The Player: Bill Grimsey, Chief Executive of Wickes; Bill's restoration job on a DIY Goliath
Wednesday 03 March 1999
CHALLENGE: implementing the five-year recovery plan set out at the time of the rights issue in 1996.
This has a number of objectives including: a sweeping reconstruction of the business in terms of relationships with suppliers, employees and customers; investing in a new store format; opening new stores; improving margins; and building the Wickes brand.
The company also needs to rebuild its reputation in the City after an accounting scandal two and a half years ago and an investigation by the Serious Fraud Office. The SFO inquiry continues and officers have yet to decide whether to take action against former Wickes directors, including the chief executive at the time, Henry Sweetbaum.
CORPORATE BACKGROUND: Bill Grimsey was appointed to the board as chief executive in November 1996. He has 27 years' experience, mostly in food retailing and he held a senior position at Tesco.
For five years he was managing director of Park `N' Shop, based in Hong Kong, the leading supermarket chain in south-east Asia.
Mr Grimsey joined Wickes in 1995, "intrigued by the formula", responsible for the group's South African joint venture, and was appointed managing director of Wickes Building Supplies on 1 July 1996.
STRATEGY: boost margins by increasing the customer and product base. Wickes customers tend to be do-it-yourself buffs and small jobbing builders. They spend only a third of their total DIY expenditure in Wickes, a proportion the company is keen to increase.
Mr Grimsey wants to keep existing customers and he hopes to attract new ones through broadening the product range in paint and wallpapers.
The six new-format stores, with the wider product range, reported sales growth of about 20 per cent in 1998. A further 35 stores will be updated in the current year at a cost of pounds 23m.
By 2001, all 124 stores in the existing group will have been refurbished. Ten new stores are expected to open each year for the next three to four years. Mr Grimsey rejects suggestions of saturation in the DIY market, identifying geographic gaps in the store network.
During 1998, customer service improvements were made and pounds 16.5m was spent on two new distribution centres. The strategic plan is "on track". Overall, Mr Grimsey says, it is "a tough old job but it's exciting and rewarding".
MANAGEMENT STYLE: open and very much hands-on. Mr Grimsey is at home on the shopfloor and is keen to hear the views of staff.
Every month he has breakfast with 12 of his non-management colleagues, such as fork-lift truck drivers and cashiers, and reports back to an operating board. He believes chain store retail companies should have a culture where everyone is aligned to achieving the business goals.
That entails "open communication, encouraging and rewarding staff". This, he says, produces a "dynamic environment" and "is a very powerful mechanism for pulling in the same direction".
Most admires in business: Lord MacLaurin of Knebworth, former chairman and chief executive at Tesco.
CITY VERDICT: Mr Grimsey is described as "fantastically hard-working and enthusiastic". In terms of motivating staff and cutting costs he is said to have done "an excellent job".
But there is a limit on how much further costs can be cut. There is some concern that Wickes will struggle to increase market share profitably against stiff competition from B&Q and Sainsbury's Homebase.
Mr Grimsey remains confident that market share gains will be achieved from a combination of new store openings and refurbishments.
"Every five years you have to refresh the offer in line with changing consumer demands," he says. "I'm a merchant at heart. I am passionate about customers and understanding them."
The heavy store investment programme will inhibit profit growth this year but thereafter Mr Grimsey expects "very exciting profit growth".
Warburg Dillon Read, the company broker, forecasts pre-tax profits of pounds 31m for 2000.
In 1998, Wickes made profits of pounds 24.9m pre-tax compared with a previous loss of pounds 6.5m. The shares are expected to perform in line with the market.
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