29 Sep 2020 Top 100
Any description of the business products sector in 2020 would contain the words ‘challenging’ and ‘unprecedented’. However, ‘agile’ and ‘resilient’ also spring to mind as many players have adapted their businesses to cope with the havoc wreaked by COVID-19. The crème de la crème of our sector has not only been resolute in the face of adversity, but has grasped new opportunities and, in some cases, even thrived, as the OPI editorial team found out.
This time last year, few would have predicted that a global pandemic would strangle supply chains and lead to lockdowns that have kept millions of people away from their places of work and learning.
The impact on the business products industry – like many others – has been profound.Demand for traditional products has fallen off a cliff almost overnight, retail stores were forced to shut and offices around the world remain devoid of staff.
There were suggestions that 2019 was a ‘pivotal’ year for the business supplies sector – especially in the US. Surely, the same and more can be said for 2020, although this time it’s more a case of external circumstances dictating developments, rather than internal initiatives driving our industry proactively from within.
No doubt, existing strong trends such as core product declines, e-commerce growth, digitisation and consolidation have accelerated. But also – and this is clearly evident in this Health & Hygiene Special Issue of OPI – slow-burning ones such as homeworking, the hybrid workplace and the need to supply PPE have exploded.
Yet, despite all the turmoil, it’s largely a matter of ‘steady as she goes’ in this year’s OPI Top 100 list of global resellers. In 2019, there were a record 19 new entries; the year before 15. In 2020, there are just seven – with three of those coming from the Australasia region (including the as-yet-unnamed successor to Gavin Ward at dealer group Office Brands).
Does that mean all is well and we can rest on our laurels and celebrate the stability of the OP industry? Definitely not.
The true impact of COVID-19 has yet to be felt; things will become clearer as government-backed furlough schemes and other financial measures come to an end. Already, many firms are announcing permanent layoffs – some of them involving thousands of employees – and the short-term economic outlook is bleak.
Will all companies survive? Unlikely. The above factors will no doubt lead to further consolidation, quite possibly involving some of the names on the Top 100 list.
From the full list, we have selected a number of people from different geographies who we felt were worthy of special mention this year (that’s not to say the others aren’t, but we can’t highlight them all). A familiar face among these is Mike Maggio, who also featured in 2019 in his role of CEO at Independent Suppliers Group in the US. Kudos to him and Yancey Jones Sr for pulling off the transaction of the year so far in acquiring wholesaler S.P. Richards.
Others, such as Steve Haworth, Danièle Kapel-Marcovici, Richard Scharmann and Joe Taylor, have all been involved in major acquisitions in their respective markets over the past 12 months and have set their businesses on course for a successful future post-COVID-19.
The Top 100 is an evolving – and fiercely debated – beast, now more than ever. The 20th edition next year could look very different.
Richard Scharmann, CEO, PBS Holding
Pan-European multichannel operator PBS Holding had a record-breaking year in 2019, racking up sales of €342 million ($404 million) versus €270 million in the previous 12 months. While much of that growth was due to the acquisition of Office Depot’s Central Europe (CE) operations in late 2019, there was still low single-digit organic growth.
In particular, businesses in Poland and Hungary grew nicely while the launch of the Desktoo wholesaling operation in Italy added around €7 million to the top line. EBIT and EBITDA were also at record levels, despite the start-up costs in Italy.
The group’s performance in 2020 is proving to be more resilient than first expected when the seriousness of the coronavirus crisis became apparent in March. CEO Richard Scharmann had initially forecast a 20% dent in full-year sales, but has since revised this to 10%. Desktoo has been performing ahead of expectations and is set to triple revenues year on year, the back-to-school season in Germany is on a par with 2019, and sales of PPE products have helped offset declines in traditional categories.
Like many business leaders, Scharmann has been focusing on managing cash flow and this is, in fact, up in 2020 versus last year. Tax payment holidays, government subsidies and a pull-back on investments have all contributed to PBS maintaining its sound financial position. The CEO believes that not all market players are on such a solid footing, and expects M&A opportunities to increase in the coming months.
In terms of PBS’ projects, the success of the wholesaling business in Italy has triggered the search for larger premises – with a likely move in mid-2021. Its strategy for the CE region, meanwhile, will need to be finalised when the rights to use the Office Depot name expire at the end of next year.