Victory for retailers as Spar chair quits
· Citizen
In truth, Mike Bosman continuing in the position of chair of The Spar Group has been completely untenable for months.
Visit sportbet.rodeo for more information.
Bosman has been in the firing line of many of its retailers, who commit to a voluntary trading model under the Spar Guild, and this reached something of a breaking point in May. Members representing a majority then called on the board to request Bosman to resign.
Discontent among guild members had been brewing since the surprise resignation of previous CEO Angelo Swartz in February.
Swartz had been with the group for just short of two decades and had built up very strong relationships with many of its retailers, some of which own and operate large portfolios of stores.
The retailers have been upset with what they term a “period of decline”, and Swartz’s departure was the proverbial straw that broke the camel’s back.
This was exacerbated by the board’s decision to appoint previous financial director Reeza Isaacs as CEO when his relationships with the group’s retailers were arguably limited to non-existent. Isaacs correctly identified this disconnect, and the group then appointed Jerome Jacobs as managing director of its Southern African grocery and liquor business. Jacobs has 30 years’ experience in the group.
While this placated the retailers somewhat, the vitriol aimed at Bosman didn’t dissipate.
Some of this has its obvious origins in Bosman’s tenure as executive chair between January and October 2023, following the hasty departure of Brett Botten as CEO. While Bosman returned to a non-executive role after Swartz’s appointment, there are murmurs that he remained perhaps a tad more hands-on than a chair ordinarily would be.
Even in May, Bosman told Currency that he was keen to remain on the board for a further two years (the remainder of his term) and not only added that Spar needed to be “reinvented” but also that the guild system, which had become “unwieldy and disjointed”, had to be “updated”.
Tellingly, after that lengthy letter demanding Bosman’s resignation, the guild issued a 49-word statement “reaffirming” its support “for the voluntary trading model and their intention to work together in support of the business”.
The group shared this statement in a letter to its retailers: “The Spar Group and the retailers of the Guild of Southern Africa confirm their commitment to working together in support of the business. Both parties are focused on building confidence in Spar among retailers, employees, suppliers, customers and shareholders, and on giving the executive team the platform to deliver.”
Resignations highly unusual
It is highly unusual for a chair and deputy chair (previously lead independent director) to resign simultaneously and immediately.
There are reports that reference a statement from both former directors saying they had been “subjected to sustained personal attacks, hostility, and, at times, threats“.
“We fully accept that differences of opinion, robust debate and criticism are part of serving on the board of a major listed company. However, we believe there is a line between legitimate disagreement and conduct that ceases to reflect the respect, fairness and dignity with which people should treat one another.”
This, the two say, had made their continued involvement untenable.
Given the discontent among Spar’s retailer base – particularly in KwaZulu-Natal – one wonders to what extent this exit has been ‘engineered’ to give Isaacs (and CFO Megan Pydigadu) the headroom and time to execute their turnaround. In plain terms, the KZN region has been particularly impacted by retailers not ordering their supplies from Spar.
The Spar Group’s letter to retail partners speaks volumes.
It says it recognises “that the recent period has not been easy for many of you”.
“Through our engagements, we have heard your concerns and, most importantly, your call for meaningful and urgent action. We understand the need to move with greater pace and purpose.
“Your success is our success. Restoring retailer profitability, strengthening our partnership and delivering tangible value to your stores are at the heart of our turnaround,” it says.
“Our immediate priorities are practical and directly focused on strengthening your businesses. They include stronger procurement and sharper pricing; more effective brand and marketing support; improved wholesale and distribution execution; greater support to help retailers manage costs and improve profitability; and continued development of Spar’s retail technology, digital and convenience capabilities.
“We recognise that rebuilding confidence will take more than words. It will require consistent delivery, open engagement and visible progress. We will continue listening to you and working alongside you to address the issues that matter most to your businesses.”
Where the real power lies
There are far more hints at ‘harmony’ in this letter than in many other communications from the group to its retailers.
It was either Isaacs or Jacobs who read the room after many, many engagements with its retailers. Perhaps it’s dawning on the group that the real power lies in the ‘voluntary’ guild itself.
Keep the majority of your store-owners happy, and you win.
The grand irony is that Bosman was appointed chair-elect very late in 2022 to lead the group through a governance crisis (which extended far beyond concerns over Graham O’Connor’s role as chair, given that he had previously been CEO).
During this time, practically the entire board was refreshed, with the only two directors remaining from before Bosman’s appointment being Sundeep Naran and Lwazi Koyana. The latter, being the longest tenured, has been appointed interim chair.
There is now a race to make further appointments, particularly for a chair with retail experience.
This article was republished from Moneyweb. Read the original here.