Consolidating Facilities Services
Facilities maintenance has a huge impact on a retailer’s brand image and bottom line. Dirty floors, debris-filled parking lots, withered shrubs and the like send a signal that management isn’t paying attention and contribute to the customer’s perception of the business. Shaun Levenson, chief strategy officer of US Maintenance, spoke with
Chain Store Age: What is the most common mistake retailers make with regard to facilities maintenance?
Shaun Levenson: They need to take a more proactive approach toward preventive maintenance, such as sealing cracks in the parking lot before they become potholes. Studies show that less than 25% of companies budget the recommended 2% to 4% of current replacement value for routine maintenance and repair. As facilities and infrastructure approach the end of their life cycles, facilities-management (FM) professionals will be faced with decisions about repairing or replacing their current systems. Deferring routine maintenance reduces asset life cycles and increases replacement costs, which is why preventive-maintenance programs are so vital.
CSA: There has been a move to consolidated FM solutions. What does this entail and what is driving it?
Levenson: There are several services that most retailers outsource: janitorial services, landscape maintenance, snow removal, HVAC and other electrical specialty work. Typically, the services are contracted out locally, some regionally, and, to a far less extent, nationally. But the largest retail players are now driving a trend toward consolidating their vendor base in order to aggregate and leverage their maintenance spending.
Consolidating these non-core, yet mission-critical maintenance services under one national FM solution enables retailers to leverage a single source to drive service improvements and cost reductions across all their store locations.
CSA: What is the advantage to taking a national approach to facilities-maintenance vs. a local contractor?
Levenson: Retailers that handle facility maintenance on the local level tend to have reactionary programs, with no time to focus on proactive or strategic initiatives such as energy management. They suffer from fragmented and inconsistent spend and are unable to leverage their aggregate spend. Also, their facility appearance and service levels vary greatly.
On the other hand, a nationally consolidated FM program offers a cost-effective solution that streamlines billing, reporting, and all other administrative steps. As a result, these programs demand fewer of the retailer’s internal resources. US Maintenance and other national FM providers leverage national buying-power and service-discipline expertise to offer the best possible value. We help clients take advantage of their own buying power by consolidating on a national level.
CSA: What about in-house programs?
Levenson: Retailers with in-house FM programs may have the perception of local control, but such programs don’t take advantage of buying power, and don’t offer the added control, convenience and responsiveness provided by a national service company. In addition, in-house FM programs pull store managers and personnel away from their core competencies—selling products and services.
CSA: What services does US Maintenance offer?
Levenson: We design and implement comprehensive facility-service strategies that maximize our clients’ assets, offering a full suite of facility services that include landscape and parking-lot maintenance, snow and ice management, electrical and HVAC services, roofing maintenance, and full-service janitorial and floor care. We go beyond taking care of daily maintenance needs to partner with retailers to build a long-term maintenance plan that supports their business goals and delivers continuous improvement in both expense and service levels.
CSA: How do you qualify your service technicians?
Levenson: All our providers have been screened to meet our stringent standards. Our Contractor Certification Program ensures that all contractors in our network have the proper qualifications.
We have implemented industry-benchmark compliance and insurance programs to minimize customers’ liability exposure and risks, particularly in light of regulatory guidelines for subcontracted labor.
CSA: US Maintenance recently acquired Horizon National Contract Services and Whelan’s International Co. Inc. How has this impacted your company and customers?
Levenson: We’ve combined the experience and resources of the industry’s leading experts to deliver the highest quality, most comprehensive maintenance solutions available. US Maintenance is now North America’s largest provider of retail facilities-management services. We now have the largest national network of field managers, and we have expanded our capabilities to offer our clients best-of-breed self-perform, subcontractor management, or a hybrid of both models.
Wal-Mart to sell earth-friendly CDs
SANTA MONICA, Calif. As part of Wal-Mart’s “Earth Month” the company is selling more than 20 Universal Music Group titles that come with special earth-friendly inserts. The inserts are made with special seed paper and, according to the companies, can actually bloom into wildflowers.
The inserts, in addition to being good for the environment, also offer consumers three free digital downloads from Universal Music. Universal also said that a number of its new CDs will be packaged in third-party certified, renewable recycled board and recyclable paper.
ODP urges rejection of Levan nominees
DELRAY BEACH, Fla. Office Depot is continuing to urge its shareholders to reject dissident nominees and elect the company’s nominees to its board of directors at its annual shareholders meeting this April.
In a proxy statement sent to investors, Office Depot said that Alan Levan’s proposed nominees would do little to help improve shareholder value. According to the statement, Levan’s company, Levitt Corp. has seen its share price fall about 93% over the past three years and that its subsidiary, Levitt and Sons, is in bankruptcy. Office Depot also noted that BankAtlantic, of which Levan is chairman and ceo and one of his nominees, is president of real estate, construction and development, share price has dropped approximately 75% over the past three years.
Office Depot also cited news reports that commented on Levan’s failing business ventures, as well as others that said that his nominees are not qualified to serve on Office Depot’s board of directors.
The company pointed out nominee Mark Begelman’s experience with Mars Music, a company he founded in 1997 that went bankrupt in 2002. According to Office Depot, many news reports attributed this failure to a flawed business strategy.
According to Office Depot, when Levan’s other nominee, Martin Hanaka served as chairman of Sports Authority from 1998 to 2003, the company saw its price fall by about 13%.
Office Depot stressed that its directors best understand the company and are well-suited to help the company grow.
“We strongly believe that removing two of the most experienced retailing executives from our board, including our current ceo who is driving the implementation of our strategic turnaround plan, would be highly disruptive, could delay the implementation of internal and external initiatives and could damage prospects for a successful turnaround,” Office Depot said in the proxy statement.