Just as Chip Hornsby succeeded Charlie Banks as president/CEO of Ferguson in 2001, he has been named to succeed Banks in his role as group chief executive of its parent company, Wolseley plc, Reading, England, upon Banks' retirement July 31, 2006. Hornsby will become Wolseley's group chief executive effective Aug. 1, 2006, while continuing to live and work in the United States.
Earlier this year, Hornsby was named to the newly created position of chief executive of Wolseley North America, overseeing Ferguson, Newport News, Va.; Stock Building Supply, Raleigh, N.C.; and Wolseley Canada, Toronto, Canada, while also remaining president/CEO of Ferguson.
Effective immediately, John Stegeman has been named Ferguson's president/CEO. He had been named chief operating officer of Ferguson earlier this year to enable Hornsby to address his increased responsibilities.
Chip Hornsby, group chief executive designate, Wolseley plcChip Hornsby joined Ferguson 27 years ago. He started as a graduate trainee and moved into increasingly challenging positions over the years. When Ferguson's volume was just slightly above $1 billion, Hornsby was serving as senior vice president of branch operations. He became the wholesaler's fourth president/CEO in 2001.
Asked about his proudest accomplishments as president/CEO in a SUPPLY HOUSE TIMES interview earlier this year (June 2005, page 52), Hornsby replied, “The capabilities of our organization. Through our people we have been able to grow at a very rapid rate.” He stressed the importance of customer service.
Hornsby's successor as chief executive of Wolseley North America is expected to be named in early 2006.
“After the first of the calendar year we'll go through the interview process,” Hornsby said. The new head of Wolseley's North American operations will seek ways to capitalize on the strengths of the three separate entities and help them evolve into more of a single unit structure, he said.
“Between building materials and plumbing we have some very different business models,” Hornsby noted. “We want to better understand the different customers' needs and look at what we can do with logistics, training, recruitment, back office, financial reporting and health care.”
At the time of Hornsby's promotion to his current position, Charlie Banks issued a statement: “Wolseley has made enormous progress in developing the North American businesses over the past few years through acquisition and organic growth. We have a market-leading presence in our business areas, which provides a unique foundation on which to build an integrated North American business. Chip has done a fantastic job growing Ferguson and he now has the opportunity to combine the strengths and resources of our three businesses to drive our growth going forward.”
When Banks announced his retirement plans in September, he was asked why Hornsby is the right man for the job. Banks answered that he has worked with Hornsby for more than 20 years and has observed him grow in his jobs.
“I also understand and have observed how he handles his people, his organizational skills, and I know that he is a very competitive person who breathes and eats success,” Banks said. “It's part of his character and I think he can impart that into the company.” Banks also pointed to Hornsby's knowledge of the industry. “I think it's important that we can promote from within somebody [who] understands the culture, the people, the business, the customers,” he added. “I'm pleased to have Chip Hornsby as my successor and I think we've got a guy [who] will take the company to the next level.”
During the next few months Hornsby will continue organizing the North American operations but will also spend some time becoming familiar with Wolseley's European operations, meeting the people, getting to know the management and what goes on in the local markets, Banks said.
Wolseley Chairman John Whybrow said in a statement: “Chip has made a significant contribution to the Wolseley Group since he was appointed to the Board in 2001 and I believe that he will provide us with the continuity the company requires over the next phase of its development.” Whybrow noted that under Hornsby's leadership, Ferguson has grown from a $3.4 billion business into the $7.1 billion enterprise it is today, increasing profits by 187%.
“I have no doubt he will bring the vision, commercial judgment and clear leadership necessary to the group chief executive role,” Whybrow said.
Hornsby said he looks forward to building on the legacy that Charlie Banks will leave behind. “Wolseley has shown an impressive record of growth over many years, through both organic expansion and acquisitions,” he said. “I am confident that we will continue to build on that strong base to sustain and expand the group's development in existing and new international markets.”
John Stegeman, president/CEO, FergusonJohn Stegeman joined Ferguson 20 years ago, progressing through various management positions and working in three of Ferguson's four businesses: plumbing, air conditioning and waterworks.
