A violent gust of wind is battering a trendy corner of King’s Cross hosting a showcase event for UK electronics seller Electrocomponents.
Lindsley Ruth, the American boss of the FTSE 250 group, is standing unflinching in front of a 35-tonne bright red truck displaying an Aladdin’s cave of the company’s wares, from electronic Lego toys to 3D printers and VR headsets. Gusts whip around the canvas hoardings outside.
“We’re right in the middle of the wind tunnel,” Ruth hollers over the hurricane, as we stroll to a calmer patch of King’s Boulevard dotted with coffee shops and fashion stores.
The event is designed to present the new face of Electrocomponents: a 21st-century tech distributor tapping into the zeitgeist of DIY engineering and disruptive technologies.
The one-time laggard of British industry is having a major resurgence under Ruth’s leadership, with the share price tripling since he took charge to knock on the door of the FTSE 100.
Unlike many tech businesses, from fintech specialists to blockchain-enabled software developers, Electrocomponents’ business is relatively straightforward to understand.
The group, founded in 1937 in Maida Vale selling radio parts, flogs more than 500,000 different products through its RS and Allied brands on behalf of over 2500 suppliers to business customers like Rolls-Royce and consumers.
The Raspberry Pi — a bargain DIY micro PC used at home and in schools — is its best seller and its vast warehouses ship around 50,000 parcels of everything from sensors to transmitters each day to more than 30 countries.
Some dub it the “Amazon for engineers”, a phrase Ruth says he dislikes, half in jest, because he “doesn’t want to draw attention to them”.
But Ruth has Amazonian-sized aspirations for the company, which he wants to turn into a colossus over the next decade. To that end, he’s moved it from its sleepy old headquarters in Oxford to King’s Cross opposite Google to tap up more of London’s tech talent.
“This area is vibrant and very young. You don’t see too many people in suits and ties around here,” he says as we hurry out of the wind. Dressed in a cobalt blue suit and open-necked white shirt with a paisley collar, the 47-year-old could almost pass for a Silicon Valley venture capitalist.
He may look like a retired rugby prop in his sleek corner office clutching a mug of camomile tea but Ruth sounds all-American, talking with a deep southern lilt, hardened slightly by a career spent working in Texas, Montreal and California (he did actually work in Silicon Valley for a time).
Born in Kingsport, Tennessee, he now lives in much different surroundings: Hampstead, with his wife and two dogs, a wheaten terrier and an Australian shepherd called Ben and Bella, which they walk on the heath. His two kids are at university in the US.
Since taking over the top job in April 2015, Ruth has helmed a remarkable turnaround.
Growth at Electrocomponents had slowed to a snail’s pace, and a profit warning had taken the wind out of the group’s sails.
He says the company acted “more like a government agency” than a business when he took over and was “paralysed” by fluffy mantras and management speak.
On one of his first days at the company’s office in Corby, for example, he strode through the corridors and discovered 22 meeting rooms filled to the brim with people. An encouraging sign, he thought, at least we’ve got customers and suppliers visiting us. But it was not the case.
“I was leaving that day and I asked Dean, our security guard at the front desk, how many customers and suppliers were in here today. There were zero. They’re all internal meetings. Every meeting was an internal meeting,” he recalled incredulously.
He quickly shook up the company, introducing profit and loss accounts, firing much of his inherited executive team and slashing costs. It seems to have paid off: growth now runs at about 10% versus 3% when he took over.
But it was not without its difficulty. Ruth says the toughest part was firing people. “I have a philosophy that you should always be slow to hire and fast to fire. People decisions are always the most difficult moves and always will be. If you become numb to it, you need to go somewhere else,” he says.
Now firmly on the front foot, organic growth is the plan, plus small bolt-on acquisitions and a bid to crack the lucrative Chinese market.
“Every 18 months that have gone by I tend to adjust my numbers a little higher. When I see what the opportunity is I get even more boundless,” he beams.
To start with, Ruth broke the mould in May by making Electrocomponents’ first takeovers in nearly two decades with a £88 million swoop for Manchester-based IESA.
Unlike most chief executives, he’s frank about two American firms on his shopping list: Digikey and Warren Buffett-owned Mouser, which coincidentally was the first company Ruth ever worked for.
“We’d love to buy Digi-Key but they’re not for sale,” he says wistfully of the group which notched $1.8 billion in sales last year. “The queue would be round the block.”
What’s intriguing about Ruth is why he took the Electrocomponents job in the first place.
Originally he had turned down the idea after top City headhunter Luke Meynell approached him on behalf of the firm. At the time he was right-hand man to multi-billionaire Bob Miller, founder of Canadian electronics distributor Future Electronics; many saw him as the successor to Miller, plus he’d never worked in Europe before or for a public company.
However, he warmed to the idea once he’d spent four hours meeting chairman Peter Johnson in Sloane Square during an impromptu New Year visit to watch football with his son.
“I was really, really impressed with him,” he recalls. “He had a great pitch and I got on with him really well. In talking with the kids and my wife they said it would be really cool to live in Europe. It was an opportunity to do my own thing.”
Larger, long-term shareholders, which include the likes of Silchester Partners and Columbia Threadneedle, are happy with Johnson’s choice.
The shares, which were at 250p when he took over, now trade at 720p although some analysts are wary of the company possibly being overvalued.
Despite its comparison to Jeff Bezos’s retail giant, Electrocomponents’ biggest threat could well be Amazon, according to city analysts. But Ruth says Amazon’s reliance on third-party distributors and sellers means it is unlikely to mean it usurps Electrocomponents.
“In the world of electronics you need a birth certificate of the product, you want to know the mother and father. If you don’t, a counterfeit product can get into the supply chain. That happens quite often. There have been challenges in the US recently with various counterfeit products getting into the supply chain. It’s quite dangerous.”
Originally planning to stay at the company for five to seven years, he now thinks he would be up for staying a decade if things go the right way because he likes London so much.
“If the weather’s good I actually love walking throughout London. I love going to Camden market, Borough market. We’re big foodies so I love to cook,” he says.
His favourite haunt at the moment is a restaurant called Osteria Ovada in West Hampstead.
“The guy who owns it is the waiter and sometimes he cooks, he asks what you’re in the mood to eat. The food is really, really good.
“We were there a couple of weeks ago and me and my wife had a bottle of wine, we started with a platter of vegetables, she had the ravioli and for two people it was £40,” he beams. He may have earned £4 million last year but that doesn’t mean he can’t spot value.
And the best place in King’s Cross?
“The German Gymnasium is not bad. They have probably the best chicken sandwich in London. It’s the mustard dressing, I tell everybody to go and try it.”
Possibly, when it’s not blowing a gale.