Profile; Nick Hodges; Saviour of a Durex in distress
Patrick Hosking meets the man who pulled condom maker London Internatio nal Group back from the brink
Sunday 05 May 1996
The second is an electric-blue, stuffed sailfish which Hodges caught off the Florida coast and now has hanging on the wall beside his desk, banished by his wife who won't have it in the house.
The third is Hodges himself, all 19 stone of him. At school he played second-row forward in the rugby team and it's not hard to see why. Here is a refreshing contrast to the conventional jogging and lettuce-eating boss. He loves French food, both cooking it and eating it. He is a serious wine lover. He drinks it and invests in it and confesses to burning his fingers a few times on vintage burgundy. He certainly seems knowledgeable about fine wine. "There hasn't been a good claret since 1988," he opines.
The gourmand in him shows. Seated in his office near St Paul's Cathedral, he brings to mind that PG Wodehouse character who fitted into a big armchair as if it had been built around him "by someone who knew they were wearing armchairs tight about the hips that season".
Hodges' other passion is selling. In his long career as a salesman, then sales manager, there is barely a consumer product he has not hawked around Britain: Crosse & Blackwell soup, Golden Wonder crisps, Kleenex tissues and Johnson & Johnson baby oil have all had the Hodges treatment. He loves brands and admires brand builders like Coca-Cola and Grand Metropolitan's Haagen Dazs.
This week he has another selling job to do: convincing LIG shareholders to approve the pounds 46m acquisition of Aladan, the largest maker of condoms in the US. All the signs are that he will walk it. For in his three years as chief executive, Hodges has rescued the company from near collapse and doubled the share price. Shareholders are not about to argue with that kind of performance.
To understand his achievement, a brief history lesson. By the early 1990s LIG had all the appeal of a punctured condom. Convinced that the condom market was mature and unexciting, it had embarked on an ill-fated diversification strategy - first into fine china, then into photo-processing. It was a disaster. In 1993, the company's nadir, it issued no less than three profits warnings and passed the dividend. The then chief executive Tony Butterworth was persuaded to take early retirement and Hodges, who had only recently been promoted on to the main board, was invited to take over. Having been running the condoms and surgical gloves operations, he was untainted by the disastrous foray into photo-processing.
"I was surprised," he recalls. "I thought I'd missed my chance. I was 53 and you tend to think that once you pass 50 your chance has gone."
It was a grim time. The business was haemorrhaging cash. The banks, led by NatWest and Midland, were owed almost pounds 200m and were uneasy; they installed Arthur Andersen to keep an eye on things. Hodges observes: "I knew we were in trouble. The company was going bankrupt fast. But there was never any doubt in my mind that the core business could make a profit. We had two real jewels which were surgeons' gloves and condoms. Even in the darkest hours, when things got tough with the banks, that kept me going."
He set about cleaning things up. That meant disposals. Out went the photo- processing operation which was given away to its management. Out went Wright's Coal Tar Soap, Eucryl toothpowder, Woodward's gripe water and a string of peripheral brands.
Meanwhile, Hodges set about pruning and simplifying the core business. That meant factory closures and considerable pain. The total workforce was slashed from 10,500 at the peak to just 4,500 today. In July 1994 a deeply discounted one-for-one rescue rights issue shored up the ravaged balance sheet. Gradually the company began to look stronger. Now Hodges is starting to invest heavily in the brands. He has stepped up the advertising spend from pounds 20m to pounds 30m. The Aladan deal, he hopes, will strengthen the company's position in condoms worldwide and give it a leading position in examination gloves in the US. There is still much to do, but LIG is at least out of the danger zone.
Hodges was a war baby. He was born on 26 August 1939 in Braunton, north Devon, just as Hitler's armies were massing on the border with Poland. Eight days later war was officially declared. His father, a hotel worker, joined up with the Royal Engineers. His mother later moved to Essex and one of his earliest memories was being rushed into an underground shelter during an air raid on Dedham.
He was an only child and at 11 was packed off to boarding school, Colchester Royal Grammar. He remembers: "It was a bit of a shock to the system. You miss your mother. But I was a sportsman and I quickly got accustomed to the life." In school holidays he earned pocket money by helping with the cleaning and portering in the hotels his father managed. Later he became an adept barman, he says.
With three A-levels under his belt he went on to Northampton College, part of London University, to train as an optician. He is vague as to the reasons why. He qualified but almost immediately switched directions, joining Nestle as a sales representative. "All my friends were going into sales and getting cars." His first job was to make calls on grocers and take orders for Crosse & Blackwell soups and Branston Pickle.
"I loved it. It was not like today. You started early in the morning. You had to wear a hat and have clean shoes." After two years he moved to Kimberley Clark to sell Kleenex tissues. He was only on the road for two years, rising to regional manager before jumping ship to Golden Wonder. Then came spells at Johnson & Johnson and a drugs wholesaler Sangers.
He joined LIG in 1982 as UK sales director for consumer and hospital products. His great coup was to develop the Biogel range of surgeon's gloves. Traditional gloves were powdered to make them easy to put on damp hands. This could be dangerous to patients. Instead Biogel gloves used a hypo-allergenic, protein-free coating. They proved to be a money spinner worth more than pounds 50m a year in sales. The margins are said to be collossal. While hospitals pay 40 cents (70p) a pair for powdered gloves, they fork out $2 (pounds 1.10) a pair for Biogel gloves.
Hodges puts his money where his mouth is. He has 434,000 shares in LIG, alas, most of them bought long before the 1993 share collapse. But he also has 716,000 options, many of them showing a handsome profit. Last year he got a 44 per cent pay rise to pounds 411,000. He has a house overlooking Lake Annecy in France within a stone's throw of two Michelin-rosetted restaurants where he can indulge his love of good food, and drives a 7- Series BMW. He and his second wife Christine - "the result of a blind date in Manchester" - live in Gerrard's Cross, Buckinghamshire. They each have three grown children from previous marriages.
The future now is to steer LIG beyond the recovery phase. "There's a real job to finish here," he says. The Aladan deal could be just the start of part two of the Hodges' LIG story.
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