Henry Nasella

Henry Nasella

Henry co-founded LNK in 2005 and has over 25 years of operating experience and 21 years of private equity experience in the consumer and retail sector.

Henry is currently non-executive Chairman of PVH and serves on the Board of Directors of Schweiger Dermatology and Northeastern University. He has previously served on the Board of Directors of Ariat, Natural Food Holdings, Au Bon Pain, Staples, Panera Bread, Denny’s, Spyder Active Sports, Ulta Beauty, and Blinds-To-Go. Henry received a BS from Northeastern University, where he is a Chair Emeritus and Trustee.

Transcript

Maureen Farmer

This is Maureen farmer and I am the host of the get hired Podcast. Today it's my pleasure to introduce and welcome Henry Nasella to our podcast. I'm going to read Henry's bio, and then we're going to have a conversation about the exciting and very secretive world of private equity.


Henry co-founded LNK in 2005 and has over 25 years of operating experience and 21 years of private equity experience in the consumer and retail sector.

Prior to LNK, Henry was a Venture Partner at Apax Partners, where he was a senior member of the U.S. Consumer and Retail Group.


Before Apax, Henry led the successful buyout of Star Markets, a regional supermarket chain, and served as Chairman and CEO of the company until its sale to Sainsbury Plc.


Prior to Star Markets, Henry was the first President of Staples (NASDAQ: SPLS), where he built the company from a startup into a global leader in office supply retailing.


Henry is currently non-executive Chairman of PVH. And I'm going to say what that is, so people will know—Phillips Van Heusen and serves on the Board of Directors of Schweiger Dermatology and Northeastern University. He has previously served on the Board of Directors of Ariat, Natural Food Holdings, Au Bon Pain, Staples, Panera Bread, Denny’s, Spyder Active Sports, Ulta Beauty, and Blinds-To-Go. Henry received a BS from Northeastern University, where he is a Chair Emeritus and Trustee.


LNK partners with proven management teams they believe in, and they work hard to support them in any way they can as they grow their businesses. LNK can assist at both a strategic level in setting direction and priorities, and a tactical level in implementing the company’s growth initiatives, while maintaining brand authenticity and the company’s culture, and supporting profitable, sustainable growth with the right systems and infrastructure.


So Henry, welcome to the Get Hired Up podcast!

Henry Nasella 

Thank you. It's pleasure to be here with you.

Maureen Farmer

It's my pleasure. We had a conversation a couple of weeks ago about your career, about what you do. I have a million questions, but we don't have enough time for me to ask them all. So, I'm going to ask you, you mentioned before that companies come back to you time and again, for different reasons. Can you explain this?

Henry Nasella

So, I think our whole philosophy of partnership, and really working with companies in a collaborative way over many, many years, has led to us having the opportunity to invest in businesses multiple times. And an example of that—every CEO we have ever backed at LNK partners is a personal investor in one or more of our funds. They obviously don't have to do that. But for us, the partnership goes long beyond just the financial aspect of of a transaction, how much money the company makes, or LNK makes to really, you know, developing lifelong friendships. And I think in business, sometimes people kind of overlook the importance of that. It's given us the opportunity—an example when we were at Apax, we helped PVH Corp buy into Calvin Klein, at LNK Partners PVH was buying Tommy Hilfiger. We help them do that transaction. So, multiple transactions with the same company. Lifetime Fitness was a private company, we invested early in their development, they went public, we liquidated our holdings. And once they became a public company, we've subsequently invested twice more in that company. Now it's a private company, we helped take them private. So you know, the idea of relationships. You know, it isn't a one and done for us. And we think...my partner and I had the philosophy that, you know, you treat people the way you want to be treated. And that's typically a very good philosophy to have and certainly in our business, and personal lives, it's done well by us.

Maureen Farmer

Oh, absolutely. And I really appreciate the relationship focused business ecosystem that you've developed. And just for the listener here, in case you're not aware, I'm going to name some of the companies that you have invested in, operated, or served on the Board of Directors: Calvin Klein, Levi's, Staples obviously, Pepsi, Pepperidge Farm, Priceline.com, Kaiser Permanente, Quaker, Shutterfly, and the current ones we mentioned in the bio, some of them we mentioned, Beachbody Dogfish Head, Fitness Connection. And I think the one that was really quite recent is Tommy John, and that I believe, you mentioned before, is a husband and wife partnership in business.

