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BROOKLYN, N.Y. — Jim Athey has big plans for L&R Distributors. He’s just taken over as chief executive officer following the transition of Marc Bodner to the title of executive chair, and he’s ready to take the company to the next level. Athey spoke with Chain Drug Review about his blueprint for growth, the issues facing the beauty and wellness industry and how L&R can help brands and retailers turn challenges into opportunities.
Jim Athey
CDR: Congratulatons on the promotion. For those who may not know the complete breadth of L&R can you take us through the company?
ATHEY: We’re the leading distributor of health, beauty and cosmetics in North America, and we have been in the business for more than 60 years. We distribute over 40,000 SKUs that are available to all of our retail partners. We serve national and regional players within food, drug, wellness and specialty. In food, we have national retailers like Kroger and Albertsons, and we also have great regional partners like Wegmans, Giant Eagle and Hy-Vee. When you think of the drug class of trade, we work with Rite Aid and several regional chains. We are the exclusive distributor of wellness at Massage Envy.
As we expand our business and our retail scope, we have a mission to reduce complexity for our customers. Our vision is to provide the ultimate shopping experience for every customer’s customer. What differentiates us is our best-in-class supply chain logistics, our in-store services with our 550 field merchandisers who service 4,000 retail stores weekly and our distribution network. In a highly competitive market, we provide a range of uniquely positioned solutions to help our retailer and brand partners profitably grow their business.
CDR: Can you provide a little bit of background on yourself?
ATHEY: I came on board about two and a half years ago as chief customer officer. I’ve been with big CPG companies like Kodak, Revlon and Kimberly-Clark. One of my objectives is to show everyone how we can be a strategic player for their brands. Marc has done a phenomenal job to get where we are today, and he’s going to be supporting our strategic initiatives for the company and supporting organic growth. He’s not going anywhere; we will work together closely as we transition. The nice thing about our leadership is that the people are phenomenal. It’s a great blend of institutional knowledge, folks that have been here and those coming in from CPG like myself along with those with retail experience. We have a great blend of talent that looks at the business from a retailer perspective, from a product or brand perspective and from a distributor perspective … that really separates us from the others.
CDR: Can you dig into your retail support?
ATHEY: We have superior in-store merchandising. We support retailers and augment their store labor, which is a big plus. We have a customer-centric approach. We assist with administration, sales and operations and offer thought leadership with our customers. We have tons of rigorous analytics we can bring to the table and help them be aware of trends so they can plan. We can identify trends and bring them to our partners.
When you think about the category and the challenges retailers face, the labor force can’t always address the beauty space. We can reduce costs from a labor perspective and turn into a category advisor to help boost productivity in a very complex category.
CDR: What about assisting with e-commerce?
ATHEY: We have e-commerce ability in our omnichannel approach that sets us apart. We’ve invested a lot in the e-commerce side. That’s probably one of the biggest questions we get from vendor partners … ‘How can you support us on the e-commerce side?’ Retailers, especially in the food trade class, are doing more with click-and-collect. When you look at brands, many are trying to do more with their omnichannel approach, and we can help in that regard. We can function as an authorized seller on marketplace or as their exclusive seller. We’ve built a full suite of capabilities … from content management … expert digital marketing and social media to even helping brands with the fast-emerging social commerce sales channel … to fulfillment … and to customer service.
We can provide all of that to our vendor partners, which retail helps them drive e-commerce growth. We’ve seen great results, and our business has continued to grow by three times. It is a substantial part of our business, about 5% to 6% of the overall business. The growth is really accelerating.
CDR: Let’s tackle a myth about distributors. Is it more costly to use distributors?
ATHEY: If you look at what we do in stores it is really a cost savings. When I first got this job, I had a different perspective of the distributor model and didn’t understand the value. As I did my research and talked to retailers, I found there is a big demand because we help retailers turn products, especially in cosmetics, faster. We can also handle products in their DC’s that are not efficient for them to manage. The timing is better than ever [for the distributor model] because retailers are looking to become more efficient and effective. Using a distributor is a way of reducing costs in a niche area like cosmetics.
We’ve also been thought leaders for retailers and worked with some that are investing in things like universal fixtures to improve the aesthetics of the department. Universal fixtures make it easier to move products in and out. We help them with our field merchants to face up products, restock products and check the condition of the products. These are all things that are driving sales for them. Retailers had the chance to get more beauty customers as essential retailers, and now we help them keep those shoppers. Strategies like universal fixtures help them capture or convert consumers who are already in their stores. She might not have been shopping cosmetics, but now because of trends and universal fixtures, she might.
CDR: It is a great moment for retailers to capture more beauty sales, with the category showing a great resurgence.
ATHEY: Even with the inflationary impact, the consumer spending on beauty is proving to be resilient. More and more retailers now are continuing to invest in things like our full-service programs and universal fixtures. Those who do are seeing double-digit gains; they are outpacing the category and capturing market share. We are ready to help retailers and brands in all channels produce higher sales. It’s a good time to be in beauty.