He was promoted to chief operating officer at Ferguson earlier this year and is the recipient of three President's Awards for Achievement.
Future Plans“Wolseley is the world's largest distributor of construction materials,” Hornsby said in an interview with SUPPLY HOUSE TIMES. “We intend to continue doubling its sales every five to seven years.”
He said he intends to maintain a base of operations in Newport News, Va., but also plans to obtain a flat to accommodate visits to his office in England. The United Kingdom represents 20% of Wolseley's volume; 20% is from mainland Europe; and North America accounts for 60%, Hornsby noted.
“Travel will be a large part of my responsibilities,” he said. “I will make longer trips and there will be new languages and cultures to learn and understand.”
There are “enormous” opportunities for growth in mainland Europe, he asserted. At this time Wolseley is primarily in France, Italy, Switzerland, Austria, Czech Republic and Hungary.
Between now and Aug. 1, Hornsby says he will be focused on his role as chief executive of the North American operations of Wolseley, developing synergies between Stock Building Supply and Ferguson and improving the logistics network with the distribution centers. In addition, he will be spending a lot of time over the next four to five months on information technology.
“We see more joint opportunities for Stock and Ferguson, such as displaying Stock's cabinets with Ferguson's plumbing fixtures, appliances and lighting fixtures in the showrooms,” Stegeman told SUPPLY HOUSE TIMES.
“Because we have done such a wonderful job with the growth of Ferguson, and we plan to continue to double in size every five years, my focus as president/CEO will be on building customer loyalty and operational excellence,” Stegeman asserted. “We want to be sure our process alignment is the same branch to branch.”
Ferguson has added more than 3,800 positions in the last 12 months, he noted.
“We've made significant investments in our people,” Stegeman said. “We are still dedicated to training and making them more productive in a faster period of time than in the past. My vision is to ensure that we are consistent in how we treat our customers and how we handle material from an operational standpoint.”
Ferguson will continue to invest in its distribution network. The wholesaler added more than 1.2 million square feet of distribution space in the last 12 months in the United States.
“What will get us through good and bad times is being close to the customer, building loyalty,” Stegeman said.
To that end, Ferguson is committed to training every one of its associates on how to provide quality customer service.
“We have brought in an outside consultant, Jeffrey Gitomer,” Stegeman noted. “We also want to ensure that every one of our locations has the capability to train with the talent out there in the field.”
Charlie Banks To RetireCharlie Banks first joined Ferguson in 1967 and became its president/CEO in 1989. Banks was Ferguson's first official trainee and was the hand-picked successor to David Peebles, the second president of the company, who is credited with naming it Ferguson. Peebles was president in 1982 when Wolseley plc acquired Ferguson, and under his leadership the company expanded from five to 165 locations and sales grew from $6.8 million to $606 million. During Banks' term as president/CEO of Ferguson, the wholesaler's sales increased from $600 million to $3.3 billion and the number of locations expanded to more than 500. Banks' focus was on examining and restructuring the business to better serve Ferguson's customers and sustain its future growth through continual improvement and change.
Banks was elected to the Wolseley board in 1992 and was appointed its group chief executive in 2001. He was honored with an award for Chief Executive of the Year in April 2005 by Building magazine, a construction industry publication based in the United Kingdom. The chief executive award was based on four criteria: delivering excellent financial results; strong leadership skills and a sound reputation; innovation; and commitment to stakeholder and community issues.
John Whybrow, Wolseley chairman, said in a statement: “I wish to extend the Board's thanks to Charlie Banks for his outstanding contribution to the group in several key roles over the past 39 years and particularly for leading the group through an extensive period of growth and change since 2001.”
During Banks' tenure, Wolseley's group sales grew from $12.7 billion (U.S.) to $19.7 billion (U.S.) and trading profit went from $730.2 million (U.S.) to $1.3 billion (U.S.), he said. In addition, the group's share price increased by 250%.
“The Board wishes Charlie a long, happy and well-deserved retirement,” Whybrow said.
By Pat Lenius