Henry Nasella

Yes, yes, actually one of my partners....it's interesting. Manny Chirico was the longtime CEO of PVH. And we had a very successful transition there. His successor took over well over a year ago, and Manny joined us at LNK as an operating partner. And given his extensive experience in the apparel industry, you know, Tommy John is a, you know, high end, leisure wear business with a tremendous direct to consumer experience. And, you know, they're just over 100 million in revenue. But unlike a lot of ecomm companies—very, very profitable since their beginning, you know, it made sense that he be involved with that, because he knows the founders very well. And he knows the business. And that's what the founders were looking for—a partnership, not just the financial transaction, you know, most I would say, you know, almost 70% of the deals that LNK Partners has done in the last 20 years have been backing founders, and founders not selling the company,  they're maybe selling, you know, a minority interest in the company, but are staying on and what they are really looking for beyond, you know, liquidity of that is helping them go from good to great. And that's what we try to do. We've got a lot of experience, working with, you know, great brands, and really talented management teams, and helping them scale, not just from a financial perspective, but the people kinds of things, human capital, and the strategic kind of elements and helping them look around corners because we've certainly had a lot of experience in doing that over many, many years.

Maureen Farmer

Well, this is a great segue into this question that I am always curious about. It seems as though LNK and all of its holdings have a very positive employer brand. I do wonder—what would you say are the top one or two things that organizations struggle with post acquisition? So you've brought on a new company, what are the two or three things that need to be kept top of mind after an acquisition, in terms of the people side of things?

Henry Nasella 

Well, one of the things that we do, certainly when we're getting to know a company, and the founders or the business, and trying to understand, you know, really the risk and reward, you know, our investors are typically large universities, pension funds, insurance companies, and the like, that invest money in LNK, with the idea that we're going to produce superior returns for them. But what we do in our due diligence beyond just financial diligence and understanding the management team, the strengths and weaknesses...what we try to align ourselves with is, what are the value drivers? What are the three or four things that really have to be the focus and the priority, and if in fact, those things are accomplished, a value is going to be created. And, you know, we listened very carefully...we asked very good questions. But before we actually agree on a final transaction, and plot your money, one of the things that we do is sit down with the leaders of the company and say, we just want to get this right, these are the things that, you know, we've heard you say, are the most important value drivers. And how can we help you with each of these? Where can we bring value added resources and help and insight and conversation and, you know, the expertise that we have, and we have basically a social contract, you know, the problem with legal documents, in any environment is, you know, that they can only be as good as what they've been written, but it's more important for the two parties to want to actually follow one another and trust one another. And so, what we're always mindful of with our partners is, you know, we're going to have your back, not everything is always going to go as planned. And, you know, when it doesn't, we have to be on the same side of the table, you looking at it through your lens, but bringing our perspective and, obviously, insights. And we're gonna hope you're going to do the same thing for us. Because, you know so many more things than we'll ever know. And whether that's how much leverage to put on a business, whether it's, you know, the decisions when, you know, recessions happen, or COVID happened as an example, none of those things are ever planned. But when they happen, you know, how do you work together. And for us, that's when things can break down. And what we've learned over many years is, if you get that right up front, really the first year 18 months are the most crucial, because if everything is on track, then you know, things are really in great shape and whether it takes an extra year or two to you know, achieve all the value drivers, you know, in 20 plus years of doing this, we've only had one company that actually met or beat its business plan in the timeframe that it said. It usually takes longer. It takes a year or two or three years longer, because invariably something will happen that you didn't anticipate. But you know, the fact that matters is partners, you know, have each other's back. And are transparent, and working together in the most collaborative way possible. We don't run companies, we don't want to run companies. We won't invest in a business if we didn't think that the management team is bankable. But I think that's our biggest learning about, you know, how to create value and avoid, you know, catastrophes, if you will.

Maureen Farmer

Right. You talk about value drivers, what are typical examples of value drivers that are most attractive to you?

