Sunday, September 16, 2001

Career jump proved right move


Sargent left Kroger for Staples

By James McNair
The Cincinnati Enquirer

        Ronald Sargent slogged his way from Holmes High School in Covington to Harvard University's School of Business. He served time cleaving chickens and loading trucks for Kroger, then suited up for a long run in management, first at Kroger, then at Staples Inc.

        Come February, all of those years in the trenches will produce a tidy payoff for Mr. Sargent, 45. With Staples founder and CEO Thomas Stemberg stepping aside as executive chairman, Mr. Sargent will assume command of the Framingham, Mass.-based office supplies retailer.

[photo] Ronald Sargent cut his teeth on retailing at Kroger, then took a chance on a fairly new company called Staples.
(Enquirer file photo)
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        Born and raised in Covington, Mr. Sargent treated his promotion in low-key fashion. Staples shares last week were up 24 percent on the year, quite a feat in a bear market. Not an unpropitious time, perhaps, for the 1973 Holmes High alumnus to try his hand as CEO.

        “I'm walking into a pretty good situation,” Mr. Sargent said in a telephone interview.

        A daunting one, too, at least to the average manager. Staples will sell about $11 billion worth of goods this year, ranking it just behind Office Depot among big-box office suppliers. In five months, Mr. Sargent will be in charge of more than 50,000 employees and more than 1,300 stores in North America and four European countries.

        But Mr. Sargent is up to the challenge, one he has prepared a lifetime for.

        “Retailing is something that gets into your blood,” Mr. Sargent said. “All through high school and college, I wanted to make retailing my career.”

        The first leg of that career commenced at a Kroger store in Fort Mitchell during high school, then resumed at a Kroger in Tri-County Mall, where he was in management training while enrolled at Harvard. In those jobs, he tasted every aspect of the business.

        “I worked the cash register, stocked shelves, worked in the supply room and unloaded trucks,” he recalled. “At Kroger, you go through a very intensive management program where you work in every department of the store. I remember cutting up chickens in the meat department in 45-degree temperatures and getting blood all over you.”

        Mr. Sargent joined Kroger full time in 1979 upon graduating from Harvard. He stayed 10 years. His last job was as marketing director for Kroger's dairy foods manufacturing unit.

        Ron Rice promoted Mr. Sargent into that job in 1988. The former senior vice president of manufacturing said Mr. Sargent was a solid problem-solver who was cool under pressure.

        “He worked for me for about a year,” said Mr. Rice, who retired in 1998. “Then he came into my office one day and said he really enjoyed what he was doing, but said he had a chance to join an upstart company with some potential. He was very concerned about the future.”

        The company was Staples. At the time, it was 4 years old and privately owned with only 20 stores in the Northeast. Iffy as it was, a plump compensation package and the chance to launch Staples' expansion in the Midwest were too good to pass up.

        “I told my wife I'm either going to be very happy with this company because the concept is good — or I'm going to be unemployed,” Mr. Sargent said.

        Staples opened four stores in Cincinnati and four in Columbus in the year before Mr. Sargent was transferred to suburban Boston. Staples went public in 1989 at a split-adjusted price of $1.11 a share, and 78 percent of the shares are today owned by institutions. Leaving the security of Kroger was a smart move after all.

        As CEO, Mr. Sargent does have some immediate challenges.

        Staples' net income of $60 million in 2001 was one-fifth what the company netted the year before, and its year-to-date earnings are down 8 percent from last year. Sales, amid an economic downturn, inched up 4.7 percent in the six months ended Aug. 4.

        By the time Mr. Sargent becomes CEO in February, the economy and the company may well be back on track.

        Meanwhile, expect to see the Sargents and their two boys, 9 and 7, during their regular trips to Cincinnati. The Sargents, who live in Hopkinton, Mass., still own a house in Edgewood and usually come home for Thanksgiving and Christmas.
       

       



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