75th Anniversary - (Page 39)

C H A P T E R T H R E E THE TURNAROUND PLAN With the untimely passing of Jay Schein in November 1989, the Company entered a difficult period of mourning, uncertainty and transition. Stan Bergman and Martin Sperber were named co-Chairmen and CEOs of the combined company and, together with Pam Joseph, trustees of Jay Schein’s controlling interest in the firm. They faced an uphill battle to convince some members of the Schein family not to sell the Company and asked for a chance to fulfill Jay’s dream of building a world-class firm, but one side of the family was pressing for liquidity and a solid plan for delivering it within a very short time frame. To make matters worse, the U.S. economy was mired in a deep-rooted recession that had triggered a global downturn. Anti-communist demonstrations were spreading like wildfire across much of Europe, and by 1990 the Berlin Wall came tumbling down, followed rapidly by the collapse of the Soviet Union. And, in the oil-rich desert sands of Kuwait, war loomed on the horizon. WAKE-UP CALL These were, indeed, turbulent times, and the Company’s future looked more uncertain than ever. “What we realized as we began to unbundle the two businesses,” says Jim Breslawski, “was that Henry Schein wasn’t very profitable. All the focus and attention over the last handful of years on Schein Pharmaceutical did a great thing to build the assets and equity in that business—and that eventually turned out to be very valuable for the shareholders of Henry Schein and Schein Pharmaceutical.” But sales were sluggish in distribution—roughly $200 million at that time—and competition was heating up. Overhead costs were increasing at a greater rate than sales, which was taking a huge bite out of profits. As the new Chairman and CEO of Henry Schein distribution, 39-year-old Stanley Bergman needed to set a steady, yet aggressive, course of action that would turn the Company around. It was undoubtedly the greatest challenge of his business career, but one that he felt prepared to embrace wholeheartedly—with the right support. He started to flesh out his new executive management team, which included Jim Breslawski heading up dental; Gerry Benjamin heading up operations; Michael Zack in international; Steven Paladino in finance; Leonard David as in-house counsel; and the elder statesman of the team, Eddie Cohen, heading up purchasing and inventory management. Harold Tanner, an investment banker with Tanner & Co. (and former Managing Director, head of corporate finance for Salomon Brothers), was also brought in to evaluate the two businesses and help guide Facing page. Turnaround time. Stanley Bergman addresses Team Schein Members about the Company’s future. Top. Up to the challenge. Stanley Bergman and Pam Joseph motivate Team Schein Members. Left. Seasoned businessman. Experienced Eddie Cohen was a vital member of the new executive management team. 39

Table of Contents for the Digital Edition of 75th Anniversary

75th Anniversary
Table of Contents
Preface by Stanley Bergman
Chapter One: Planting the Seeds
Chapter Two: Jay—A Visionary Ahead of His Time
Chapter Three: The Turnaround Plan
Chapter Four: Building Castles in the Sky
Acknowledgement

75th Anniversary