Henry Nasella

Well, I mean, in the case of Tommy John, almost 98% of its coming revenue is direct to consumer ecom. And although that's going to continue to be a big driver, some of their value drivers are product extensions, they do very well with men and women, in intimates and so forth. But, you know, with the casualization of America and really the world with COVID, right now there are opportunities in adjacent, you know, categories that their brand can effectively work well in. And that's one of their value drivers—how to develop and test and prove out that the consumer gives them the ability to be successful in some of those adjacent categories. Additionally, you know, they have some retail of their own, but the opportunity to sell in different channels, whether it be department stores, or specialty stores, and ultimately international because they're, you know, all domestic at this point. So those are the, you know, and as well, building out the team, you know, skill sets that they don't have, those are the key value drivers. So, you know, again, when a business has too many, they have none, because you can't have that many priorities. So what we look for is usually three to five major things that will make the difference, they're still in the same business or category. You know, in the case of Ariat, one of our first investments at LNK, Ariat, it was an English equestrian and Western footwear, with some apparel, but their value drivers were going international, was expanding into denim, was expanding into work other categories beyond just the categories that they were in, and building out their management team for a much bigger platform and a bigger company. So again, those are the kinds of things that, you know, strategically, we try to work closely with the founders, the CEO and the management team to understand, prioritize, understand what the resource restraints will be, and the investments that need to be made along those lines. So that we're laser focus, quite honestly, with management, on achieving those things as fast as possible.

Maureen Farmer

And speaking of surprises that happen, things like financial crises and global pandemics. I think that this has come up time and time again, the topic of resilience in organizations in flexibility and adaptability. And I know with Lifetime, this is a really interesting brand. Can you talk a little bit about that brand? In that context? 

Henry Nasella

Yeah. lifetime is a very large box. Really, I call it a modern day, middle class, Country Club. You've got somewhere between 100 and 150,000 square feet of all the health and fitness equipment you could ever think of, indoor, outdoor swimming pools, tennis courts.

Maureen Farmer

—daycare, I believe, as well.

Henry Nasella

Yeah, free daycare for any member. Obviously, when COVID hit lots of their locations were closed, and remain shut as different waves of COVID occurred. You know, even when they were open, there were some people, you know, not comfortable with physically going to the club. So lifetime had to pivot very quickly to have a digital solution, if you will, for members that still wanted and needed to work out not only physically but mentally. And they provided that rather quickly as a solution for their existing members. But, you know, how did it impact the business when any business suddenly has zero revenues, or much less than what normal are, yet all the expenses, you know, that maybe the government can continue to operate that way because, you know, they have infinite access to capital or they can run large deficits, but, for-profit businesses aren't in that business. So, whether it was raising additional capital, equity, you know, we invested more, other investors did as well. You know, developing new ways to meet our customers wherever they wanted to engage with us today. You know, lifetime is a public company, and it went public in the fall of last year, very successfully, but it still had the hangover. It's profitable today, but they're probably, you know, 80-85% of pre COVID volume as its, you know, people are getting back there, but at a slower pace. So, it's understanding that Lifetime didn't create COVID, obviously, but it had to learn how to survive within it, and pivot. And as an investor, we also had to do that as well. And part of that came with strong belief in the brand, very strong belief in the management team. And realizing we needed to raise additional capital, long before we would absolutely need it, to make sure if it went longer, or we had another surge, that financial liquidity wasn't going to be a detriment to the continued growth and prosperity of Lifetime. And so we've operated that way. Lifetime is really the Mercedes Benz, if you will, of the health and fitness club industry, and is very strong and doing quite well, and will continue to prosper, but still has some lag from COVID, for obvious reasons.

Maureen Farmer

You mentioned before that there is a perception in the marketplace that private equity companies will acquire distressed assets, flip them and sell them for profit or strategic sale or some other liquidity event, as you mentioned, how is LNK different? I think we have alluded to the fact that you have a relationship based business, but how else do you differ from that model?

