This boss is a Mensch – Spar’s outgoing CEO Wayne Hook (56) explains why his family takes priority

Spar’s outgoing CEO Wayne Hook is what my pal David Shapiro would call a mensch. Humble, solid, reliable, honest. One possessing integrity and honour. So it was not really a surprise to see he has decided to put his wife’s life threatening illness ahead of his corner office. After seven years running Spar and 29 years with the 50 year old group, Hook, a trim and healthy 56 year old,  has decided to hand over the reins. Another mensch, Spar’s chairman Mike Hankinson, says he tried convincing Hook there were ways of working around the issue. But as you’ll read from interview today, that wasn’t an option. It was an interesting discussion ranging from the new joint venture with Shell through to Spar’s ambitions in Africa. All at wish the Hook family well. – AH         

To watch this CNBC Power Lunch video click herep09-Wayne Hook - Spar

ALEC HOGG:  Retailer Spar has said it plans to expand its Spar Express concept with Shell in the next year.  The retailer also reported a 13 percent increase in full year headline earnings and declared a dividend of 306 cents per share.  Joining us now is company Chief Executive Wayne Hook, yesterday announced that he would be stepping down from his position, due to his wife being diagnosed with a life-threatening illness.  We’ll talk about that side of the story in a moment Wayne, but this is presumably your last set of financial results, year-to-end September.  You’ve run the company for seven years and been at Spar for 29.  Are you going to open a Spar of your own now?

WAYNE HOOK:  Well no, I’m not.  At this stage, my role is yet to be finalised.  However, I’m going to be staying on in the company.  They tell me my skills will be retained, but my intention is to stay on and really just be in another role that allows me more flexibility to make my family and my wife a greater priority than she may have been in the past.

ALEC HOGG:  This set of results is solid – reflecting a rather steady state.  At half year, you were 12 percent up.  Headline earnings for the full year – 13 percent.  It’s the same with your turnover, too.  It seems to be that kind of company nowadays, where there are no real shocks in the system.

WAYNE HOOK:  You say that, but in the first half of the year, we were helped by STC (tax) in the prior year, and if you look at our trading profit per se, we were up 5.2 percent.  In the second half of the year, we were up 14 percent, so certainly a year of two halves, a much better performance, and a stronger finish for us.  Our margins were better in the second part of the year and our expenses were far better controlled, so I’m happy about that.  As you say, it is my last set of results, but from my point of view, it’s at least nice to go out having reaped the benefits of a lot of work.

GUGULETHU MFUPHI:  Looking at your Spar Express venture that you will do in conjunction with Shell garages, we know that other retailers have been doing this for some time now.  Why the delay?

WAYNE HOOK:  Well, to be honest all of them spoke to us a long time ago before they went with other people and I think for us, the issue in the initial stage is like existing retailers, they have to be able to make money.  We had a serious concern about whether forecourt stores would make money out of food, so we were reticent for that reason.  We did some pilots in the early days, more than ten years ago, but at that stage, the forecourt people wanted all or nothing.  For us, we didn’t want to be taking on 60 square metres.  We needed a certain amount of space in order to do a decent job, so there were issues there.  However, as time has passed, these stores have continued to stay open and succeed, so we’ve decided to rethink on that.  We’ve just had one pilot open and we’ll do a few more pilots.  What we want to do is make sure that it works in our environment under our system and then we will roll it out.  We haven’t made the decision to go ‘foot flat’ on it, but in the next six to nine months, we will be in a position to do so.

As this three year share price graph shows, Spar shareholders will also be sad to see Hook go.
As this three year share price graph shows, Spar shareholders will also be sad to see CEO Wayne Hook leave the hot seat. For more click here for our data page on the company. 

ALEC HOGG:  How is Shell managing it at the moment?

WAYNE HOOK:   To be honest, I don’t know all the details.  They obviously have their own distribution arrangement with wholesalers etcetera through third parties.

ALEC HOGG:   In house?

WAYNE HOOK:  Not in house.  The third parties are supplying them, so we will obviously take over that responsibility, but for us the supply of goods is one thing.  What we have to do with our people is to help them with the retailing side of things and the retailing expertise, because that’s where they need real help, and to put a brand to this thing and only with all three of those will it be a success.

ALEC HOGG:  What I’m getting at is that clearly in Spar, you have owner-operated stores.


