Thread regarding Follett layoffs

One of the underlying problems is that the Marketing team (headed by a Family member) tends to work out horrible contracts with schools. Which is why Follett Retail will be bought B&N

Follett reached a new low. They eliminated the employee anniversary luncheons and token gifts. I guess they really don't care.

The problem is Follett Retail sales are 60% of what they were in 2012. Follett is still staffed at EVPs, SVPs, VP levels as if are sales were still at 100%. The rest of the employees are right sized through 10 years of layoffs at other employee levels.

@5fsl+15f0h1tC ...

• This is not uncommon, many company’s did this such as massive retailers, airlines, etc.*

You mean like Sears and Kmart?

Is that why the family recruited the Sears, Kmart team for the brilliant job they did with Sears and Kmart?

Are we headed to bankruptcy being lead by experts? Should we be looking for leaders from JCP next?

Reminds me of family owned Schwinn Bicycle company, world leader in bike manufacturing until the 5th gen of the family took over. In a few short years was driven to sell it's last asset - it' name - the family fought for years in court to pick the bones of what was left.

All one has to do is take a look at the organizational chart from top down to see the multiple layers of EVPs, SVPs, VPs. Enough said.

So lack of adoptions, sell thru decreasing, and other external factors should not be considered in why Follett had to reduce? If you were ownership, and saw the performance, how much would you invest back in? I think it’s been pretty generous given our financial performance. This is not uncommon, many company’s did this such as massive retailers, airlines, etc. to stay afloat. Follett provided what it could for the employees that were out of work when other companies just said good luck. As for those in charge, please show the 95+ number with Pres in title, I think you are not fact checking. Lastly, you are spot on with contracts, NYU is another that needs to go. There are still family in the business that do very much care about team members and want what is best for the team.

Only the government will cut these bozos a loan at this point their credit is in the c-apper.

Something is not adding up here. The family bought Baker & Taylor which was on the brink of bankruptcy at least twice. The family can invest tens of millions in capital budget. They can't afford full time associates, they can't pay raises, benefits and 401k match. They family isn't taking dividends on the Family stock (not the Phantom shares the family grants to outsiders from the family). They can afford to hire more VP's and promote the best and brightest to VP positions. They could afford to remodel someone else's property (aka the Ivory Tower) to the tune of as much as $50,000,000.00 so it was better than Google - I heard that first hand by a senior VP. Sorry, I'm sure only the family really knows what the state of the company is. Good luck getting into one of the top secret Follett Family Meetings!

Don’t you just love our great company culture? An e-card for everyone. There, all better now!

This family inherited the business. Please describe their risk? Please describe what earned capital they have leveraged to acquire the business. With risk comes reward, right. When I worked under follett's yoke, I risked 100% of my lively hood. I was rewarded with more than 20 years of employment. The final 2 of which were torturous. Abuse was transformative and career ending. Who risked more?
Op-ex and Cap-ex don't belong in this conversation. Cap-ex is a function of good operations. The more profitable is the more it can devote to innovation and keeping tools current. A business should put some of the company's earnings back into the company. A company with good credit can issue bonds so they may take on large projects with borrowed money. That money is repaid through operational profits. If dividends are taken, but investment into the business is curtailed, where's the risk?
So, what has the family risked? They were born into a business. They have adopted a business model to buy captive markets by paying for remodeling and taking on operational expenses of thousands of college and university bookstores. They did adapt to a changing market (the captives weren't as captive as they once were). Yes, there is an expectation of return on investment. Risk gets reward. Meanwhile, the front line workers have seen benefits cut, jobs lost, increased abuse and demands. Who is risking what?

One of the underlying problems is that the Marketing team (headed by a Family member) tends to work out horrible contracts with schools. The MYP's are compensated by the amount of deals they make, regardless if it's in the best interest of the company. All the executives were patting each other on the back when they signed VTU. We were told this would be a $ 32 million contract. Follett wrote them a check for a million dollars and then spent three million on remodeling all the campus stores. So after all that spending how do you make money if your commision is 22%? Yes, 22%! First year sales ended up being between $16-18m, not 32. That is why store personnel is being paired down to the bone. Follett signs these horrible deals and then the store staff is blamed that they are not profitable.

I like it when someone uses “we are all in this together”. Really?? Is that why we have 95+ people with president in their title? A number, by the way, that has been increasing while the rest of the team has been decreasing!! Is that why we are not allowed to communicate with person Instead of blind emails?

I do like the comment about how PC was overmatched with the retail way of thinking. PC came from a company who is very good at meeting their clients needs. And as pointed out, we go with the leadership that came from a company that was driven into the ground. It really shows how the family is thinking and what they think about the team outside of the executive suite.

Capital dollars are often debt funded. The idea is that they will provide a long term return on investment, and the capitalized asset can be depreciated over a period of years, so the future tax deduction offsets future debt service.

Funding operating costs like payroll on debt is a really bad idea because it is not sustainable. It is like living on your credit cards, where the ever increasing debt and interest associated with it will eat you alive.

So in a privately held company, monies allocated for capitol improvements cannot not be reallocated for labor dollars?
Interesting.

Both groups have valid points, though capital cannot be used on labor we know what you are saying. Still though, the family is not deciding what that capital is being used for, that’s leadership. So the family is being attacked because they provide capital but then leadership is not allocating properly in your eyes? I do know that the majority of capital is used for store renovations/improvements, not HO. It’s used for application development to assist the stores. An example is Discover Adopt, if used it assists the store with adoption collections. Shop by ID/Author helps stream line the course material process so less time is spent helping student navigate the aisle.