Henry Nasella

Sure, we don't invest in early stage businesses, we don't invest in distressed assets. There are no funds that do that. And I can't speak to how successful their tactics are, because it's never been what we've done. And my partner and I both at Apax and LNK...our investment thesis is, we believe in backing brands, because brands have inherent resiliency. And it's really hard sometimes, a concept can come out too soon. And it isn't the the concept is wrong, it's just the consumer acceptance isn't there. And that's kind of tough to get through, it requires a lot of capital. And that's where a lot of ventures fail. So for us, it's about clearly backing a defined and well received and proven value proposition. Secondly, is backing a management team that is from the industry, and is bankable, you know, if we found a great business and a great brand, but the management team wasn't that good, we wouldn't invest in it. Because, you know, the risk of trying to bring an outsider into a new industry, or even into a new company, you know, is fraught, and again, others may take that, and I know, private equity firms, some do that...we don't, because we've learned that that's the second most important thing, the brand, the management team, and the continuity and getting off to a fast start in the first 12 to 24 months. Lastly, is a proven economic model, because what we like to do is back management, in what they've already proven they know how to do, and it usually... with investing in our capital, you know, our average investment is $100 and $150 million in equity into each company that we invest in, the majority of that is usually growth equity, you know, it may pay down debt, it's using money to, you know, invest in capital into certain...whether it's technology, product development, whatever, you know, geographic expansion, those types of things. And those are, for us the most important things along with finally, trust and partnership. Do we have that trust in that person.

So fortunately, we don't have to worry about distressed assets, or, you know, and the other thing that we try to do is, some businesses shouldn't have a lot of leverage. You know, for example, when we invested in Ariat, we didn't expect the financial crisis of 2008-2009, when we saw our revenues basically go flat, and our profits go in half. Fortunately, all we had was an inventory working capital bank line, we didn't have debt on the business, because so much of the capital was tied in an inventory because they source all their products in Asia. So we didn't have any issues. The management team didn't have to run its business differently because we were worried about banks. What we needed to worry about is, okay, how do we make sure that you know, whether it's product flow, the kinds of products that we're selling to our consumers, how we're working with our retail partners, you know, how we're managing the value training and really the value creation opportunities and priorities, and we pushed off launching denim an extra year just because we didn't want management to be distracted, to really focus on our core businesses and core categories. And once we came out of, you know, the financial crisis, it was time to make those investments and grow and escalate. And when we finally, you know, exited Ariat, the revenue had almost quadrupled, the profits had quadrupled, from when we first invested. So those are the kinds of relationships even if there's a bump in the road, it took a little bit longer than what we all thought it would be because of the financial crisis, but at the end of the day, you know, we clearly exceeded our base case objectives, and it was a high performing investment. So, those are the kinds of situation win wins that we like, and when you buy low, you know, you obviously want to sell high, but buying low usually comes with a cost, with a risk. And, you know, those are things that we don't feel comfortable doing, we've never done it. So it's not part of what LNK is all about.

Maureen Farmer

Yeah, no, that's so interesting. And you talk a lot about growth and growth equity. And, and can we talk for a moment about the idea or the strategy of scaling? And, what are some of the predictors of a brand that is scalable, in your opinion?

Henry Nasella

Well, what we try to do in, certainly, our due diligence, when we are meeting with a company, if it's a product company, is understand, you know, who their existing customers are, all the way down from every store, to every account to every SKU where the revenue is coming from, you know, we get nervous about concentration. So if you had one or two very large customers that represented more than 50% of your business, you know, that wouldn't necessarily be a good thing, from our perspective. Too dependent on you know, a couple of people. So trying to understand brand resiliency, and just we are the product and then if there is a license, really, the customers, like I mentioned with Tommy John, we think there's opportunities beyond just intimates for men and women, and sleep, where to be able to expand in this comfort space. Because the company has very high quality, very strong following. All the indications from consumers and customers that we sell through, beyond just direct to consumer gives us a high confidence that this is a brand that has resiliency, that has that ability to grow. And at the end of the day, that's what we're investing in. That's our investment thesis that, you know, the company's at one stage, can we continue to grow it, because that's where the value creation, at some point, whether the company goes public, or whether somebody decides to buy the company as feedback investor, or another private equity firm, what they're going to be judging, you know, the value of that brand is just what did it achieve? How much more revenue and earnings did it create, and what's left? I mean, when we sold Ariat, you know, we had bought a platform in Europe. But, you know, it was really a small part of the business less than 10% of the business. So people saw that as a huge platform, a future growth, we had started to develop work related products, that, you know, whether it's nurses or doctors or, you know, people in the oil industry or whatever energy industry, you know, but it had a lot more opportunity to scale and grow. So, having future seeds of growth proven, because, you know, you're doing it, you know how to do it. It's just now a question of scale—part of how you add value. And where we've made investments...denim as an example. You know, Ariat had never done that before. We did it, you know, we learned from it the first season, you know, wasn't as successful as we had hoped. By the third season, it was highly successful, all it had was upward to the right growth opportunity. So, again, that's how you build...in my view...brand resiliency and future growth. You know, just talking about what you want to do is nice, but, you know, in future investors, whether they're individual investors for a public offering, or whether it's more sophisticated strategic or financial investors, you know, they're going to want to see proof and proof is, you know, what are you really doing, not what are you talking about doing, but you've done it, you've accomplished it, you know, and can it be five times that, three times that, ten times that in the future. That's what gets people excited.

