When Robert Sawyer stepped out of the shadows of Metro Inc. to take charge of Rona Inc., the second-in-command was little known in the Montreal business community.
But in the grocery world, he is something of a rock star.
Information about Rona’s president and CEO is hard to come by. Mainstream publications had never featured the 60-year-old executive who, in keeping with the tradition at Metro, his employer of 34 years, stayed out of the public eye.
But this low profile will be difficult to maintain at Rona, which American retailer Lowe’s Cos. Inc. targeted in 2012 with an $1.8-billion unsolicited proposal. Since he started in April, Mr. Sawyer has been thrust into the limelight as he tries to fix the embattled hardware retailer and distributor.
Mr. Sawyer, who is credited with turning around Metro’s Ontario operations in 2007, has wasted little time at Rona.
He closed unprofitable stores, shuffled the executive team, sold the company’s professional business unit, and downsized the head office. Hundreds of employees were laid off in the process.
Rona’s annual costs savings have reached $63-million, but Mr. Sawyer wants to get a little closer to his $110-million target before giving formal interviews.
Former colleagues and acquaintances describe him as a hands-on operator who just gets things done. “With him, you always know where you are headed. There are no grey zones: It’s either white or it’s black,” says Christian Bourbonnière, Metro’s first vice-president, Quebec division. “He is demanding to the extreme.”
Mr. Sawyer is known to burst out in anger and swear when he uncovers an unacceptable situation, though he is careful not to hurt anyone’s feelings and rarely holds a grudge.
“He is a team player who surrounds himself with top performers,” says another former Metro colleague.
“He will go to bat for his team. And they will die fighting for him,” the former colleague says. “He is not the type of guy who sits at his desk and looks at the numbers. He visits the stores and the warehouses, and he can spot problems even seasoned retailers will miss.”
Mr. Sawyer seemed destined for a career in retail. At 14, he delivered beer and groceries on his bike for a corner store in Montreal, where he grew up.
Unlike his Metro colleagues who studied at Harvard or Cornell, Mr. Sawyer never attended university. He started working for Steinberg’s catalogue distribution business at age 16, and by 19, he was foreman of one of its warehouses. He moved on to Metro in 1979, as director of a fruit and vegetable warehouse, and rose through the ranks of the Montreal-based grocer.
Mr. Sawyer speaks the language of the store operator, and yet he had a run-in with Rona’s dealer-owners at the end of the summer. Those store owners are upset over the high price of the merchandise sold to them by an “inefficient” Rona, which has reduced their profit margins to a sliver. The dispute surfaced as some merchants threatened to leave Rona.
“We feel they are more attentive to us now, but the message has yet to go all the way down the pyramid,” says Martin Lacasse, president of the Rona Merchants Association, which represents 300 store dealers.
“This is a huge ship to turn around, but we are giving the new management the benefit of the doubt,” adds Mr. Lacasse, who owns three Rona stores.
Also backing off a little is an investor community that was frustrated with Rona’s performance after a string of acquisitions by predecessor Robert Dutton left the retailer in disarray.
“Even if Robert (Sawyer) would probably like things to move faster, you can’t change such a big organization overnight,” says François Lebel, senior analyst, consumer products, at the Caisse de dépôt et placement du Québec, which is Rona’s biggest shareholder with close to 15 per cent of its common shares.
“He is the right man to unlock value,” says Anthony Zicha, analyst at Scotia Capital, who believes Rona will surprise once top-line growth returns.
But the slowdown in construction and renovation is throwing a wrench in the turnaround effort. Since 2010, housing starts have been falling steadily in Quebec, Rona’s biggest market. From January to November, they are down 22 per cent compared with 2012, according to the Institut de la Statistique du Québec.
In November, Rona disappointed investors once more with lower-than-expected profits and same-store sales that fell for the 13th quarter in a row.
Mr. Zicha believes there is a lot of pent-up demand in home improvement, and once hammers resonate louder, possibly in 2015, Rona will reap the benefits. When it comes to home repairs, he says, “You can only delay so much.”
Rona’s board, for one, certainly hopes so. Because if results don’t start to show, the discreet Mr. Sawyer will get a whole lot more of attention – of the unwanted kind.Report Typo/Error