Alex Gourlay is a Boots lifer. Having started as a Saturday boy in 1976, he worked his way up the company. In the reshuffle under new owners private equity firm KKR and billionaire Stefano Pessina, he took the helm as Boots managing director in July this year.
Gourlay has many strings to his bow, having tried his hand in several parts of the company. From the shopfloor through to healthcare, operations and property, he understands how all the Boots cogs fit together. He is also the first pharmacist to sit on the board for more than 20 years.
“We’ve got a good set-up on the board, with myself on the operational side and [trading director] Ian Filby on the commercial side of Boots,” says Gourlay. “Plus, we have the business experience that the KKR team and Stefano bring.”
Boots clearly runs through Gourlay’s veins and he is even more enthused when talking about his task of taking the business forward. “Boots has always been a leading retailer but, with the investment from KKR, we can accelerate growth and are able to make decisions quickly,” he says.
Gourlay has his work cut out. He is overseeing the rebranding of the Alliance Pharmacy stores and the refurbishment of the UK portfolio, alongside taking new shops, developing own-brand products and signing exclusive brands. He is also rolling out formats such as GP surgeries and beauty spas.
He is quick to point out that there is one clear mission running through the retailer’s activity – to enhance its position as a health and beauty expert. “Everything we do reinforces our strengths in health and beauty and we will continue to push through any initiatives that help us grow in these areas,” he says.
Healthcare and beauty are equally important for Boots. When it announced more than two years ago that it was going to strengthen its healthcare arm, it was never the intention to stop investing in beauty. “Some people got the wrong impression and thought our strategy was to focus solely on healthcare, but we just needed to strengthen this division and we were still continuing to develop beauty,” he explains.
At your convenience
The refurbishment of the stores is giving the health and beauty sections their own identities. The retailer has three formats – 1,200 Your Local Boots pharmacies, 1,200 high street stores ranging from 200 sq m to 1,000 sq m and 60 larger-format stores with full health and beauty offers.
“We are examining the best possible layout for each store,” says Gourlay. “In our larger stores, we can separate the health and beauty destinations on different floors, while in our smaller stores on one floor, we may have to create an area at the back for healthcare.”
He believes that making the three business strands – health, beauty and convenience – work in harmony will ensure Boots remains the expert. The beauty floors will carry products such as toiletries, cosmetics, electricals and convenience items such as sandwiches and snacks. The health floors include pharmacies and items such as vitamins and skincare products.
Alongside the pharmacist advice, Boots is also investing in training and recruiting more healthcare consultants to be on hand for shoppers. This ties in with Boots’ online offer, where it gives customers health advice in association with the British Medical Association. “A few years ago we had vitamin consultants on the shopfloor, but they ended up doing lots of other things so weren’t as visible to shoppers,” says Gourlay. “Now we are investing in our consultants and their knowledge covers the whole of healthcare. We believe about 90 per cent of minor health conditions can be dealt with at Boots. When shoppers think of healthcare, they should think of Boots.”
Boots’ tie-up with GP surgeries is further leveraging its expertise in the healthcare sector. Following a trial at its Poole store in Dorset, the retailer has pinpointed 150 locations across the UK where stores could link up with surgeries. It is in advanced negotiations on 30 locations and four should open early next year.
“Doctors want better premises, yet they still want to maintain control,” says Gourlay. “We are also allowing them to extend their hours and get paid for it. And, for shoppers, their local Boots is usually in a much more convenient place than the GP surgery and they can get access to doctors outside the usual hours.”
On the beauty side of the business, Boots is investing in consultants to offer advice on the shopfloor. “In the same way we offer independent healthcare advice, we want to offer independent beauty advice,” says Gourlay. “We carry our own ranges, but also lots of other brands, so we want customers to be able to ask our advice on colour, style or any other issues they have.”
Investing in beauty has allowed Boots to continue to develop its No 7 brand, which is now the top brand in the UK for skincare as well as cosmetics. It is also launching a men’s range of No 7 products in February.
Exclusive brands are also important to the retailer. Gourlay points to Model Me by hair salon chain Toni & Guy as just one of the new exclusive brands to be stocked at Boots. He believes exclusive ranges, as well as investment in own-brands, will keep the supermarkets at bay.
“We can’t compete with supermarkets on price, so we have to stay ahead in other ways. Our strength is in the breadth of our offer,” he says. “They don’t have own-brand products with the same heritage as ours and we carry many exclusive brands that would not be stocked anywhere else, let alone in a supermarket. Similarly, about 50 per cent to 60 per cent of our brands would not be stocked in Superdrug either.”
The retailer’s trial beauty spa at its Kingston store, which opened last month, is another route to securing exclusive brands. Called UR Beautiful, the spa has its own entrance and is franchised by beauty guru George Hammer, who also created the Urban Retreat spa for Harrods. Boots has pinpointed 20 possible locations where it could roll out the spa if the trial is successful.
“The beauty franchise works well in that location and it is another way of making every bit of space work well in that store,” says Gourlay. “We have also created a range of UR Beautiful products that we have put in some of our top performing stores and online, which could roll out to other stores.”
More stores are also on the agenda. Boots’ new board remains committed to its existing shops and believes there is potential for about a further 500 in the UK. Over the next three years, it wants to add about 50 shops a year.
“All our existing stores are profitable,” says Gourlay. “And Stefano is very logical – I’m sure if some were loss-making he would think about what to do with them, but fortunately we don’t have that problem. The plan is to add more in the right locations.”
Pessina’s strategy has been to give Gourlay and his team the freedom to grow. “Stefano concentrates on people and performance, plus taking the lead on all the high-level investment deals,” says Gourlay. “But he doesn’t get involved in the operational side of the business.”
Gourlay is excited by the prospect of building the business with renewed investment and being charged with leading the way – a mission that must be every Saturday boy’s dream.
A life at Boots
Age: 46
Lives: Solihull
Family: Married with two daughters
Interests: All sport, especially golf
CAREER HISTORY
1976-present: Joined Boots as a Saturday assistant in 1976. Qualified as a pharmacist in 1981 and worked as a pharmacist/store manager in several locations. Headed Boots The Chemists’ HR and central operations for stores before becoming retail director in October 2003. In July 2005, he was appointed director of healthcare, store development and property. In July 2007, he was appointed managing director of Boots.
No comments yet