core relationship banks’.^9 A delighted Andrew Higginson claimed that ‘this
represents our banks’ endorsement of the longer term plans for the group.
The fact that we have been able to arrange five year funding in the current
financial markets, and given the state of the retail sector, is a strong vote of
confidence.’^10
Another upbeat press release was issued a few weeks later when, on 19
March 1992, Laura Ashley and Federal Express Business Logistics jointly
announced that they had formed a ‘Global Alliance’. Together they would
restructure and manage the flow of goods and information within the
Laura Ashley supply chain. The alliance, agreed in principle during a tele-
phone call from Maxmin to a long-standing business contact, Tom Oliver
(Senior Vice President of Federal Express), had taken five months to final-
ize. Under the terms of the agreement, Laura Ashley would turn over its
entire logistics operation to its new partner. The spirit of the alliance meant
that this would be an open-book agreement, with both parties sharing
financial and strategic planning information. A representative of Federal
Express would also be present at the meetings of Laura Ashley’s Global
Operations Executive. The partnership would be for an indefinite period,
but for a minimum of 10 years’ duration, and would be worth an estimated
£150 million to Federal Express. In return, they would supply the logistics
and stock management systems that Laura Ashley so desperately needed,
upgrading its capabilities almost immediately and reducing its operating
costs in the longer term. Products could be delivered quickly and effi-
ciently via Federal Express’s own global air network, thus enabling Laura
Ashley to reduce its cripplingly high stock levels, while significantly
improving the quality of its customer service.
The same spirit of partnership and long-term cooperation was evident
later that year when Laura Ashley signed a multi-million pound deal with
ICL, the Anglo-Japanese computer manufacturing and services company.
ICL would develop the software and provide the hardware to progres-
sively upgrade Laura Ashley’s management information systems. In addi-
tion, they would assign 10 members of staff to coordinate the project from
Laura Ashley’s offices in Maidenhead. Laura Ashley had approached both
of its existing suppliers – IBM and Siemens Nixdorf – but as Higginson
explained, ‘We had extensive talks with IBM and it was quite keen to do a
deal. But IBM shied away from giving us a turnkey solution. We were
looking for more than a “we will sell you this and walk away” attitude
from suppliers.’^11 Siemens Nixdorf were rejected because of questions over
their long-term commitment to the retail software market.
So far so good
In April 1992, Laura Ashley announced its trading results for the first six
months of Maxmin’s tenure. The results, though not dazzling, were never-
Creating and implementing relationship marketing strategies 445