It is almost three months since Andy Hornby quit as Group CEO of Alliance Boots due to the stress of the corporate world.
At the British Retail Consortium Retail Symposium this week the retailer’s CEO of Health & Beauty Alex Gourlay did a good impression of a leader-in-waiting with his speech on how to meet the future expectations of customers.
Addressing industry delegates, sandwiched in between speeches from Business Secretary Vince Cable and Asda CEO & President Andy Clarke, he adequately filled the shoes recently vacated by Hornby – but would he want the Group CEO role full-time?
“I’m still working very hard to run what is a big division of Alliance Boots,” he tells Retail Gazette.
“I’ve got my hands full right now and I’m more than content with my current challenge. Since Andy left my role has changed slightly, but not significantly.”
Whether Group CEO is a realistic employment prospect for Gourlay or not - and he admits he does not know if he is being considered for the position - assuming the top job at Boots would cap what has been an incredible rise through the ranks of the company.
He is a self-proclaimed “Boots lifer”, having started his career with the retailer as a 16-year-old behind the pharmacy counter, working his way up to the board position he now holds.
In between he has held various store management and head office roles, but it was when private equity group KKR acquired the retailer in 2007 that he was elevated to the upper echelons of the Boots hierarchy, from Managing Director to the newly established CEO of Health & Beauty position.
“My career path has seen me go through the organisation and I’ve been given a fantastic opportunity by Executive Chairman Stefano Pessina to develop my own division,” he notes.
“Fundamentally nothing has changed since Andy left in March because the individual businesses within the group were already standalone - our roles were all very well defined before his departure.”
Along with Gourlay, Financial Director George Fairweather and CEO of the Pharmaceutical Wholesale Division Ornella Barra would be among the obvious internal frontrunners to become Hornby’s replacement, and together they have overseen another strong year of trading at Boots.
Alliance Boots reported double digit growth in profits for the 12 months to March 31st 2011, with trading profit up 14.2 per cent year-on-year to £1.3 billion fuelled by major growth in the company’s wholesale division.
The group’s British health & beauty retail arm, Boots UK, increased its like-for-like (LFL) dispensing volume by 3.6 per cent and saw LFL retail revenue inclusive of VAT edge up 1.2 per cent over the same period.
“The core reason for our success is that we are more than just a high street retailer,” Gourlay argues.
“We’re a pharmaceutical and health & beauty specialist with strong brand manufacturing, and we’ve moved successfully into multichannel - both in terms of providing information and selling products.”
Boots has been the number one health & beauty retailer in the UK for some time now, which has made it difficult for companies of a similar nature to build their reputation across the country.
Superdrug for one, which has for years portrayed itself as the value retailer in the sector, is going through a rebranding process in 2011 which includes the roll-out of new look stores and the launch of its first ever loyalty card, which offers the Boots Advantage card some long-awaited competition.
Gourlay does not appear to be afraid of the opposition, and confidently bats away any suggestion that Superdrug’s rise to prominence as a modern and refreshed retailer is having an impact on trading at Boots.
“We’ve been using our Advantage card for ten years now so we have learned the tricks of the trade,” he said.
“If we were worried about Superdrug we’d be doing a lot more about it.”
Gourlay respects the “energy” Superdrug is showing at present, but finds it surprising that its rival is reducing items in stores when his research actually tells him that health & beauty customers want more choice and increased care.
“They know their strategy and I’m not telling them what to do – I just see the disconnection between what they are saying and what they are doing.”
In contradiction to the views expressed by Superdrug Commercial Director Steve Jebson in a Retail Gazette interview last month, Gourlay continues: “We think health & beauty is about treat, emotion and reward for loyalty – there’s is more about discount.
“That doesn’t fit strategically with where they are trying to go with their new brand.”
Gourlay admits that the current retail landscape in the UK is tough, but suggests trading since the start of its new financial year from April has been of a similar level to the previous 12 months.
The year ahead will see the company focus on improving customer care through the development of its staff, boosting loyalty via initiatives involving the Advantage card and affiliates, and further strengthening of its ties with healthcare partners. Additionally, more Boots outlets will appear in doctor surgeries as the year progresses.
The Health & Beauty CEO is not ruling out future partnerships with other retailers either, following the successful trial that has seen Waitrose products sold in Boots and vice-versa.
“Why not have more of these relationships? Boots is effectively a house of brands,” he states.
“Partnerships with Waitrose and the like are ways of giving customers access to the best brands around.”
But the question the retail world wants answered is who will be the new man or woman to provide the link between Boots’ owners and executives - the one responsible for overseeing the business’s ambitious growth plans?
Pessina and the Boots management team keep telling us that Hornby’s replacement will be named “in due course”. Gourlay’s extensive experience of the business and strong working relationship with the Chairman surely make him a strong candidate to fill the gap.