Safestyle Hires Restructuring Expert In Bid To Turn Around Fortunes

In a bid to turn around the fortunes of struggling national window and door retailer Safestyle UK, they have announced that Michael Gallacher is to replace current group CEO Steve Birmingham.

The plight of the national installer has been well known for months, with numerous profit warnings and trading updates that have sent their share price plummeting to less than a fifth of it’s highs.

The key bits

They announced the news in a statement on their PLC website today, and these are the key takeaway bits from that announcement:

Safestyle UK plc, the leading retailer and manufacturer of PVCu replacement windows and doors to the UK homeowner market, announces that in accordance with long-established senior management succession plans, Steve Birmingham will retire from the Board and the Company by the end of 2018. Following a thorough external search process, the Board is pleased to announce the appointment of Michael (“Mike”) Gallacher as Steve’s successor as Group Chief Executive Officer.

Mike will join the Board as Chief Executive Officer on 1 May 2018, with Steve Birmingham remaining as an Executive Director of the Company to ensure an orderly handover and to see certain ongoing projects through to conclusion.

Mike Gallacher, aged 52, has over 20 years’ commercial and operational experience of building and managing businesses in the UK and internationally. He brings significant expertise in operational strategy, business development and performance improvement. Mike was most recently CEO of First Milk Limited, the UK major dairy company owned by British family farms, where he developed and implemented a major restructuring and turnaround strategy that delivered a £30 million improvement in business profitability in 24 months. This was recognised as the ‘Financial Restructuring of the Year 2016’ by the Institute of Turnaround Management.

Prior to First Milk, Mike held a number of senior roles at Mars Inc., including UK Managing Director for Mars Petcare. He also led significant business turnarounds in Asia for Mars, as well as working in regional leadership positions across both Asia Pacific and Europe. Prior to Mars, he was a British Army Officer for eight years.

Read the full statement here

So this is the handover stage, where one CEO carefully hands over the ropes to the new CEO. That leaves in theory seven months to wrap up Mr Birmingham’s loose ends, and to support Mr Gallacher’s new plans to try to turnaround the company.

Michael Gallacher boasts an impressive CV. In the full statement on the Safestyle site, his list of companies includes Mars and First Milk. He also has international experience and a military background. He should have a well stocked skill set.

As a result of this announcement, Safestyle’s share price jumped 6%:

Credit: Bloomberg

Investors clearly liked the news, and perhaps saw the CV of Mr Gallacher as something to build on. We’re still a long way from any sort of sustainable share price recovery, this is simply “buying the news” in trader speak. The task ahead isn’t up hill, it’s almost vertical.

Major tasks ahead

Before Michael Gallacher can start to think about growth and dividends to shareholders again, there are a number of pretty important tasks to get to grips with first.

One of them being staff retention. Anecdotal accounts say that the “new market entrants” have been poaching staff from all quarters at Safestyle. That would include sales staff, surveyors, installers and managers. Indeed, they have even tried to poach some of ours at our place! You need staff, good, competent staff, to make a business work. That needs to be stopped and something solid built from which to develop on.

Next is figuring out a way to gain back market share. If you read the last few trading updates, and their forecasts in them, it’s clear that they are losing ground to new companies – #patbutcher. As an outsider, it’s interesting to wonder if all that market share has gone to Safeglaze, or if the other established nationals have managed to snap any of that up. Rumoured Safeglaze sales figures sound strong, if they are to be believed. That may give us a clue.

Third is a new way to do business. Whether they want to admit it or not, they will still be attached to a pretty negative perception and reputation. Some home owners will say it’s not changed, even if the TV ads have tried to protray something different. So perhaps one of the biggest tasks will be for Mike Gallacher to change the way the company goes about selling it’s windows and doors. He has to understand that the market place for fenestration has changed a lot. It has grown up. Evolved into something that demands better quality, more transparent pricing and an all round personal and professional service. If they continue to go about as business as usual and do not change, it really will be curtains.

If they can somehow manage to knock those three off, then perhaps they can then start to plan for the medium term future. But, and this is a big but, they have to make some fundamental, structural, cultural and ethical changes if the company is to be turned around. It does not suit the direction the window industry is travelling in, and hopefully the new CEO sees that.