Weather Afternoon: 9°c Sunny spells Tonight: 5°c Partly Cloudy Night

Business

Boots
Change of Boots: the famous brand now in hands of private equity investors

Boots' man on a mission may just be the real deal

Simon English
10 Jun 2008


If you are on the way to meet someone dubbed the Silver Fox, you have a certain expectation. Especially if that fox is an Italian private-equity billionaire who, in league with the notorious Kohlberg Kravis Roberts, recently took Boots, one of Britain's best-loved companies, away from the spotlight of the stock market so that he can do with it as he pleases.

Yet the man who greets me is a thoughtful academic who wants to know what I think first, before answering carefully, mostly with his eyes shut, as if the dark helps him be considerate. The words leaving Stefano Pessina's mouth - care, duty, respect - don't belong to a cartoon-baddie tycoon. He has a slight lisp, as a 66-year-old physicist might, which suggests an air of vulnerability, as if he'd be upset if you took against him.

If this is an act - if in truth, he really is Blofeld - it is all highly convincing. I've met slash-and-burn merchants, and none of them is like Pessina. The Italian talks about Boots as if it were a person to be nurtured. Companies, he says, "have a life independent of their ownership".

He blasts previous management for what he calls the "strange adventures" that took Boots away from what it should be - a chemist we trust with our health.

Pessina came to England as a 16-year old, and claims to have noted even then that Boots was special, though the management didn't know it.

"The people who were in charge forgot the original message of Jesse Boot. They neglected the pharmacy," he says. He talks of restoring the staff 's self-confidence, and says it would be "suicide" to move the base from the Nottingham heartland.

Profits are up, but that's because "we have been more careful, we have bought better", not because customers are overpaying.

Pessina's mission is to turn the company into a global healthcare giant, to stop it being regarded as a mere retailer. Boots will do everything in medicine, from caring for the terminally ill downwards, while continuing to cater for, as he discreetly puts it, "ladies who desire to be more beautiful".

If you want to get angry about Pessina's wealth (about £1.5 billion) knock yourself out, but as billionaires go he's remarkably low key and - this is rare - still open to the notion that he might be wrong.

He's modest too, and it doesn't seem false. Asked what should be done about the economy, most business leaders would reel off a roster of self-serving policies. Pessina prefers: "Don't ask me, I'm just an entrepreneur."

That said, he thinks there is trouble ahead, and that interest rates will have to rise. Boots staff at least can be reassured that he intends to employ more rather than fewer of them.

"There will be a slow economy, but it will not affect us. We have momentum. We will be able to compensate," he says.

The question to ask any businessman with a High Street presence is what he is going to do about Tesco and its appetite to eat every lunch going. Usually you get a sharp intake of breath and a change of expression.

Pessina shrugs. "Tesco? They could be customers of ours. But that's it."

Before our interview, I asked one City banker, two City PR men, a union rep and one of his former colleagues for the goods on Pessina, for the one thing he wouldn't want to be asked. A tough crowd, they had nothing but praise.

It is too early to get carried away, but maybe Pessina is the real deal. Maybe he is the private-equity boss the industry has been waiting for.

Reader views (0)

 Add your view

No comments have so far been submitted.


Add your comment

 

Terms and conditions Make text area bigger You have  characters left.

We welcome your opinions. This is a public forum. Libellous and abusive comments are not allowed. Please read our House Rules.

For information about privacy and cookies please read our Privacy Policy.


 

 

  • Moody's threat to Europe's banks sparks fury in City Euro Moody's has sent shockwaves through the global banking system and sparked fury in the City, as the ratings agency threatened to slash the...
  • Bank's China bond call One of London's most senior bankers is calling on the government to issue a renminbi-denominated bond as part of a charm offensive to boost the capital's chances of becoming a key trading post for China's currency
  • Seven Olympus bosses held over £1bn fraud Olympus "After going to hell and back this is a day to remember," said fired Olympus boss and whistle-blower Michael Woodford after seven executives...
  • Spain pays for rating cut Struggling Spain has managed to prise another €4 billion (£3.3 billion) from jittery bond markets today but was forced to pay more for the privilege
  • Kingfisher bonus time as targets are smashed B&Q Ian Cheshire, B&Q owner Kingfisher's chief executive, and his top team are set for bumper payouts after smashing its bonus scheme's targets
  • Greek impasse hits euro Greek protests European stock markets were jittery and the euro has dropped to its lowest level in four weeks as the brinksmanship between Greece and its...
  • PPR thrives as luxury brands remain strong Add £1000 python skin Gucci handbags to the list of things that remain popular despite the economic gloom
  • BAE set to axe more jobs as profits go into retreat BAE BAE Systems has raised the prospect of further job cuts as Britain's biggest manufacturer announced a disappointing set of results for 2011...
  • Reed Elsevier sees growth despite tough economy Anglo-Dutch publishing and events group Reed Elsevier reported a rise in full year profit and said it expected to generate more revenue and profit growth in 2012
  • Frothy profits at Heineken Beer The economy might be in dire straits but Brits still love a pint down the pub
  •  
    Market Roundup
    WEDNESDAY UPDATE

    Barclaycard's exit leaves CPP with an identity crisis

    Bye bye Barclaycard. Nearly a year since the FSA started investigating CPP over its sales techniques, the identity theft protection firm touched a new, all-time low today after admitting it was losing one of its most high-profile clients

    More