Maureen Farmer

Yes, absolutely. I'd love to go, for a moment, to your career with Staples. You were with that organization for a while, I'd love to talk about your journey because your trajectory is unique. And and I would just love to go there for a few minutes and talk a little bit about how you got to where you are today.

Henry Nasella

Sure, yeah, I had been in the grocery and drug store retail industry, drug companies for a long time. Actually, the founder of Staples was a trainee that worked for me, when he first came out of the Harvard Business School. And we got to know each other quite well. And he ultimately was truly an entrepreneur, he got fired multiple times. Because he wasn't that kind of person that wanted to work in a large corporation. And he started Staples. You know, fortunately, the first store was very successful. The second and third store were not so successful. And that's when he reached out to me about joining him and to become his partner. So, I joined and, you know, really late 86, early 87. At the time, Staples had six locations.

Maureen Farmer

And where were you before then? Where did you come from?

Henry Nasella 

Joel companies had actually been acquired by American stores. And I was running as a president, one of the divisions in New England, and, you know, it was over a billion dollars in revenue, very successful business. But for me, it was an opportunity to be an entrepreneur. Staples was backed by Bain, and many other high profile private equity or venture capital funds. I had always wanted to own my own business or have the entrepreneurial opportunity that Staples provided. And so I decided to join. In the beginning, I mean, I must say to you, after 30 days, you know, I was asked by the founder, you know, what do you want to do? And I said, I want to spend the first months in stores. Well, you know, we need you in the office, I said, No, I want to get as close to where the customer is, I'm going to understand what we do well, and what we don't do well. And what I discovered was, you know, trying to keep inventory on the shelf, or even get it into a retail store was where the store manager spent all of their time, it was a very frustrating thing, trying to predict demand and trying to have office supply manufacturers actually able to ship product ahead of when you needed it. That was a really serious problem. And, you know, it's where the store employees spent all the time, they couldn't spend as much time because the shelves weren't full. And so when I went back into the corporate office after that first month, they really laser focus gave me on what we needed to do, ultimately, we decided that we weren't going to rely on manufacturers shipping to each individual store. So we built centralized distribution centers, so that we could invest in the inventory ahead of time. I remember, early on, you know, my head of merchandising, laughing and telling me that, you know, we audit, a trailer load of a particular item, that was a very fast moving item. And the manufacturer, no one had ever done that before, they thought it was a mistake.

And so, you know, for us, we were used to selling things in pallet quantities and large quantities. And so we needed to take control of our supply chain. And in the grocery industry, you know, grocery industry and drug industry are masters at that, at the retail level. So fortunately, myself and many others that worked with me at Staples, knew how to do it in a different industry. And what we needed to quickly adjust to is to different industry, we have different manufacturing partners, you know, how do we set up the systems and procedures to be able to do the same thing by and scale, you know, or, you know, an example I remember when we first went to Manhattan, you know, the average price for a big stick pen for a 12 pack in Manhattan was 7.99. We sold that for 99 cents in a Staples. Wow. So when a customer came into our store, which was our first store in Manhattan, and saw our stick pens at 99 cents for 12 versus paying 7.99, you know, they understood what rape and pillage was all about from their current supplier. So, you know, one of the fun things about Staples that I enjoyed was in the early three or four years, I never got a customer complaint because, you know, our prices were so good. And the selection was so deep and broad compared to what the competition had been.

