An in-depth conversation with Dave Peebles

BY MORRIS R. BESCHLOSS
PVF and economic analyst

David Peebles retired CEO, Ferguson

One of the benefits of having been actively involved with our industry for more than 50 years is the great personal associations that such opportunities provide.

Sharing these relationships with our readers also provides today’s industry activists with the history of the great leaders that “made things happen” originally and whose influence permeates our $60-billion PHCP industry.

Among the greatest -- and who I had the privilege of getting to know soon after I cut my teeth in the business with Hammond Valve -- was David Peebles. Being contemporaries, we got along really well from the very beginning. At the time of our first meeting in the late 1950s, Peebles had built a single-branch supply house in Virginia Beach, Va. But I recognized right away that this man was driven by an all-consuming ambition to excel.

Little did he know that the company he was primarily founding would far surpass his fondest dreams. With Dave as the driving force, a working relationship was formed with Ralph Lenz’s Lenz Supply and Crossroads Supply’s Johnny Smithers and Charles Ferguson, for whom the embryonic super giant was named. Ironically, Ferguson did not live to see the significant growth of the unprecedented distribution titan which carries his name. He died shortly after its formation.

Although the dynamic course of Ferguson was set by Peebles, he wisely decided to bring Britain’s Wolseley into the picture in the 1980s. This massive financial infusion gave Ferguson the impetus to expand its acquisition campaign at an unprecedented pace.

It’s variously estimated that Ferguson controls in excess of 15% of the phcp business in the U.S. and Canada. However, Ferguson continues an orchestrated campaign to grow its distribution ownership, especially in the area of pipe-valve-fittings.

To get the founder’s perspective and find out what he’s up to these days, we are privileged to share this exclusive visit with you.

Beschloss: Although you retired from active management with Ferguson some years ago, I understand you are involved with several “replacement activities.” Could you tell us about them?

Peebles: When I retired from Ferguson, I realized I had been a tremendous influence on the vision, dream and what I anticipated Ferguson would be accomplishing in the future. But there is a time for all leaders to depart from the spotlight. When I ended my tenure as Ferguson CEO, I did not want to be present for any further deliberations in which I would be asked to participate. I certainly wanted to make sure that I had no opportunity to micro-manage the outstanding leadership that I had trained and put in place. I had always had a real interest in antiques and historic preservation and it was something that my wife, Mary, and I could both enjoy and work on together. I had no intention of permanently retiring, just simply initiating another chapter in my life.

I love my farm. I’ve enjoyed the civic work, particularly in the educational arena. Our antique shops have allowed us to develop another wonderful group of friends and customers with a common interest. I’m excited every day I live, still get up early in the morning, and I do follow my associates at Ferguson. They are very kind to include us on all special occasions and I shall always support them in any way I possibly can. I do this without looking over their shoulders or being critical in any way. I served my time with a lot of pride, and today I am bulging with that same pride of what the generation to follow continues to accomplish.

Beschloss: Knowing that you and your beautiful wife Mary have two sons and two daughters, are any of them headed for our industry?

Peebles: No, Morrie, I think one of us was enough in our industry. I have two wonderful sons and daughters and their families, and they’re all great. But they have their own unique professions and interests.

Beschloss: I’m sure that Ferguson’s present size and industry importance has exceeded your fondest dreams. Where do you think this stupendous growth is finally headed?

Peebles: I believe Ferguson and the Wolseley organization will continue to grow dramatically in North America and Europe with a broadening of their products and services. In my early years I knew that smart people make smart decisions, and so we spent a lot of time recruiting the very best and fortunately it has filtered out into our industry.

Beschloss: In case anyone doesn’t know you were the architect of growth from within, most of the leadership managing Ferguson today came through your “apprenticeship programs.” Is this program still intact?

Peebles: Our training programs are some of the best in corporate America with very high expectations and standards of excellence and performance. It not only is a case of learning the business, but also leading and teaching others to develop leaders in every product line at every stage of our development.

Beschloss: Everything I hear is that the relationship between the Newport News and London operations is exemplary. With Charlie Banks and Chip Hornsby having been in the leadership ranks of Wolseley, there is no greater compliment to the superstructure you created. Do you agree?

Peebles: I think it is a great credit to Ferguson, our training program and caliber of recruiting that Wolseley, a British company, reluctantly tapped Charlie Banks to be the managing director of the parent company Wolseley. Charlie had earned his stripes in every regard — not the least of which was his impeccable integrity and impatient desire for stellar results, which make for happy associates and happy customers and ultimately happy shareholders.

Chip Hornsby, his successor, is the best of the best. I knew his parents and his grandparents, and unquestionably he was the greatest combination of them all — and they all were wonderful people. Chip is truly a leader whose greatest accomplishments include the training of an outstanding group of leaders across the Wolseley organization. There is depth in Ferguson, talent with the recent appointment of John Stegeman as president of Ferguson Enterprises, and Frank Roach as CEO-North America.

Beschloss: What is your opinion of buying groups and master distributors that are flourishing alongside Ferguson’s meteoric growth?

Peebles: I’ve been away from the business for a while and I’m sure that buying groups and master distributors have their place in our industry and will continue. However, it simply is a case where we want to be responsible at all levels for our continuing growth and development. We try to put together the very best ideas not only of our industry but all industries. We have made magnificent innovations in taking costs out of distributing the product, and at the same time serving the customer beyond any expectations.

Beschloss: Are you concerned about Home Depot’s intrusion into the industry’s traditional distribution channels, such as their acquisition of Hughes Supply?

Peebles: I guess Home Depot and others have to do their thing. I would imagine, initially at least, there is a substantial culture difference between Hughes Supply and Home Depot.

Beschloss: Are you still bullish on the future of the PHCP industry’s growth?

Peebles: I am very optimistic about the opportunities in our industry. A sharp change has occurred over the 50 years that you and I have been associated in the industry and our customers have made many hard-earned dollars and cents available to us for value of service and availability of product. American industry has known it for a long time, but in recent years our plumbing and mechanical contractors have bought into this change with dramatic enthusiasm.

You can build big warehouses but you’ve got to have an organization that develops a genuinely loyal following among its contractors, builders and, ultimately, the consuming public. You don’t chase orders; the chase is for loyal customers. You don’t have to be big, but you have to be good in all of your daily endeavors.

I learned early that you can’t dabble only in a segment of the business. The spectrum of our business has grown many times over, and you have to make the same commitment of resources and competent training to every segment of your business and customers.

Morris R. Beschloss, a 50-year veteran of the pipe, valve and fitting industry, is PVF and economic analyst for The Wholesaler.