And as another string said, most of the HO has been furloughed, temp lay-off, or reduced, also. We are in this together.

Also, I know they invest tens of millions because that’s called capital.
You KNOW? REALLY?
Could you give us an accounting for how the 10's of millions have been invested?
Seems like they haven't invested at the store level on human resources because all the FT, long time associates have been RIF'ed. You know why they call it human resources? Because your associates are resources just like store fixtures, printers and fancy high tech HO conference rooms - that's better than Google!

There is a reason the MLS is gone and I will leave it at that.

To @2dnx+15f0h1tC

I have no special powers or insight, it has been said by PC and also in conversations at office and in field. Family did not get dividends and has not. Also, I know they invest tens of millions because that’s called capital. That is what is invested into store redesign, Discover, eComm, POS, etc.. All the above is pretty public knowledge.

I have no affection one way or another, but if you were them would you not expect a return? At the end of the day is it not a business? Shareholders of public companies would expect it so why not private?

Hey, @2dnx+15f0h1tC
Where's you "real name"? How do you posses 1st hand knowledge about the family's expectations? How did you acquire license to scold anyone who has been abused, had their salaries cut, had their benefits taken. From where, in the organization, can you KNOW what the family's worries and investments are WHILE knowing what front line people have to deal with? What fence to you straddle?
From what unique perspective are you able to forgive the family, and condemn people who read and post here?
Uniquely signed, the ghost of JD

I don't begrudge the family for wanting dividends from their company. They are owners of a company that is in the business of earning profit. With that said, my issue is them hiring executives off of the trash-heap called Sears Holding. They have been backward-thinking for the past 20 years and only Eddie Lampert is keeping them on life-support. But yet the Follett family find value in hiring and promoting former Sears/Kmart executives. Why? Why? CW walks around the corporate office carrying a big 3-ring binder with papers hanging out. Is he doing that for his cardio workout. What do all those papers say, "pick up eggs on the way home'? JH is good is pointing to a problem but has no idea how to solve them. Follett needs INNOVATIVE THINKING, not retreads from a dying company (Sears). PC came from a successful company (Sodexo) but he was overmatched by the static thinking of the faux Sears team. If Follett wants to be successful, they need to get rid of the Sears coalition.

MLS - My only job is to make Follett shares worth more.
She did not say, my only job is to grow the company
She did not say my only job is to improve the customer's experience.
She did not say my only job is to offer new and innovative solutions for schools and students.

That was the stated goal from the new CEO in what, 2014?
The Chairwoman stood by on the same stage and smiled and nodded her head.

When has the focus changed and when will it be stated to those of us left?

We've seen massive RIF's and massive hiring of senior management at the HO.
In the stores - the actual profit centers of the business - we have had RIF's of dedicated experienced associates and told to make due with PT help that aren't invested in serving our clients at all. Do more with less.

How about the current Chairman come out and state what you've claimed?

Family isn't collecting dividends. Family is investing millions not in HO executives but in the grass roots of the business to grow the business. We're focused on new ways to serve our schools and students. We're focused on minimizing the amount of admin paperwork at the store level to better serve our schools and students needs.

@2dnx+15f0h1tC

I know for a fact that the family has not, and has no plans to receive dividends given the current state.

They do care but this is also an investment, without liquidity, for them so I am not sure why people poke fun of the dividends. If you had any credible knowledge, you would know that the company has not performed in years based on declining course materials sales yet the family still invested tens of millions in capital each year to better it and allow team members the opportunity to turn it around. That is hundreds of millions that could have been invested in other industries, companies, paid out to them, or just put to work in the markets for a better return and much less risk but they support the business and people.

If you want to spread poor culture and mislead people so they get upset and angry, go work somewhere else or at least make sure you are accurate in your statements.

Post your real name, instead of hiding behind the above tag, and happy to reach out to you directly to explain what you seem to not understand.

Phantom shares don't count. If you're not a family member, that's all you got
Fact check.

@2dlo+15f0h1tC

Given that I am a long time employee with shares (same as family), we have not been paid for the last few dividends so I do not need to ask TL. ALSO, it’s paid out quarterly, not monthly.

That being said, you ( @2dlo+15f0h1tC ) are 100% incorrect and should fact check.

Looking forward to your reply. Please ensure you “@“ me.

Really, you think the family isn't getting their monthly dividends? Most of them LIVE off of that.
Why don't you ask TL if the family isn't collecting their monthly dividends.

Who hired these bumbling id–ts? Who keeps promoting these same people for poor strategy? Why isn’t the executive suite being reduced like the rest of the company? Anyway....I agree, a company needs to be profitable. However, at what cost? One can not demand loyalty and just expect it to happen. Most team members are already going well above and beyond. Yet, we are being reminded daily that we are not doing enough.

@fwy+15f0h1tC

I agree, but probably from a different perspective. Family owned or not, this is still a company that needs to be profitable and the owners expect that. By owners, I mean the same type of owners (shareholders) of any public or private company. Why is Follett any different? Also, when is the last time the family got a dividend. I would bet it’s been sometime given the state of the company and industry.

Instead of being mad at the shareholders, why are you not upset with those above that are not reinventing the company to back it profitable.

You are a controllable expense and nothing more. The quicker you wise up to this fact, the happier you’ll be.

The only focus for Follett is on the share price and the family dividend.