Accenture deal sees 80 year old Kurt Salmon brand leave the consulting stage

23 September 2016 7 min. read

Accenture has acquired Kurt Salmon’s retail and consumer goods business for a reported fee of $165 million. The deal, which bolsters Accenture’s strategy and business consultancy capacities with a team of around 260 retail experts in five countries, including in the UK, may see an iconic, 80 year old brand dropped from the consulting stage.

Founded in 1935, in the US, Kurt Salmon has over the past eight decades grown into an international management consultancy with an established track record. The company – formed in 2011 by the merger of Kurt Salmon Associates and Ineum Consulting* – provides clients a range of strategy and management consulting services, including logistics and supply chain, merchandising and product development and omni-channel retail offerings, among others.

Recent years have however seen Kurt Salmon face choppy waters. The firm struggled with reaping the benefits from its merger, and on the back of growing market pressures, growing unrest surfaced within its partner ranks. In a bid to turn the tide, Management Consulting Group (MCG) – the parent company of Kurt Salmon and Alexander Proudfoot – implemented a number of changes between 2012 and 2015, including an internal reorganisation and the shutdown of several offices, yet, across the board, the bottom-line results remained subpar. By early 2015, Kurt Salmon’s headcount had fallen to around 1,000, down from circa 1,500 at the time of the merger.

Kurt Salmon - Succes for what's next

Behind the scenes MCG launched a process to explore strategic options for the unit, with a divestment a serious card on the table, although the holding company for long rebuffed media reports on its M&A process launch. In June last year, after insiders had revealed that negotiations with two of the Big Four giants were well under way (EY in fact came very close to sealing a deal), MCG came out in the open and in a statement acknowledged that the Board had opened discussions with “certain parties”. Roughly five months down the line a deal was struck with Solucom, which acquired all of Kurt Salmon’s business except the retail and consumer goods advisory units. Roughly 750 consultants in France, Switzerland, Belgium, Luxembourg, Morocco and the US transferred to the French-origin consulting firm (which today operates as Wavestone). 

The deal left Kurt Salmon’s remaining retail organisation (~260 staff) in anxiety, although operations carried on ‘business as usual’. In the US for instance, Kurt Salmon acquired Mobispoke, rebranding the arm as Kurt Salmon Digital, and through its continued engagement work the firm recently managed to, according to Vault, retain its status as one of the globe’s top 25 consulting firms. However it was clear since the split that Kurt Salmon would eventually join a strategic party to leverage scale – insiders close to the matter confirm to that the prey was on the shortlist of several rivals, including three of the Big Four firms and Accenture.

Picked up by Accenture Strategy

Yesterday Mark Knickrehm, Chief Executive Officer of Accenture Strategy, confirmed that Accenture has succeeded in acquiring Kurt Salmon, a move which significantly bolsters its footprint in the retail industry. All of Kurt Salmon’s consultants and staff across offices in the US, Germany, the UK, Japan and China transfer to Accenture and will be integrated into the firm’s Strategy business unit. The move is the second large bolt on for Accenture’s retail practice in the space of 16 months – last year the global consultancy picked up Javelin Group, adding 160 advisers in the UK and France.

Accenture acquires Kurt Salmon

Knickrehm says the deal will boost the firm’s capabilities in the delivery of “end-to-end consulting services to retailers and private equity firms." He adds: "With digital disruption forcing retailers to rethink their entire business and operating models, we expect continued strong demand for strategy consulting services in this industry. This acquisition will enhance our ability to deliver the industry-specific strategies that our clients are increasingly seeking, in order to drive competitiveness and operational excellence at the intersection of business and technology.” Chris Donnelly, Accenture Strategy’s Retail industry lead, continues “Through this acquisition, we will be able to offer our clients a powerful combination of services to help shape the transformation of the retail sector.”

Brooks Kitchel, CEO of Kurt Salmon, comments, “Our retail clients are increasingly looking for agile and pragmatic solutions from industry experts that enable their transformation journey and help them gain competitive advantage. Joining Accenture Strategy will enable us to bring new value to our clients in a collaborative, global and client-centric environment that aligns with our company culture and mission.”

The transaction is valued at around $165 million, and is subject to approval from regulators, as well as that of Management Consulting Group’s shareholders and other custom closing conditions.

The end of an iconic brand

As a result of the deal, the Kurt Salmon brand will, after closing and full integration, likely cease to exist, although a spokesperson of Accenture told that branding decisions are yet to be worked out.

If the brand indeed is dropped, Kurt Salmon will join the likes of several other brands with a long heritage which have recently left the consulting stage. In 2014 Booz & Company was retired from service, after PwC rebranded it as Strategy& (following binding conditions with Booz Allen Hamilton), while two and three years prior to that both Monitor Group and LECG were discharged following an acquisition (now part of Deloitte; ‘Monitor Deloitte’) and bankruptcy respectively. Accenture itself has of late been quite active in the M&A space – earlier this month the firm acquired Redcore, an Australia-based cyber security specialist, and New Energy Group, a Southern European IT consultancy.

* Ineum Consulting was established in 2005 as a spin-off from Deloitte Consulting’s French division.