Focus

SPICERS is BACK

Two years after Spicers went out of business, the name has been revived in the UK. OPI’s Andy Braithwaite gauges reaction...

Arguably one of the biggest industry stories of 2020 was the demise of the Spicers OfficeTeam (SPOT) group after it was put into administration by its owner, Better Capital. Several SPOT entities, such as OfficeTeam, Spicers Ireland and ZenOffice, were subsequently acquired by Ireland-based group Paragon, which led to the establishment of the OT Group.

Assets also included the 5 Star brand and various Spicers trademarks and intellectual property. The latter clearly gave OT Group the option of, at some stage, using the iconic Spicers name for its own wholesaling business, which has been operating as OT Wholesale.

BRAND EQUITY

This is exactly what happened on 13 July, when OT Group announced OT Wholesale had been rebranded as Spicers. It said extensive research was carried out before the relaunch, concluding that the Spicers name and heritage are still cherished, despite the issues towards the end of its Better Capital ownership.

The debts SPOT (and, in particular, Spicers) left behind still rankle with some vendors. One leading supplier – that wishes to remain anonymous – questions the need for an extra player in the wholesaling sector and asks whether there is enough ‘profit room’ for another one given the size of the dealer channel compared with four years ago.

Others are more optimistic. Mark Wilkinson, Regional VP UK & Ireland at ACCO Brands EMEA, says he is “pleased” Paragon is showing its commitment to the wholesaler/ dealer channel. “I see this as a positive development for the market,” he notes.

“Our view has always been that we want to see more customers, not fewer, as it gives more balance to the market for dealers and vendors alike. Choice and competition keep all of us on our toes and I am sure we all want to see a vibrant and healthy supply chain for the dealer channel, so it has a chance to evolve and compete long into the future.”

At Avery UK, Head of Sales Shaun Tidman agrees that, although the move could be seen as “controversial”, dealers overall “seem pleased” to have this historic name back.

“I hope Spicers can create a streamlined process to enable its customers and manufacturers such as ourselves to work closer together to provide products and solutions to the industry,” he states.

INDUSTRY DYNAMICS

On the reseller side, Tim Beaumont, Managing Director at dealer group Nemo Office Club, describes the rebirth of Spicers as “excellent news”. He comments: “The dynamics of the industry could do with a change [and] we are very hopeful that Spicers will get it right and be a force to be reckoned with.”

Adam Noble, Chief Commercial Officer at leading UK dealer Complete, also says the news was “very positive”. However, he cautions that the name change will be “irrelevant” unless Spicers proves capable of building a wholesale business which “gives dealers the service and products at the right costs, delivered at the right time”.

We all want to see a vibrant and healthy supply chain for the dealer channel, so it has a chance to evolve

Noble advises Spicers to take inspiration from its business strategy in the 1990s. “The wholesaler was innovative with the services it developed for dealers, and advanced their ambitions, competitiveness and reach,” he notes. “If it can replicate this, then it will be a huge boost for the dealer community.”

WORDS OF ADVICE

Advantia was one of two UK dealer groups closely aligned with Spicers, which have subsequently partnered with Exertis. Advantia’s Managing Director Steve Carter is hopeful that OT Group’s move could be a positive development.

“I say ‘could’ because I believe that both Spicers and VOW need to make changes in the way they work with their customer base,” he states. “Maybe they could start by taking a leaf out of the Exertis book.”

He continues: “There are reasons why the original Spicers is no longer here, and the ‘new’ Spicers needs to learn from those. Firstly, overheads should be kept firmly under control, something that, in my opinion, was not managed very well previously. It then has to engage and listen to the people at the coal face, ie the dealers and dealer groups, and work in collaboration for the good of all.”

Former SPOT Group CEO Jeff Whiteway, meanwhile, believes the return of the Spicers name was “an obvious thing to do”. He says it affirms OT Group’s intention to make its wholesale arm less of a “bolt-on” to the OfficeTeam business, something which may “clash with many OP dealers”.

He adds that the demise of Spicers left VOW in a “too dominant position” which enabled it to stop its “costly” overnight key drop deliveries. “This, and a stretching of margins, has undoubtedly had a negative impact on dealers that, for years, were encouraged to go stockless, making them ever more reliant on the wholesalers.”

Whiteway asserts an additional, focused wholesaler can “only be a good thing”, but warns against the over-servicing of dealers. “Product range is going to be key, as is reliability of delivery. The historic 13,000 wholesale stock lines need to reduce; around 8,000 seems a good compromise between servicing a dealer’s needs and SKU stock turn for the wholesaler.”

REDEFINED PROPOSITION

The question is, of course: is the rebranding of OT Wholesale to Spicers more than a name change? Absolutely, according to OT Group CEO Andrew Jones.

“Our redefined Spicers proposition centres around the customer experience: getting the right products, at the right price and delivered on time, which really is what a wholesaler should be focusing on,” he says.

Jones points to a more straightforward and transactional model which “strips away any costs that are deemed unnecessary or of little value to a dealer”. This will enable Spicers to provide “a low-cost model, without the need for complex agreements and additional marketing costs”.

He adds: “The lines between wholesalers and dealer groups have become very blurred, with wholesalers competing with dealer groups to sell a variety of publications and ‘value-add’ marketing services. Our model is clear: we will focus on product, price and service, and work with any group that wishes to engage with us to help dealers grow their business.”

Investments in digital transformation should make the wholesaler easier to do business with and a new ERP system is due to go live later this year. This will also benefit delivery options through Spicers’ distribution partner Menzies, with the introduction of a fully integrated transport management system that will allow options such as desktop deliveries.

An area Jones sees as “key” to the mutual success of Spicers as well as its customers is enabling dealers and data to shape the wholesaler’s product range. The plan is to develop an extended range which offers “most of the things any dealer would want” without Spicers having to stock every line.

This is where OT Group’s SmartPad online platform comes in. The goal in the near term is to provide dealers with access to more than one million products – with an overall target of three million by the end of 2023.

OT Group is certainly making all the right noises about the ‘new’ Spicers. Dealers and suppliers will have a chance to see and hear for themselves at several open days planned in the near future at the company’s Ashton-under-Lyne HQ near Manchester.

For now, the initial impression is that there is a lot more to OT Group’s wholesaling proposition than just a return to the Spicers of old. And that must surely be a positive development for the market as a whole.

Andrew Jones

Our model is clear: we will focus on product, price and service, and work with any [dealer] group that wishes to engage with us to help dealers grow their business

For more details about the Spicers relaunch, read a Q&A with Andrew Jones in the Xtra content in the September issue on opi.net