Now, what I also learned as time went on, customers became used to that. They expected more so it wasn't just good enough to provide low prices and broad selection. We really needed to provide services that mattered. So, in the early days of staples, for example, we didn't have delivery, you had to come to the retail store, because we service largely customers under, you know, 25 employees sized firms. But we were missing the larger kinds of companies that really didn't have time to go to a retail store, wanted to order either online or via phone and then have it shipped to them. And so we developed that capability as well—Staples Direct, which in the early days was not profitable, we had to learn how to do that efficiently, it ultimately became the most profitable part of the Staples model, understanding how to scale you know, I remember, our technology was innovative at the time. But you know, we quickly outstrip our capabilities. I remember when we were deciding to go international, our first out of the US venture was in Canada, then we went to the UK and Germany and other places. And I remember, you know, the questions being asked is, okay, we're going to bring processes and systems, but how quantified are they? I mean, do we have them all in place. And so learning how to scale given where the growth and the opportunities were in the future, and then not have that muscle as well. And whether it was people, whether it was systems, whether it was the use of technology, you know, where to make the right investments. And in my early days, you know, opening new stores took all the time and resources of the company. When I left, we were operating 200 stores a year. And it was easy. I mean, we had a system, we had a procedure. Because we learned through our own ineptitude in the early days, how to do it quite well. And I think, fortunately, we were very profitable in the early days. We ultimately went public, we learned how to really scale and get the leverage, you know, going direct to consumer worked out really well. In the original days, we didn't have free delivery, you know, you had to pay for delivery. But we quickly learned from consumers that they didn't want to pay for delivery. And once we went to free delivery, our business increased 10 times. And we had to figure out how to make, you know, like Amazon, that work. Okay, financial perspective. So, you know, my biggest learning at Staples, I think would be that being very focused...things move very, very quickly, you're never going to be perfect and never going to do everything at 100%, you know, you're probably going to have to make decisions with 50 to 60% of the data you need. But hopefully, most of those are going to be right at the time. Speed is your friend, moving slowly is an enemy and you have to get really good at it and accept that some things may not work, but recognize when they don't work quickly, stop doing them, and pivot to try to find a different way of doing something.

And I think lastly, all of our employees had equity in the company. So, the success of not only our investors and shareholders, from our success, it really flowed all the way down to every full time employee of the company. And I'm very proud of that, whether it be a full time...I remember, in Long Island, a woman who worked full time telling me that the most important thing she owned was a Staple stock and that her husband certainly supported the family and sending their kids to college, but she was going to pay off her mortgage with the success of Staples. That was our sixth store that we opened. And she wasn't going to sell until much later. And she did quite well. And so when when you win and lots of people participate in that, it's really a great feeling.

Maureen Farmer

Oh, this is amazing. Oh, my goodness, I didn't know these things about Staples, and I shop there all the time. It's great to know and to do you feel that the equity, the fact that employees were able to participate in equity drove their performance?

Henry Nasella

Absolutely. When I went to Staples in the beginning, I remember after my first month in the store, seeing all the things that we weren't doing well that the customer unfortunately, experienced that revisit. I started something with the founder called stake and staples. And every month we revisit every location store warehouse office, in small groups. And basically, for the first half hour to 40 minutes, basically give them a mini report on how the company was doing, what we were planning to do coming forward. And then the last half hour, half of the meeting was...I would ask somebody in the room to do me a favor. Just take a pad of paper and write down every question that's being asked. And so how do we make Staples a better company? And employees would fire away questions. Most of which I could answer, some I couldn't. And I would say, I will get back to you. And what we would do from all of those is summarize the q&a and send it out to everyone in the company. So everyone may not have heard a question, certainly because they weren't in a specific meeting, or even think about asking it. But what it really demonstrated was partnership, that here was your leadership, really caring about what people thought. And I remember, we had a lot of complaints around in the early days that we didn't know what the heck we were doing with technology. And they were right, we didn't, we had the wrong fax machines, machines broke, you know, the thing of the early stages of technology, sure software, you know, before it was easy to download everything. Yeah, it was very complicated. We were selling equipment we didn't even know how to sell. And, you know, I remember bringing that back to our merchants and then saying, Oh, my God. Often when people complain, I said, we need to know this, because they're on the front lines, how do we make their jobs easier? And how do we solve these because these are the opportunities. And so you know, not that we did everything well, or that we didn't make mistakes, we certainly did plenty of those. But I think we had a strong opinion, to want to listen and not be defensive. And so this evolved, as we got bigger, what I would do is have people in different departments. So if you were the CFO, or the head of finance, or the head of distribution, you had to go to a store, you couldn't do it in your finance, we had the store leaders go to finance so that each part of the company had an interface with parts that they normally don't interface with, to hear that feedback. And that really helped the culture. And I think, again, LNK, we certainly look at that—every company has a unique culture, that usually, you know, whether it's formal or not, you know, it's consistent from the top down, and it's living at every level of the company. And great companies have great cultures that really help sustain the success of a business. And, you know, I have a lot of fun, because we were developing it every day at Staples over a long period of time. And I think it had a lot to do with the success of the business.

