‘Big hitter’ Baldock readies Boots makeover
As workers across the City return to their desks after the summer holidays, one executive is starting somewhere new. Alex Baldock, the former boss of Currys, will take his place as chief executive of health and beauty retailer Boots on Tuesday, Morning Wire understands.
The group, one of the UK’s biggest and best-known retailers, has won the signature of one of the City’s buzziest bosses. Baldock began his career as a management consultant before joining Barclays as a corporate director and later leading online retailer Very for six years, ahead of his stint as chief executive of Currys.
As Boots prepares to welcome Baldock, the company has a big decision to make. The group’s owner, US private equity firm Sycamore Partners, has been weighing an initial public offering (IPO) or another private sale, both of which could value the retailer at more than £7bn.
Boots had been in sales talks with the Weston family, the billionaire owners of FTSE 100-listed Associated British Foods, and Australian pharmaceutical group Sigma Healthcare. Sigma quit these discussions in June, fuelling speculation that a return to London’s public markets could be the more likely future for Boots.
The retailer had been listed in London until its £11.1bn sale in 2007, when it became the first-ever FTSE 100 firm to quit the market in a private equity takeover.
Whether Boots ends up opting for a public float or a private sale, Baldock’s brief will be “about accelerating growth, improving productivity and positioning Boots strongly for whatever lies ahead,” independent retail analyst Catherine Shuttleworth told Morning Wire.
Baldock won plaudits for his successful turnaround of Currys, where he slashed the group’s store footprint, strengthened cash generation and improved profitability.
The FTSE 250 firm’s share price was in retreat when Baldock was appointed as chief executive in February 2018, having shed nearly 60 per cent of its value since the stock’s highpoint at the start of 2016.
But Currys’ share price has gained more than 32 per cent to 150p in the past year and the firm grew its profit by a fifth to £153m in the year to May.
“Currys is trending in the right direction on every dimension that matters,” Baldock said in his last update to shareholders. “I’ll be a loyal Currys customer, advocate and shareholder all my life, and will be cheering on Fredrik [Tonnesen] and his world class team.”
Baldock is admired in the City for his knack for communicating a clear strategy to investors and to his colleagues, Shuttleworth said. “[He] has a track record in taking big, established retailers and making them sharper, more modern and more commercially focused.”
When Baldock joined Currys, the electrical retailer was suffering from a struggling mobile business, a lack of high-margin services and a “bloated” logistics network, said Panmure Liberum analyst Wayne Brown.
“It was a business that needed a lot of love and it needed a central ethos and focus. And [that’s] what Alex Baldock is very good at doing.”
Many of the issues facing Currys in 2018 do not apply to Boots in 2026. The firm benefits from a higher spend frequency than in the electronics sector, offers some higher-margin services and is able to engender a loyal customer base through its wide offering, which includes opticians and pharmacies as well as retailing.
But Baldock still has work to do at Boots, Brown says. “The quality of the estate is hugely variable. There’s some terrifically amazing flagship stores, and then there’s a huge amount of stores which need a lot of love and attention.”
The group operates more than 1,800 stores across the UK. The firm invested in refurbishments at more than 40 of its flagship sites and more than 180 of its beauty halls in the past year.
But Boots’ estate is still “skewed towards” its stores on high streets in small towns, Brown said, which have “weaker economics”. The group should forge ahead with opening more of its beauty and health-only formats, he added.
Beyond the firm’s sprawling store profile and competition from retailers like Holland & Barrett and Marks & Spencer, Baldock’s first task will be laying the groundwork for a culture shift at Boots, Brown said. “There’s going to be lots of people in the business that have been there for many years, and your biggest challenge is winning people over.”
Baldock commanded a “strong and loyal following” at Currys, an executive at the retailer told Morning Wire. “He’s a strategic thinker but can react to changing circumstances as needed,” they said. Baldock’s success in steering Currys through the Covid-19 pandemic is evidence that he is “cool in a crisis,” they added.
Another former colleague of Baldock’s, who worked in middle management at Very – then known as Shop Direct – during his tenure at the online retailer, told Morning Wire that Boots’ new boss is a “big hitter”.
Baldock was hired at Very because of his “gravitas” and “serious approach,” they said. “I think the view of him going into Boots is [that] he will bring a level of expertise and seriousness into that business.”
While Very’s previous boss had been known for his affability, Baldock came across as a “hard taskmaster,” they said. “[He] is focused on the result, [and] less so [on] the softer elements. But I certainly enjoyed [his tenure] and saw him make a positive change in Shop Direct.”
Ever since Sigma Healthcare withdrew from sales talks, Boots has refused to be drawn on whether it prefers a sale to the Westons or a return to the London Stock Exchange. People close to the company insisted that it is pushing ahead with its growth strategy regardless of these talks.
“Obviously, from a public markets perspective, I’d love it to IPO,” Liberum’s Brown said. “I think the City would have a lot of belief in [Baldock] because of what he’s delivered on. He’s definitely got his supporters out there, and he’s done a good job in the past.”
Announcing Baldock’s appointment in May, a spokesperson for Boots said: “As we look ahead, we are fully committed to continuing to offer an outstanding experience for all our communities and strongly believe in the opportunity for significant long-term growth at Boots.
“Alex is an experienced, transformational leader with a track record of success and we are delighted he will be joining us as we embark on our next phase of transformation, growth and investment.”