Wells Fargo Capital Finance recently announced that it is unifying its commercial services division. We caught up with Wells Fargo Capital Finance’s Executive Vice President Kevin Sullivan to see what this decision means for the markets Wells Fargo Capital Finance serves.
Why did Wells Fargo Capital Finance decide now was the time to create its Commercial Services Division?
One of the key strengths of Wells Fargo is the broad range of asset based lending services geared toward specific market niches. Within Wells Fargo Capital Finance, there have actually been two separate factoring groups focusing on specific markets. The Trade Capital Division has traditionally focused on providing factoring and trade finance services to consumer products companies selling into the retail distribution channel, while the Accounts Receivable/Purchase Order Finance Division has had a specific focus on service related businesses, such as temporary employment agencies, trucking services, and companies dealing with various government entities, along with a Purchase Order Finance product geared towards helping growing companies finance inventory purchases based upon orders in house. It became clear to us that while the two companies did focus on different market niches, there was also a lot of commonality in what both did.
Combining the companies better enables us to leverage the key strengths of each, while giving us broader geographical reach. On the Trade Capital side, for instance, we now have accounts receivable collection and cash application capabilities in both New York and Dallas, which creates flexibility and the ability to avoid business interruption in the event of any unforeseen events, such as the severe weather that impacted the New York metropolitan area last year.
We also now have customer credit approval capabilities in Los Angeles, which enables us to better service the needs of our West Coast based clients.
How will the new Commercial Services Division be structured?
Stuart Brister, who had previously managed the Trade Capital Division, will now head up the Commercial Services Division. Kevin Gillespie, who had previously managed the Eastern Region for Trade Capital, is now the President of the Trade Capital Division. Dave Ciccolo remains the President of the AR/PO Finance group, while I continue to operate as the Western Regional Manager for the Trade Capital Division. The new management structure, in and of itself, won’t result in much change for our clients at all.
Where the real benefit comes for our clients is in enabling us to move critical services such as credit, collections, and operations geographically closer to their respective companies, regardless of where they are located. It’s also enabled us to leverage the capabilities of a larger sales force that’s more geographically diverse, so that we can better reach companies who aren’t necessarily located in what we’d consider to be traditional home bases for consumer product and apparel companies.
While we find great clients such as La Jolla Group, Neff, Olukai, Stance, Obey and many others in the So Cal action sports marketplace, there are also great companies in places throughout Washington, Oregon, Utah, Idaho and the surrounding states. Our new structure enables us to better reach and service those companies.
Will the new structure change how Wells Fargo approaches its factoring services and the people involved in it?
It will strengthen our ability to provide our services to a broader regional group of clients by bringing different aspects of what we do closer to our clients. Whether it’s adding staff on the West Coast to provide customer credit and operations support for our clients, or broadening our ability to touch a greater number of companies throughout the country through cross training the sales teams of both companies, we think our clients will find the changes to be very positive.
What benefits will having a Commercial Services Division bring to Wells Fargo clients in the action sports/apparel/footwear markets?
The action sports marketplace remains a very vibrant, fast paced world that continues to sell product to a diverse range of customers. Unlike other apparel segments that might be heavily focused on the major department stores, the specialty store customer base remains vital to the action sports marketplace.
What the creation of the Commercial Services Division enables us to do is provide a more localized level of service to our clients, particularly on the customer credit side. When you combine that with our ability to provide credit and collection services to companies of all sizes, international factoring, trade finance, as well as all of the other financial services provided by Wells Fargo, we believe that it creates a great environment in which our clients can grow and thrive.