Maureen Farmer

Have you written about this, Henry?

Henry Nasella 

No, I haven't. 

Maureen Farmer

It feels like there's a book just needing to come out here. This is absolutely fascinating. This conversation is absolutely fascinating. And I've learned a lot from this. Time is marching on here. Maybe I can schedule a time to ask the other 50,000 questions I have. A couple minutes that we have left—I wonder if you might walk us through your trajectory from Staples to where you are today.

Henry Nasella

Sure. After I left Staples, you know, which was early stage entrepreneurial company, certainly lots of risk. It turned out to be, you know, very attractive, the company went public, it went global. You know, I decided to leave Staples, because, you know, I was traveling for 100,000 miles a year. Well, I had a young family and, you know, I didn't want to have my family be a catastrophe of my business and financial support.

Maureen Farmer

Of course, but what a legacy though, Henry, really!

Henry Nasella

Well, I decided that I didn't know what I was going to do. So, I I retired from Staples, I took about a year to figure out what my next venture was. I went to American Stores which owned Star Market, which I had run as president for Jewel companies, and I offered to buy it. I ended up buying it on a leveraged buyout finding a financial sponsor, I put the majority of the money I had made at Staples into that myself. It turned out to be also a very good investment because he later sold it to Sainsbury. But it was a turnaround because, you know, the grocery industry had a lot of competition from Walmart and Target and other players, Costco and the like. And you know, I remember my first days at Star Market when I returned saying, listen, we're not going to be in the supermarket business anymore. And people would look at me well, what do you mean? We are in the supermarket business. No, you don't understand. People have to come here because there's necessities that they have to buy, but I want to create fun and excitement. You know, people don't like to cook, how do we make the perimeter of the store alive and fun and solve the problems that they want? So we had daycare centers in our stores we had pet supplies sections in our store, we had, you know, all prepared meals, we were the first company at the time to have Starbucks. So, the whole idea was how do we create a destination? That is isn't just about the drudgery of food shopping, but it was entertaining, we opened a store in an Irish neighborhood of Boston, and we had an Irish food store in there with specialties from all over the Irish islands and in a fun motif and with people that really understood the products. So it was, you know, creating each individual store and trade area in a very different way turned out to be a very successful strategy, you know, we substantially increased the revenue and profit of the business, ultimately sold it. And then that was it, I didn't want to operate a business anymore. It was during the early time of the explosion of the internet, when Amazon was taking off. A lot of you know, one and done kinds of businesses that didn't make it as well, Amazon and others certainly did. And that's when I met my partner of today, who was at Apax, trying to find an investment in a club. And ultimately, he convinced me to join him at Apax. And we did a few deals there. And then ultimately, we decided to go in business for ourselves doing the same thing—LNK partners. So, you know, the first part of my career was learning the retail and consumer business from the floor up, shop up in all elements of it, then running in the C-suite at companies, obviously, entrepreneurial, fast growth, Staples, going international with it, public, doing a leveraged buyout, and then the world of private equity, which, you know, I was a finance major. So, accounting major, so I certainly understood, you know, financials, but I didn't want to tell companies what to do, I really wanted to understand how to invest in the right kinds of businesses and bring my experience and value to help them, you know, create real value. And so you know, every business we've invested in the CEOs and founders deserve all the credit that build phenomenal businesses, hopefully along the way, my partner and I have helped them a little bit, reach the the goals—Good to Great, which is what we call it. And we think we've done that, but you know, that's really been our objective and what we've tried to do, in addition to, you know, deliver for the investors that have the faith and invest in LNK partners. So that's basically my career. On the side, certainly, I've been on a number of boards, and I've certainly tried to help some nonprofits along the way. And really enjoyed doing all of that.

