Rexel Changes – What Could They Mean?

Last week Rexel announced a change in its North American leadership. Jeff Baker announced his retirement after 15 years of leading Rexel after it acquired Platt. This announcement follows one from earlier this year when Rexel announced a new Chief Digital Officer for Rexel US.

And this follows Rexel corporately receiving new leadership in a number of areas. Just in looking at their Executive Committee:

• Guillaume Texier joined Rexel in September 21 as CEO from Saint-Gobain.
• Constance Grisoni became Rexel Group’s Strategy Director in late October after joining the company as a Manager for their Digital & Transformation team in 2020 from Boston Consulting Group
• Guillaume Dubrule joined Rexel in 2019 and become Group Purchasing and Supplier Relationship Director in January 2021

The new Rexel USA CEO, Brad Paulsen, will also be a member of Rexel’s Executive Committee.

Paulsen comes to Rexel from HD Supply where he was COO with responsibility for Sales and Supply Chain. Prior to that he spent 9 years at Home Depot (HD Supply’s parent). His roles at Home Depot focused on “merchandising” which, many equate to supplier relations roles.

Remember, Home Depot purchased HD Supply in November, 2020, which is when Paulsen would have been President of HD Supply.

Reportedly, as a merchant for Home Depot, he had responsibility for cabinets and hardware. While not electrical, his exposure is building materials (perhaps contractor and remember, Home Depot has the referral program to Pros for cabinetry installation) and MRO (albeit more commercial / institutional MRO) with HD Supply

His role at HD Supply had him responsible for supporting 300 distribution points and 10 call centers. Given that Rexel has 446 distribution points, the scale is comparable. The call center experience could be of future interest.

His LinkedIn profile highlights extensive experience in Global Sourcing, Merchandising, Product Development.

Back in January, Rexel USA hired John Pehler as Chief Digital Officer. Prior to joining Rexel, Pehler had been Global Head of Digital Customer Engagement at Caterpillar which means he was developing tools to support dealers (or, in Rexel nomenclature, could be branches and/or contractors) and previously was Director of Digital Experience & Strategy at Grainger (which provides insight into the needs of the industrial MRO world.)

Oh, and in Q4 last year Rexel acquired Mayer and Winkle (a Rockwell distributor).

What could this mean?

In speaking with industry insiders and reviewing recent Rexel changes, some thoughts:

• It’s evident that Rexel is seeking change. They’ve gone outside the industry for corporate roles at the Rexel level and have now gone outside the traditional “electrical” industry for US leadership. Change is desired for some reason. Could it be pursuit of a different customer base or a desire to grow their incumbent MRO / industrial customer base at a faster rate? A desire to accelerate digital adoption internally as well as with customers, perhaps thinking it can mimic its reported success in Europe?
• The recruitment of Paulsen is a little different from Rexel USA. Jeff Baker brought stability to the business for the past 15 years after a run of a number of relatively “short-term” industry individuals (Chris Hartman, Jim Hibbard) and there was Brian McNally from outside the industry. Prior to that there was Dick Waterman, who joined from the Westburne acquisition and then some individuals who came other from France. For years Jeff has promoted many of the strengths from Platt and brought the operational elements under one umbrella with the eight regions (now nine with Mayer) which helped simplify the business, however, a number of the regions have been challenged to generate significant, consistent, growth. Perhaps new Rexel leadership looked and simply said “time for change, time for a new vision.”
• Reportedly some current Rexel management felt that they either would be interviewed for the role or thought they could have been / should have been given the opportunity. No one seems to know why they were not, but inevitably this could mean further change in various regions down the line. And with new leadership there is always an after effect.
• According to two sources, Rexel corporate wants to see the US have a more robust acquisition pipeline. The company, in the Paulsen press release, stated revenues were 3.9 billion euros ($4.2565 as of 3/13/22) and had “big ambitions as demonstrated by the acquisition of Mayer in 2021). Whether those are acquisitions of electrical distributors or other complementary businesses is unknown. If it desires electrical acquisition deals, there is some brand repair that probably needs to be undertaken or the company will need to pay a premium. Both Mayer and Winkle had circumstances unique to themselves.
  • With the leadership changes, could this be
    • Acquiring MRO-oriented distributors? Perhaps other industries?
    • Do they keep the 9 regions and seek diversity in each?
    • Is Rockwell acquisitions realistic unless contiguous to other APRs they own?
    • Is Rockwell looking for localized businesses or those that are scalable?
    • Focus on climate technology-related companies … building automation, solar, etc? Expand its Rexel Energy Solutions group?
  • Worst case, distributors seeking to sell may now have another active acquirer in the market.

So, the question becomes, what is next. Suppliers are wondering. Presumably a level within Rexel management will wonder while the people in the branches will continue to focus on the day to day and serving customers. From a competitor viewpoint, no change at this time although it is evident that Rexel plans to continue to accelerate its digital initiatives whether they be eCommerce, more / better tools for interacting with customers digitally, better tools to support its staff, etc. This is an area for distributors to watch.

From the changes you’ve seen and what you have heard, what do you think Rexel’s leadership changes could mean … steady as she goes, refinement or changes coming?