For an industry obsessed with cultivating a strong image, it may seem bizarre for Gardner Merchant to throw its hard-earned brand name out of the corporate window – but the move has been a long time coming.
Some have seen Gardner Merchant’s repeated references to its “alliance” with the French giant Sodexho as a desperate and futile bid for independence after the £730m takeover.
Others say it is rather more than coincidental that the group has taken on the French name just two months after the resignation of chairman Garry Hawkes.
But you won’t hear any of this treasonous talk from Gardner Merchant chief executive David Ford. He insists that the decision to drop the Gardner Merchant name rests entirely with the UK division rather than being by order of the Paris headquarters.
“No one has ever asked me to change the name,” he said. “We could have waited 10 years before changing it.”
What is more, Ford argues, although he reports directly to Paris, the UK division will retain its autonomy.
“I don’t want to preside over a subsidiary where the biggest division is called Sodexho and we are looking like uppity Brits. I don’t find that a tenable situation.”
A more baldly commercial reason to dump the old name is that it posed a serious threat to Sodexho’s master plan to branch out into areas other than food service.
“The name [Gardner Merchant] has such a strong association with food service that it is holding back our push into other areas,” said Ford.
These areas are the hugely lucrative Private Finance Initiative (PFI) contracts that are fast emerging in the health and education sectors. Contracts typically cover security, maintenance and cleaning, as well as food. And winning a PFI bid often means a company has a guaranteed contract for up to 30 years, compared with the traditional two to three years for the average food service contract.
Ford also wants to start taking on full management contracts for hotels, rather than doing just the banqueting. The company is poised to announce a “big hotel deal”, it says, which could mark a significant new source of cash.
This may sound like a major diversification, but the fact remains that 85% of Gardner Merchant/Sodexho’s business remains with food service and Ford is adamant that food will remain the company’s core business in the UK.
That may be so, but since Ford became chief executive, there has been a string of departures of people previously regarded as core staff.
High-profile farewells have included Julian Squire, managing director of Primary Management; Tim Cookson, managing director of education services; Howard Collyver, head of vending; Caroline Black from Kelvin; and, most recently, corporate division managing director Bill Toner.
But Ford puts the departures down to “structural changes” and argues that senior management resignations have been “very rare” and considers only two of those departed – Toner and Cookson – to be of significance.
“In reality, it is only two in operations terms. When I took over as chief executive, I made some structural changes, but the principle has never been to remove people. If I have made changes, there have always been opportunities for people to do something else. Not all these people chose to do that.”