The fifth emergency service
The managing director of Darty’s Italian business resigned just as negotiations to sell it had begun. The UK head office called in Impact Executives interim managing director Jimmy Clarini to pick up the pieces.
In 2012 Darty Group, the electrical retailer, decided to withdraw from the Italian market. Sales and margins were falling in retail businesses because of the growth of ecommerce, and the disposable income of Italian consumers had fallen. Rather than closing everything, which would have a big social impact (450 employees would lose their jobs), Darty decided to sell its 20 Italian stores to a competitor.
The job was very much to establish command and control at the Italian head office
It started negotiations with Italian electrical retailer DPS Group, but then the managing director left, plunging the sale into confusion and doubt.
Simon Enoch, company secretary of Darty Group plc, recalls: “We needed a strong leader for the business. I asked Impact Executives if they could find me an interim managing director for an electrical retail chain in Italy that was going through a critical sale process, and they quickly came up with the goods. That’s pretty impressive for a UK-based company.”
The ‘goods’ was Jimmy Clarini, an Italian who combines a strong financial orientation with extensive experience of management, entrepreneurship and turning around troubled companies.
“He had a background in electrical retailing, was adept at handling union negotiations, spoke good English and was used to operating at director level,” says Simon. “What’s more, he was available pretty quickly, which was very important as we needed to sustain the momentum of the sale process.”
He continues: “The job was very much to establish command and control at the Italian head office. Jimmy had to get the team on side, but at the same time make them realise there was a job to be done – not least to keep the stores going. It’s a pretty lonely job at the beginning – you won’t be loved by anyone. But he was quickly able to get the team working again.”
When Jimmy joined, the head office team was demoralised and disengaged.
He recalls: “I needed to take quick, urgent, dynamic actions to keep the situation under control, normalise as far as possible what was an extraordinary period and reduce the economic impacts of the sale process. What’s more, the teams needed considerable emotional and professional support, so I needed to be a good psychologist – and that was a matter of knowing when to use the carrot and when the stick.”
Jimmy adds: “In this sort of critical situation you need an external person who lacks the heritage of years with the company and can start without emotions. On the other hand, because people don’t know you it takes a while for them to appreciate you – and because you don’t know them it takes a while for you to learn who you can trust.”
He set objectives, kept them alive with reports and meetings, and this, he says, “created a rhythm to keep people working well.” And while people also understood that it was in their own interests to co-operate, “I spent a lot of time encouraging the leadership team in the Group to be as open as possible in order to keep people motivated.”
One task was to challenge some of the management mind-sets among the Italian head office team.
“For example,” he says, “we had a situation with our main warehouse at the end of November. It belonged to a supplier who was going into liquidation, and they owed tax and weren’t able to pay their employees. Strikes blocked trucks going in and leaving, which was a big threat to our supply chain – especially as the warehouse held all the products for our December sale.
“The problems were entirely unrelated to Darty and to our sale to DPS, but it was a very high risk situation. I spoke to the managers to see if they had a solution, and they didn’t. So I said ‘let’s move to another warehouse and we’ll transfer everything across in one or two weeks’. They said that was ‘impossible’. I told them that I wanted them to come up with some solutions later that day. And they did. In two days we had a contract with a new supplier and a new warehouse and started getting new products and trucks in action.”
Jimmy allowed us to exit from Italy in an orderly fashion
This was typical, says Jimmy. “I was constantly pointing out risks and opportunities to them. For example, they said it would take at least a month to introduce new IT systems. So I said ‘let’s do it on paper then’. That got us over the short-term problem.”
During his five-month assignment he worked intensively, but his job was made easier, he says, by his knowledge of the sector – including key suppliers – and his experience of union negotiation.
“But for me, success wasn’t just about selling the business for a good price. I also wanted to ensure that the buyer quickly integrated the stores, and I put in a lot of effort to ensure that the 300 people working in those stores could safely transfer to DPS,” he says.
Jimmy’s task was “multidisciplinary and multidimensional,” says Simon, “and it was the combination of issues that added up to the challenge. It wasn’t a normal merger and acquisition process: the purchaser was a relatively small family-owned business, which had different requirements from those typical of a more normal acquisition. He played a key role in closing the deal.”
Nothing threw him though, adds Simon. “Jimmy is good at practical problem-solving, he has lots of expertise and, crucially, he’d done it all before. In the space of a few short months he allowed us to sell the business – and without his input we couldn’t have done that. He allowed us to exit from Italy in an orderly fashion.”