by Patricia Sellers
Have we really hit bottom? Sandra Horbach, who heads the consumer and retail group at private equity giant Carlyle Group, says we have.
Horbach and I chatted on stage this morning at the Women's Alternative Investment Summit down on Wall Street. "Trailblazers Discuss the State of the Market," the organizers called our session, suggesting that we both have survived cycles and seen a lot. Yes, we have. Horbach, who started her career at Morgan Stanley (MS), spent 18 years at Forstmann Little before moving to Carlyle in 2005. (Meantime, I've been at Fortune for 25 years.)
At Carlyle, where she oversees a portfolio that includes Dunkin' Donuts, Horbach operates out of an office right next to one of the all-time maestros of managing through tough times: Lou Gerstner, who turned around IBM (IBM) after stints atop RJR Nabisco (RAI) and American Express (AXP). "There are good-time CEOs and bad-time CEOs," Gerstner has told Horbach many times--and yes, she heeds his advice.
As a senior advisor at Carlyle, Gerstner was gloomy and cautious earlier than most investors, Horbach explained. And in line with his thinking, Horbach's consumer/retail group has bought no companies--zero--in the past couple of years. While credit was tight and asset values were tumbling, "bad-time CEOs" ruled the roost. Or at least these sorts of take-no-prisoner cost-cutters were favored to run Carlyle's portfolio companies.
But about six months ago, Horbach says, Gerstner and a few others at the firm began urging a shift from defense to offense--to look for growth and start doing deals again. So, yes, the "good-time CEO" is back in vogue. Though, importantly, a new breed will be in demand. That is, CEOs who understand how to build the top line and do add-on acquisitions. Horbach predicts that we're in for a "revenue-less recovery."
Later on Postcards: more insights and outlook from Horbach. Stay tuned!
That whopping reduction that Citigroup (C) announced Monday -- 50,000 jobs, representing 20% of its work force -- turns out to be the biggest cut by a corporation in 15 years. So say the job-trackers at Challenger Gray & Christmas. The largest reduction before Citi's: IBM (IBM), which set out to eliminate 60,000 jobs in 1993.
Vikram Pandit's shrinking of Citi -- part of "one of the greatest transformations in history," MOREPatricia Sellers - Nov 17, 2008 6:27 PM ET
It's been 15 years since IBM (IBM) set what was then the record for the biggest annual loss in U.S. corporate history. Today, thanks to growth in emerging markets, Big Blue is one of the tech industry's big success stories -- and is expected to report healthy second-quarter sales and profits after the market closes today. IBM is also one of only four stocks on the Dow 30 that are up over the past year (the others are MOREPatricia Sellers - Jul 17, 2008 12:10 PM ET
"Culture is what people do when no one is watching."
Former IBM (IBM) CEO and chairman Lou Gerstner, now chairman of private equity giant Carlyle Group, at the recent Yale CEO Summit in ManhattanPatricia Sellers - Jun 18, 2008 7:23 PM ET
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