Maureen Farmer

Well, this is amazing. Amazing. So I have a couple of questions left for you, if that's okay. I always like to ask, what has surprised you the most in your career thus far?

Henry Nasella

From the very early days, you know, my mother and father were blue collar, hard working people. My father, you know, left high school before graduating, went into the Marine Corps during the Second World War, got a high school diploma or equivalency from the military. My mother never graduated from from high school, but they were both hard working people. And I think they imparted on my brother and sister and I, the ability of you know, really keeping your head down working hard, not asking for more until you are comfortable. You had done what you were responsible for. I've always had that philosophy. And as I worked my way up and became more of a leader and a manager of people, the biggest surprise I ever had is that people...I always assumed that everyone did that. And I remember my first job when I was a store manager, and later a district manager, how just really disappointed I was going into a store that wasn't well run, because the manager wasn't living up to their responsibilities. And I was like, how can they not do that? Because that's kind of like, job one. I mean, you know that you have to do it. And it was always easier to go into locations that were well run, versus the ones that weren't, because those were more painful. And I really had to train myself to spend time where I needed to spend time and force myself into understanding conflict. And, you know, not running away from it, but engaging with it, because I think feedback is the breakfast of champions. And I think as long as you're earnest and you know, honest with people...it doesn't always work...some people don't have the capability. But those are the biggest lessons I've learned throughout my entire career and even today as a non executive chair of a board. I think transparency and honesty and you know, having uncomfortable conversations when they need to be had are a must do and they're not fun. But you know, it's been a lot easier for me to do that. But I feel like more progress has been made because of that. Those are the things I've learned the most consistently throughout my career.

Maureen Farmer

Well you are in your parents legacy then because you've learned these skills and this character from your parents and often my children say (they're adults now) they'll say, you know, Mom, that's just common sense. And of course, you know, my biggest surprise going through my career is that common sense isn't always all that common.

Well, Henry, I have another question for you before we sign off. And I would love to know if there is a restaurant or two in your neighborhood or in your area, your city, your hometown, that you could recommend for the listener today?

Henry Nasella

Sure. Actually, in a suburb of Boston is a town called Waltham, Massachusetts. And there's a very phenomenal Italian restaurant called La Campania and one might not expect it to be in a suburb. Certainly it has much lower rent than if it was in downtown Boston. In Boston, another great restaurant is Aquitaine. It's a French bistro. It's in the South End. And that's another favorite of ours.

Maureen Farmer

And is that is that where you're located?

Henry Nasella

I have a house in Cambridge, Massachusetts just outside of Boston and an apartment in New York City. I commute between.

Maureen Farmer

And how are things in New York these days, in Boston? Is it fairly open?

Henry Nasella

Yes, it's getting much better, the mandates are beginning to be lifted. And you know, early on during Omicron, they were both impacted quite hard. They're on the other side of that right now fortunately. But you know, the aftermath. There's lots of storefronts that are empty, certainly retail, you know, high rents, restaurants that weren't able to make it through. But, you know, life I think is starting to get a little bit better. And I'm hopeful with the warmer weather coming in the spring and hopefully, we'll start to learn how to live with this in a better way. And vaccines have been a godsend, thank God. And I know people have, you know, resisted mandates and all those things, but hopefully, you know, we can all live and learn to live to be good neighbors and support one another. Because at the end of the day, that's the only way we get through something like this.

Maureen Farmer

Health is the first wealth I say. 

Henry Nasella

Absolutely.

Maureen Farmer

Henry, it's been an absolute pleasure. And thank you for taking the time to speak with me today.

Henry Nasella

Well, thank you and I enjoyed the conversation and look forward to speaking again in the future.

Maureen Farmer

Wonderful. Thank you.

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