ALEC HOGG: Is that going to be the case with the forecourts at Shell?

WAYNE HOOK:  Most of these…certainly the first one – we are, as an owner-managed forecourt store, so with most of them it seems to be the case.

ALEC HOGG:   So you help the person who sells petrol, to now sell groceries.

WAYNE HOOK:  Sell groceries properly – that’s the plan.

ALEC HOGG:   It’s Spar’s 50th anniversary this year.  You’ve been with the company for more than half of that time.  It’s quite incredible, but what I did find interesting is your Africa expansion.  Is that not in your remit here?

WAYNE HOOK:  Well people forget, we have Namibia, Botswana, and Swaziland covered.  We have about 63 stores there that we support out of our South African operations/distribution centres.  We have a 35 percent interest in Spar Zimbabwean, and a Zimbabwean company named Innscor owns 65 percent.  We have opened – in the course of the last year – four stores in Mozambique, – a couple of Build-It stores.

ALEC HOGG:   But where do you stop?

WAYNE HOOK:  The way Spar International’s Licensing Agreement works: you apply for a license for a territory, you go with your business plan, and you are granted it or not.  We are the second-biggest country in Spar, so I sit on the Board of Spar International are therefore  have some say in where they go.  That doesn’t give us a pre-emptive right, but we’re the second-biggest country in Spar so for that reason they would talk to us about Africa before they went elsewhere.  As far as Africa goes, in Zimbabwe for example, there is an independent person who has that license at this stage of the game, and we have discussions with them about getting involved with them.  There’s an independent person in Nigeria at this point in time with just a few stores, so we don’t have an unfettered right to the entire continent.  For us, it’s a case of evaluating each country.  Are we going to do this one with a partner?  Our model is that we are a wholesaler.  We can’t go and put a 500 million rand distribution centre down in a country and say ‘let’s go for it’.  We have to make sure the customers are there, so we will develop those – let’s call it deliberate – as opposed to just rushing headlong into it.

GUGULETHU MFUPHI:  Let’s look at your decision to step down. You’ve been with the company, as Alec mentioned, for more than 20-odd years.  What legacy do you believe you’re leaving behind, at Spar?

WAYNE HOOK:  Well personally, it’s not about me and if you talk to any Spar person who’s gone before me and who will come after me, hopefully – if we can maintain the culture – it really is about the fact that it is a team that runs the show.  We don’t try to be characters that stand out in the world.  We’re humble and that’s what fits into the Spar culture, so for me it’s about the team.  I think we, in the last seven years, have taken the business to another level, and professionalised it maybe a little bit more.  We still have many challenges and that’s the exciting part in terms of the opportunities, but I certainly left a wonderful team behind – albeit that I’m not going to be leaving completely.  There’s a very strong team for the new incumbent to take over, so Spar is in good hands.

ALEC HOGG:  Wayne, you’re not the first Chief Executive who’s had problems at home with partners and yet, you’re one of the first that I know who is stepping down because of it.  What shaped your decision?

WAYNE HOOK:  Alec, without getting too emotional about it: for me it’s a question of saying ‘in Spar you’re the CEO.  You can’t do that job at 95 percent’.  Let’s be honest.  I found out about my wife’s situation where the cancer has come back a second time, about three months ago, so I’ve had to make some adjustments to my lifestyle.  When I say that, I mean my travelling arrangements and things like that – minor adjustments – and I could carry on and do the job.

However, I personally cannot give 110 percent and the Spar Chief Executive needs to give 110 percent to the job.  It’s as simple as that.

I have a greater priority at home and I’m fortunate enough to be in a position that I can make that call.  Many people are not as fortunate.

ALEC HOGG:  What motivated you to do that?  What kind of thinking did you go through before getting to that decision?

WAYNE HOOK:  The worry for me was the company.  What’s going to happen after me?  Who’s going to take over?  We’re gearing ourselves and we have succession plans in place.  That is, of course, what worries one, but for me it’s simply about being available when my wife is strong.

I simply need to be able to spend more time with her.  It’s a simple as that.

If she’s strong and I need to have the flexibility to go away for a week with her, then I need to be able to do that. As a Chief Executive, I don’t have that flexibility.  I have things like this on, for example and there’s no getting away from it.  It’s just a decision of the heart – it’s as simple as that.