Robert Sawyer, CEO, Rona (Portrait by Neil Mota/Rodeo Production)
Robert Sawyer was looking for a challenge when he was recruited as Rona CEO, but even he was surprised by what he found. In his own words: “I said, ‘Oh my god, I didn’t know the baby was sick like that.’” It was a little more than three years ago and Rona, Canada’s largest retailer and distributor of home improvement products, was in midst of a full-blown crisis. A poorly managed expansion plan had resulted in five consecutive years of declining revenues, even as the larger market grew.
Sawyer took over just as the job and housing markets were slowing. A pre-existing plan called for $35 million in cost-cutting; he upped the target to $110 million at his first meeting with his new team. “If you don’t know where to cut, I’m giving you two weeks,” he told the room. Within months, Rona executed a huge chunk of Sawyer’s plan, which included slashing the company’s marketing budget as well as the closure of 11 stores. “Without the cutting, we wouldn’t have been able to pass that [point],” he says.
But it wasn’t all about trimming costs. Five months after giving the orders, Sawyer began looking to see where he could invest to help Rona achieve some wins. He homed in on underperforming assets in Quebec, as well as a poorly executed integration of Totem Building Supplies in Calgary. “If we can turn around these two, we can start to create some momentum in the network,” he explains. The real focus has been on Réno-Dépôt, one of the company’s banners in Quebec, which expanded its seasonal merchandise and put a greater emphasis on big-ticket, high-end products. Even parking spaces were widened to better accommodate trucks driven by contractors—Réno-Dépôt’s primary customers.
The results have been dramatic. In the company’s most recent quarter, it reported a 5.4% increase in same store sales and a 19% jump in net income. The company is also getting back into growth mode, opening seven stores this year and planning for 10 more in 2016. Some, like Michael McLarney, editor of Hardlines, an influential retailing newsletter, were skeptical Sawyer had what it would take to save Rona. “I was wary at first,” he says. “It seemed like he was putting his focus on what Bay Street was thinking, not his dealers—but that turned out to be the right strategy.”
