Mike Bosman has brought much-needed energy to the Spar Group in the comparatively brief seven months since he was appointed executive chair last January. In that time he has managed to calm many of the explosive situations scattered across the group, any one of which could have crippled Spar’s prospects of reclaiming its place as a vibrant operator in the local grocery industry.
Significantly, given the latest appointments, most of those troubling situations related to tensions between Spar and its independent retailers.
Of course, major challenges still need to be addressed. There’s the hefty debt, the botched SAP project, what to do about Poland and then, of course, how to secure and grow its share of the South African market during the toughest trading period in decades.
Bosman has also managed to find a new CEO for the group. Angelo Swartz looks to be an inspired choice. He wasn’t the most obvious one; that would more likely have been Rob Philipson or Gary Alberts.
Sources inside the group describe Swartz, 41, as capable and good to deal with. Few analysts knew of him, which may be good news because it means he’s untainted by the shenanigans of recent years. As one analyst told the FM, his low profile means he can’t be prejudged. “With the right sort of support from the board, things should start to look up for the group.”
It’s surprising that the Spar board always selects the guild chairs, and selects them from Spar senior management
And it’s something of a relief that the Spar board did not go the external route, though it must have been a temptation. In a way Bosman did succumb to that temptation with the appointment of what looks to be a sidekick for Swartz. The position of COO has been created for Megan Pydigadu, who will give up what must be a tough job as CFO at IT services group EOH. She joins Spar in November to take up a position that will likely be as tough.
The company says the COO position will “strengthen the group’s executive team and provide support to the CEO on the co-ordination and oversight of the operational and functional activities of the group as well as retailer profitability”.
There must have been some interesting discussions among the EOH directors about Pydigadu’s move. Bosman has been on the EOH board for just more than four years and he’s unlikely to have lured the group’s CFO away in the face of steep opposition from his co-directors.
From this, we could draw two potentially optimistic perspectives: that EOH is now firmly enough on the road to recovery that it can cope with the departure of a key executive, and Bosman should have a good sense of how effective Pydigadu is. Presumably effective enough to overlook her lack of experience in the grocery industry.
So, it’s looking encouraging as far as the Spar main board goes, which is just as well given what’s ahead of them. But there’s one glitch: Swartz is set to take up the role of chair of the Spar Guild in September.
The guild, which sounds like a quaint ineffectual entity from a bygone era, does play a crucial role in managing the inevitably tense relationship between Spar and its independent retailers. In recent years, it hasn’t played that role well. One of the highest-profile instances of the guild going rogue was the legally flawed “perfection” of a number of stores run by the Giannacopoulos Group in 2019. It’s also troubling that in the past three years, there have been three guild chairs.
This doesn’t appear to be how the system is intended to run, according to Spar’s own annual reports. “The concept of voluntary trading (which is the Spar model) is based on mutually beneficial co-operation between the independent wholesaler (Spar) and its independent retailers ... In South Africa, this voluntary trading model is managed through guilds.” The guild is also described as a nonprofit entity governing the mutual interests of Spar and its retailers.
All of which would encourage you to assume the guild is an independent referee of sorts. And so, it’s surprising that the Spar board always selects the guild chairs and selects them from Spar senior management.
Given the controversy around the guild (including the Giannacopoulos family’s threatened legal action against it), it’s all the more surprising the board has selected the CEO to do the job.
Many of the independent retailers, who might otherwise have welcomed Swartz, will be disappointed by a move that seems to cement the superiority of Spar’s interests over theirs.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.