Now it’s time for all those who travelled up to the Crown, at Bawtry, 30 years ago, to reminisce about those “good old days”. In a simple standard room (single, pound;9 a night) the pair sold the concept of a strong anti-multiple group to suppliers who, mostly, supported the principle.
Many other independent groupings have disappeared, some without trace. In the face of the multiple onslaught, Peter and Dudley saw it through.