The weeks since that acquisition have been hectic and intense, dealing with all that occurs in a post-acquisition situation. Key to the future success of STL-D going forward were issues such as putting in place a robust stock-control system, getting stock levels up in the warehouse, rebuilding customer confidence (both supplier and retailer), gaining the trust of staff and setting out the strategy for the future of the company.

I caught up with Munro at the beginning of March, in between some of the many client meetings he has had, to find out how things had progressed since we last spoke. (see Christian Marketplace – Feb 2010).

CJ: A few weeks further down the line postacquisition, how does it look to you now?

KM: The intensity and the hectic nature of things have just continued. As I look back over the last three weeks the daily run-rate has picked up encouragingly. We had a plan for February which we have exceeded and that gives me considerable comfort that the actual business performance is still there and growing.

As I’ve said before, there is real evidence of considerable loyalty, empathy and sympathy out there from customers for the STL brand. From a customer perspective I’m very encouraged; the volume of business has picked up and is ramping up on a week-by-week basis.

From a supply chain perspective we have had no further surprises, which is good; pretty much everybody is now on board. The only significant challenges for the business - SU and Kingsway distribution changes (clearly planned and well underway before we bought the business) – we took very early on. And we had a plan to insulate us against unexpected hurdles because I’ve been down this route before in previous acquisitions.

CJ: Key issues when we spoke before were restocking, re-signing suppliers and getting Informix up and running. You’ve mentioned progress with suppliers but what about the other issues?

KM: On re-stocking we are making great progress; it’s just a factor of time, getting the product on the shelves here. As far as Informix is concerned the project has run extremely smoothly and we’re just about to publish the go-live date.

You have to understand just how low the live stock levels were. We’re basically building the stock back from ground level and you have to be very careful in that. We’ve brought in some new supply-chain disciplines, just to ensure that we don’t end up in an overstock situation. That was one of the issues that drove the major cashflow problems in the previous business.

You’ve got to be very careful; you’re buying little and often, making sure that you are managing your stock optimally. I’ve got no major concerns; availability rises by the day and I anticipate our objective of being fully stocked at the end of the first quarter will be met.

CJ: So are you getting closer to a just-in-time supply situation then?

KM: I don’t know. I need to see the appropriateness of that in this industry and see how close you can get to that. This isn’t the electronics or computing industry; we’re not dealing with components here. But the more efficient you can be in bringing product in and sending it out on a very short leadtime, the more effective we can be in both service delivery and fundamental profitability.

CJ: Are you adopting a smarter rather than bigger approach then?

KM: By default we are big because of the scale of demand on us - which might surprise some people. The daily run rate in this business is very significant and as availability rises the challenge will only increase – so that’s extremely encouraging. I know some people argue about us being a onestop shop, but we are the closest to delivering that level of service that anyone can get to in this industry and there is real demand for this capability. However, it’s not just about scale and size; it’s also about being smart in our management of the supply chain, in our marketing and support to customers that ultimately benefits everyone.

CJ: The old STL-D left behind some major creditors, including a number of your clients who are owed significant sums of money. How do you go about winning their confidence to sign up with the new STL-D?

KM: It’s all about the future, sitting down with them and drawing a clear line. The relationship with the old IBS-STL company is very different from the one we have with them. Where necessary we’ve built strong financial partnerships from day one just to demonstrate the strength of the business and the fact that we have re-capitalised. But I think the main driver has been me meeting personally with all of them and quite clearly outlining to them my vision for the future for a focused distribution and wholesaling business in the UK; that and the fact that we are going to build a customer focused business that delivers the highest level of service.

CJ: Given the legacy you inherited, some might wonder why you didn’t drop the STL-D name completely and operate solely as John Ritchie Distribution?

KM: We might do that yet. We’ve taken soundings, we’ve run a number of focus groups with the Crown Retailers and also across the market in general and there are two opinions emerging. From a retail customer perspective there is real loyalty to the STL-D brand and they have said to us that they don’t see any reason for us to change. From a supply-chain perspective it appears there is an almost universal recommendation that we should re-brand the business.

On balance I would say that it is likely that we will transition to a new brand sometime during 2010. We’ll consult widely making sure our customers and partners understand that all the best bits of STL-D’s infrastructure, scale and people are remaining. But this time next year we will be talking about a re-branded business.

CJ: Perhaps retailers are a little hesitant because they don’t really know who John Ritchie, the company, is. How would you describe the company and its ethos then?

KM: The ethos of Ritchie is the ethos of the Lord’s Work Trust (LWT), which is to support Christian outreach projects around the world. The whole focus of what we are doing is to drive funds back for the Trust to distribute as they see fit.

It’s about being efficient, commercially smart and professional in business. As I’ve said before, I don’t see the two as being mutually exclusive. We are very missional, that is our inspiration, that’s the reason why I am here. However I believe it goes hand-in-hand with a well-run organisation; that’s the combined ethos.

I’m here within the Ritchie organisation, as part of the Trust, to drive great business performance. We believe that off the back of great business performance we’ll be able to provide the greatest return to the Trust. And a very important part of the vision is to continue to support the CBC trade in the UK.

From both the supply-chain partners, who did suffer very badly, and from the customer base, I’ve experienced a real sense of relief and gratitude that we stepped in and bought this business because they still see it as being a fundamental part of the equation in the UK.

CJ: STL-D had their Crown Books programme; Kingsway are launching a partnership scheme; Gardners have just launched their Independent Booksellers Affiliates Programme. What plans do you have to support retailers?

KM: There will be re-branded loyalty and partnering programmes, which will have a broad appeal and a broader base. We are currently examining the whole see-safe and returns equation within our business. Too much time, money and effort, for everyone, has been spent dealing with stock moving back and forward as part of our promotional programmes. As we improve the efficiency of this part of the business I anticipate offering significant benefit back to our customers, in both price and service.

CJ: There is an increasing move towards internet sales; how does that impact on what you are trying to do?

KM: As far as I am concerned there is a whole internet wave that’s washing in and we have to build a business that can supply and fulfil for that channel as well. So we will work with internet retailers, just as we will work collaboratively with the CBC trade. We see ourselves as being a distribution business and we will supply companies whether they are driving a tele-sales operation, catalogue selling, web-sales, or a physical retail outlet. We’re just passionate about being the best distributor and wholesaler.

CJ: You recently announced 45 redundancies in Carlisle. How was that decision received by the staff and do you anticipate any further job cuts in the coming months?

KM: Well firstly let’s remember that by buying the company we have actually saved 140 jobs, but no I don’t anticipate there being any further job cuts.

The decision was received well internally because it was communicated from day one. When we bought the business I said we would have to re-size; we TUPE’d across positions which were multi-dimensional, in that they supported the retailing and publishing businesses as well as distribution. This meant there would be a natural scaling down and that is the exercise we have gone through. We have also looked at how we can drive efficiency across the whole organisation and arrived at a staffing level of around 135-140 fulltime equivalents, which we believe is right.

CJ: So how would you sum up the future direction of the STL-D business under Ritchie?

KM: The foundations for the future success of this business are built upon us firstly being very efficient, secondly managing our costs very effectively, thirdly re-engineering a fundamental part of the business – the see-safe and returns model – and, fourthly, and perhaps most importantly, driving a real focus on data and turning information into intelligence. I believe that those who invest in data analytics, providing powerful insights into their customer’s and supply chain partners businesses will ultimately succeed. This is an area that STL D had not traditionally focused on. These four pillars will be very important for the future of our business and for our forward-looking vision.