If Robert Bulluss had known what he was getting into when he accepted the role of CFO for Coventry Group in 2016, he admits he’d have likely walked away.
“When all the original family members left the business 16 years ago, the business went into decline. There were a number of different CEOs who made decisions that weren’t in the best interest of the company,” Bulluss explains.
“When I arrived, it was in poor shape and pretty much maxed out from a debt perspective. If I’d been aware of how poor the financial situation was, I probably wouldn’t have joined.”
“If I’d been aware of how poor the financial situation was, I probably wouldn’t have joined.”
The century-old industrial product distribution company had gone from US$339 million in annual sales at its peak to a mere US$102 million and was losing about US$677,000 per month.
From 2,000 employees across Australia and New Zealand, Coventry Group had shrunk to a team of 400.
Less than six months later, though, a golden opportunity presented itself to Bulluss. “The board decided they wanted to make a change and parted ways with the CEO that was there,” he says. “They asked me if I would sit in the role until they recruited someone and I accepted. Over the next couple of months, I built a strategy and presented it to them. They liked it and gave me the job.”
Leading the Recovery
Bulluss knew that the road to pulling Coventry out of the hole it was in would be a rocky one, but he’d previously helped turn around another floundering company and was confident his strategies would work. With several distribution divisions ranging from cabinet hardware and fastening systems to hydraulic and lubrication products, Coventry decided to sell, for a profit, a business and optimize the rest of its portfolio.
“We got a reasonable price for the division we sold and that bought us time to fix the rest of the business the right way. We did an assessment of the markets and found that they were very fragmented. There were a lot of smaller players, many of which had owners that were ageing,” Bulluss says.
“Our strategy was to fix up Coventry’s value proposition to make sure our customer service was better than our competitors’ so we could grow the business organically. We’ve been very successful in doing that.
“It was also to build on the first by acquiring highly profitable businesses that were well-run. We decided we wouldn’t buy anything that was broken, thinking we were clever enough to fix it. We completed six acquisitions, immediately added shareholder value and improved our profitability with minimal effort.”
To gain a further competitive advantage, Coventry Group is investing heavily in ecommerce platforms and an enterprise resource planning upgrade.
“We’re about 12 months into implementing Microsoft Dynamics 365 across three of the four business units we have,” Bulluss adds. “It’s a US$10.5 million investment and the implementation will run until the end of 2024. It will improve our customer-facing system, help us manage our stocking systems and give us productivity gains, which will help our overall profitability.”
However, Coventry’s bottom line is far from being, well, the bottom line. “When I joined, the company culture was very poor,” Bulluss admits.
“The business had very high employee turnover and low employee satisfaction numbers. We spent a lot of time working on that and fine-tuning our purpose, values and vision. Safety, fairness, integrity, respect and diversity in the workplace are all very important to us.
“I firmly believe that if you’re nice and respectful to people and you’re clear on what the strategy is, they’ll respond to that and deliver on what you need. It makes life a lot easier when you behave that way. It’s better for your own mental health and for your people as well.”
The final element of Coventry Group’s recipe for success is its strong relationships with its suppliers.
“Gone are the days where you beat suppliers up for better pricing and terms,” he says. “If we can work closely together, we’ll all get better outcomes. We have very solid relationships with long-standing suppliers including Brighton-Best International and Paramount Safety.”
“I firmly believe that if you’re nice and respectful to people and you’re clear on what the strategy is, they’ll respond to that and deliver on what you need.”
Brighton-Best International and Coventry Group share similar core business values and goals in supply performance, driven by an imbedded culture of integrity, explains Troy Enders, General Manager of Brighton-Best International, Australia.
“This business alignment encourages a working partnership where management teams and staff are empowered to consistently exceed customer expectations,” he tells The CEO Magazine.
Whatever Bulluss is doing, it’s certainly working. “Six years later, we’re back up to about US$244 million in sales with about US$12 million of profit,” he reveals. “We’re close to 1,000 employees again and we have four profitable growing divisions in the group. It’s been quite a transformation.”
Coventry Group was founded in 1929, incorporated in 1936 and listed on the Australian Securities Exchange in 1966.
Coventry Group has five divisions: Artia Cabinet Hardware Systems, Fluid Systems, Nubco, Konnect Fastening Systems Australia and Konnect Fastening Systems New Zealand.
Its industrial supply products include fastening systems, cabinet hardware systems, hydraulics, lubrications, fire suppression and refueling systems.