Mike Gentile BIG INTERVIEW
SPR is exploring other types of programmes and synergies which, hopefully, dealers will be able to evaluate soon. All told, I would much rather have a duopoly in our industry, with wholesaler choices, than a monopoly, particularly if it is a monopoly owned by our members’ largest competitor.
I would much rather have a duopoly in our industry, with wholesaler choices OPI: That aside, what are your other high-priority objectives right now? MG: We want to collaborate more with others in our industry – DCPG, AOPD and Office Partners – as well as adjacent category buying groups and associations. Again, it’s a case of getting the right people together and ascertaining what we can collectively do for the benefit of all of our members.
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OPI: Before we talk some more about the generic industry landscape, I just wanted to ask you about Industry Week in November. How are plans shaping up for that? MG: Our registrations are ahead of schedule. We’ve developed seminar content based on feedback from our members. And, as you know better than anyone, we’re going to have a general session hosted by a certain Steve Hilleard. People will be on the edge of their seats. Seriously though, we’re encouraged for now and are praying that COVID will not throw a monkey-wrench in the works and stop us from moving forward as aggressively as we would like to. There’s so much we have to do with our membership that is difficult to do in any other format than a live, in-person annual meeting.
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OPI: I’m looking forward to it and very much hoping that your government will let me in. Let’s talk about the industry landscape and stick with the wholesalers for a moment. How have they performed throughout COVID? MG: First up, huge credit to Yancey Jones Sr and Mike Maggio for acquiring SPR during a pandemic and then managing it through a very difficult time. Both wholesalers have been constrained with supply chain issues, particularly with imports – it’s affected their service levels and line fill and consequently our members. As regards Essendant, some would say the acquisition by Staples’ owner Sycamore Partners has not yet delivered on many of the promises made. Part of that is obviously COVID related and Essendant is trying to resolve it. The wholesaler has implemented the ECP as we discussed earlier, and our members are taking advantage of it.
OPI: What’s your view on the ongoing discussions between Office Depot and Staples? MG: We now have enough pieces of the puzzle to kind of know what the final picture will look like. This would most likely be Sycamore being successful in acquiring Depot’s retail operations and integrating them into its fold. ODP will become a B2B distributor only, a standalone public entity. I used to work for a company – Boise Cascade Office Products – that was strictly B2B, so it feels like going back in time. OPI: Boise had a wholesale business as well at one point in its history. MG: And we divested it and became strictly B2B. When you strip out all the retail SG&A expenses, you can operate more efficiently and be more strategically focused. ODP will probably want to go in that direction and invest more into the procure-to-pay technology platform managed by some very talented people like Prentis Wilson. It’s a different B2B sales cycle, but worth exploring, and the company could come out of this more focused than it is right now. OPI: This platform – Varis – has not really been spoken about much yet, but as you say, Prentis and some other well-paid individuals have joined the team there. MG: It’s interesting. When I was at Boise, we were ahead of our time in terms of what we wanted to do – have an integrated supplier portal – but the technology did not exist, just the stagnant traditional ERP platforms. Going to enterprise accounts with a total ERP procurement system which reduces the number of vendors you do business with streamlines your processes, decreases your procurement costs, and lowers your overall cost of goods. The technology exists today and what Varis is hoping to do is integrate it into its enterprise system. It is all about execution. It might be a strategic opportunity for Depot. The greatest competitive threat is within the Fortune 100 space which many ISG members don’t play in. But there could potentially be synergies for some dealers to collaborate with Varis. OPI: To what extent are Depot’s and Staples’ interests in dealers – let’s just call it their federation strategies – a concern for you? MG: We’re not going to be able to prevent people that own dealerships from exploring options for themselves and their families, be that for succession reasons or because of balance sheet challenges. What we can do as a member-owned cooperative is to increase the services and value we provide.
