Sponsored by THE CLARITY SEARCH RETAIL LEADER OF THE YEAR Leading by example Stefano Pessina won the 2013 Clarity Search Retail Leader of the Year award. Tiffany Holland talks to the Alliance Boots executive chairman to find out why he’s ahead of the pack n first meeting, it’s easy Last year the self-made billionaire to guess that Stefano revealed that Alliance Boots would Pessina is an entrepre- be partnering with US drugstore Oneur. He wears the sort of chain Walgreens, which will even- sharp suits you’d expect of a billion- tually lead to a full merger. aire and his confident, composed It was one of the most remarkable air could calm any boardroom. business moves in years, as Alliance As the boss of Alliance Boots, Boots, which earned a trading profit one of the largest retailers in the UK of £1.2bn in the last financial year, and one of the biggest pharmaceuti- joined forces with Walgreens’ cal wholesalers in the world, he is empire of 8,000 stores. known for his serene demeanour – The US retailer generated an oper- something that was undoubtedly ating income of $3.5bn (£2.3bn) in useful last June when he brokered the same financial year. In June it the landmark retail deal of 2012. was revealed that Walgreens would But when Retail Week speaks to initially invest $6.7bn (£4.5bn) in him, the Italian businessman is in cash and stocks to acquire 45% high spirits, cracking jokes and equity in Alliance Boots, with a revelling in the recognition his view to merge within three years. work as a retailer has earned him – The deal was a prize Pessina that Alliance Boots boss Stefano Pessina has led countless deals not just in the UK but in the US as had been after for many years, and well, where he has won a similar he made no secret of the fact that he “For me, of course, it was even “It’s part of our culture.” For retail award. wanted to create a “truly global” more natural because I had thought Pessina, working with the right “I don’t even see myself as a company. Previously he had man- of an expansion into the West for people who are capable of sharing retailer,” Pessina says. “I like to aged to expand overseas by opening many, many years and I was always ideas is crucial. motivate people, to manage and do stores across Europe and the Far thinking of a partner. He says that over time, a partner- what is best for the company. I seize East – the company’s 200th store in “It is very difficult for a European ship between two companies will opportunities when they are there.” Thailand was opened last year. retailer to be successful in the US if create a unique culture that is an Pessina’s success highlights how But the Walgreens deal created you don’t have a local partner.” amalgamation of the businesses. “It wrong the sceptics were when a game-changing new future for Pessina’s empire has been built is something that has incorporated they expressed concerns regarding Alliance Boots. on mergers. After graduating in the two cultures, and this becomes his lack of retail knowledge in While the tie-up was big news for nuclear engineering as a young the identity of the new company. 2006, when he led a merger of the retail industry, Pessina is mod- man, he eventually joined his fami- “It takes years, but if you start on Alliance UniChem with Boots est. “It was a natural evolution of ly’s pharmaceutical wholesale busi- the right foot and if you are able to backed by private equity house what we were doing,” he says. ness and acquired a number of create this between the two top KKR. “They were forgetting that we “Walgreens was number one in small pharmaceutical companies to managements, afterwards it is very ran pharmacies for all of those America, it had to do something create Alleanza Farmaceutica in easy to cascade these down. At the years,” Pessina says. else [to grow] so I believe it was a 1977. After expanding the business end of the day, people follow your Alliance Boots operates 2,477 natural development. into several southern European example and understand the bene- stores across the UK, which proba- countries including France, Pessina fits of what you do.” bly means that he can now safely then decided to merge his business, Pessina puts a lot of the retailer’s class himself as a retailer. But it is “I SEIZE then called Alliance Santé, with success down to his team, using his another merger that has catapulted OPPORTUNITIES UK business UniChem in 1997. partnership strategy in these rela- Pessina into the truly global sphere WHEN THEY “Our first value is partnership, tionships too. Pessina picks out his and won him the Clarity Search ARE THERE” and remember the word ‘partner- right-hand colleagues – he says that Retail Leader of the Year accolade. Stefano Pessina, Alliance Boots ship’ is in our name,” Pessina says. the company’s health and beauty ➤ www.retail-week.com March 15, 2013 Retail Week 43 Sponsored by THE CLARITY SEARCH RETAIL LEADER OF THE YEAR An Alliance Healthcare distribution centre (above) and Boots store on London’s Oxford Street (right); the 71-year-old executive chairman (below) ➤ chief executive Alex Gourlay should be receiving the award instead of him, and describes Ornella Barra, chief executive of the pharmaceuti- cal wholesale division, as “the best wholesaler in the world”. Mean- while, he praises his group finance director, George Fairweather, whom he says “has protected me from making a lot of mistakes”. And Pessina’s business nous has ensured that he is one of the richest men on earth. According to Forbes, he is ranked as the 189th richest person in the world and is worth an estimated $6.4bn (£4.25bn). Pessina has a significant stake in Alliance Boots, and when the merger is com- pleted he will be the biggest share- to leave the table until an answer has holder in the entire business. His “WHEN YOU HAVE concluded the discussion. CLARITY SEARCH personal wealth nearly doubled as A BIG MERGER, YOU Although a self-confessed Clarity Search is an executive a result of the deal. HAVE THE CHANCE “happy” workaholic, Pessina search firm focused exclusively The merger with Walgreens TO REJUVENATE believes that he has been lucky in on the retail and consumer began, Pessina says, with the sort of THE COMPANIES” his career because he has been able sectors and dedicated to personal spark that has often Stefano Pessina, Alliance Boots to feed his passion for building com- identifying outstanding leaders marked his career. He first met Wal- panies. Without his business, he of today and tomorrow for its greens president and chief execu- Pessina speaks as though he would be bored, he says. retail clients – large and small, tive Gregory Wasson in New York a thrashed out the deal without “It’s very difficult to find some- public and private, UK-based few years ago in a small room above breaking a sweat, and no doubt his thing where you have such an and international. Outstanding one of its drugstores, which set the years of experience – he is now 71 intensity of life,” Pessina adds. leadership is the holy grail of ball rolling for one of the biggest – helped. “The fundamental princi- Nine months have now passed any retail business and deals in recent years. ples [of our strategy], even though since the Walgreens link-up was determines the difference The pair realised they had simi- organised in different ways and revealed, and the two companies between average and lar ambitions for their companies, presented in different ways, have have begun clocking up the air exceptional performance. and after further meetings con- always been the same,” he explains. miles across the Atlantic – and In fact, a great chief executive cluded a merger would help them “We have always been keen to Pessina will surely be in his ele- can add 15% to a company’s achieve their global dreams. grow, we have always been keen to ment leading Alliance Boots into its market value. The current Stefano says: “When you have a have an efficient company, we have new phase of growth. climate of uncertainty highlights big merger, you have a great oppor- always been very disciplined. We Despite his success, he has no the difference that clarity of tunity to rejuvenate the companies have never done acquisitions when plans to take his foot off the accel- vision and determination make – and give new life and enthusiasm to we didn’t have the right return. We erator, and will continue to look for whether deployed in securing the the people – provided that the set certain limits and certain tar- partners – in the past he has men- future of high street names or merger works. That’s where the con- gets.” It seems that when Pessina tioned South America and China. nurturing the growth of innovative cept of partnership works, which is wants something he gets it, striving It has already been quite a journey, new concepts. easy to say, but difficult to live if you to find solutions to issues at every and it looks as though Pessina has are not experienced.” turn. He explains that he doesn’t like not yet finished leading the way. 44 Retail Week March 15, 2013 www.retail-week.com.