The closure of half HSP’s 12-strong network of distribution centres is the key element in a radical restructuring programme that will reshape the paper merchant, which has its headquarters in Northampton, over the coming months. Each of the six regional sales centres in Manchester, Leeds, Leicester, Harlow, Tunbridge Wells and Bristol, will swallow up another site (see box), and will be headed up by newly appointed regional directors.

Getting closer
A central aim of the restructure, Lane-Ley says, is to get closer to printers and be more responsive to their needs. He claims that the changes will help HSP to speed up the corporate decision-making process. “We always thought we ran a lean management structure, but we concluded we had too many layers between the managing director of HSP and our customers. We’ve now halved this to only two, because we want better communication and we want to give our customers quicker decisions,” he says.

In this way, he hopes that the company, which is part of the Australian-owned PaperlinX empire, will distinguish itself more effectively from its competitors. “There is a lot of ‘sameness’ in the industry; we are trying to differentiate ourselves by playing to our strengths.”

One way to do that, as every printer will know, is to offer the keenest prices, and by reducing its cost base, this is exactly what HSP hopes to do. Lane-Ley says that while he wants HSP to be “hugely functional and easy to use” for its customers, he also wants to get the message across that talking about dropping prices should no longer be a “cardinal sin”. He wants to make clear that paper merchants are able to bring value to their customers. “We want to offer a customer a lower price, but not by destroying value,” he says.

HSP’s move reflects the ongoing consolidation in the print industry that it serves. Lane-Ley describes today’s print sector as “a fairly aggressively-fought territory”. Alongside the paring back of the firm’s physical presence, Lane-Ley’s restructuring programme involves a review of the cost and use of products. There will be a number of product changes going through the system over the coming year, he says. “It’s all about our papers having good reasons to be here. They all have to have technical attributes that can be recognised by a printer as being attractive,” he says.

If the changes at HSP reflect the changing face of the industry, it is because they are a direct response to them. Lane-Ley says: “Everybody in this industry is having to go through change. It touches everyone. It is important that the industry realises that we do compete, because we all have different things to offer.” He claims that while other merchants are competing in the “humdrum greyness of general merchanting market,” he wants HSP to stand out. For example, no one else has a fully automated warehouse like HSP’s in Northampton, he says. “It’s unique.”

In particular, Lane-Ley says HSP should be known for its relationships with customers. He explains: “The printers that have been successful are the ones that are building collaborations with their customers and their suppliers, and that flows through what we are saying.”

Amalgamation and consultation
The process of amalgamating the branches is now well underway and consultations with staff have been completed. Every employee affected by the closures has been offered a position in one of the centres that will remain and each was offered an “extremely generous” relocation package, Lane-Ley adds.

When the restructure is finished by the end of September, he hopes that HSP will be able to prove that it has become “extremely efficient and as low-cost as possible, in recognition of the pressures facing the industry”. However, the strength of Lane-Ley’s belief in what he is doing at HSP is tempered by a recognition that many areas of the print industry are still in troubled waters.

He says: “We are very cautious about the state of the industry. We’ve built our plan on solid financial foundations, rather than looking for aggressive volume growth. It is all about making ourselves more fit for purpose. We can’t talk about lean and mean working for our customers without applying the same rules to ourselves.”

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HOWARD SMITH PAPER
Head office Northampton
Group managing director Malcolm Lane-Ley
Annual paper sales 355,000 tonnes
Employees 350
Site amalgamations
• Edinburgh to close; will merge with Manchester
• Tyne and Wear to close; will merge with Leeds
• Norwich to close; will merge with Leicester
• London to close; will merge with Harlow
• Southampton to close; will merge with Tunbridge Wells
Plymouth to close; will merge with Bristol