FAMILY BUSINESS: Mail Call

Most businesses in Australia – about 70 per cent – are family businesses.

They control well over a third of the national GDP, employ most of the workforce and usually do the most interesting things, yet we don’t hear much about them. Family businesses tend to go quietly about their business and keep to themselves.

That’s why I’ve decided to start a special weekly series on Australian family businesses, looking at who they are and how they run their enterprises, both big and small. These are fascinating stories of real Australian life, about families and real business: when you read them, you’ll be reading about how most of the Australian business sector operates.

The first is the Pearse family of Sydney, led by Fiona Pearse, 39, and her sister, Emma Cronin, 37, who run a courier business called Mail Call. Recently they launched an offshoot called wantitnow.com.au to service the growing online retail sector, so they are now at the front line of the digital revolution.

Their father Jeff Pearse started the business in 1982. He was trained as an accountant and had been working for Aristocrat Leisure, running the firm’s UK and European operations.

Jeff unfortunately died of lymphoma in 2008, leaving behind a wife, Lexi, and four children – two boys and two girls – and one of the unusual things about the Pearse family is that it was the girls, Fiona and Emma, who took over the running of the business, not Anthony and Patrick.

Fiona and Emma talk about their father with admiration bordering on awe. He left school at 14 and then later put himself through university while working for the Commonwealth Bank, before rising to near the top of Aristocrat Leisure.

In 1981 he and the family returned to Australia where he did some consulting for Wards Express, and realized there were no bicycle couriers in Sydney like those he’d seen in New York City. So he and Lexi sold their house and all their furniture and started Mail Call, with Lexi driving the family Falcon station wagon to begin with and Jeff doing the dispatch.

All new businesses need a break and Jeff and Lexi got theirs during their daughter’s tennis lessons, telling one of the other fathers about their vision for bicycle couriers in Sydney. It turned out he was the head of one of the big advertising agencies and decided to give the Pearses his delivery business – in those days advertising proofs were hand delivered to clients, not faxed or emailed.

So the Pearses started running bikes across Sydney Harbour Bridge from North Sydney into the CBD and started picking up other ad agencies as well. They were off.

The thing about bikes, Fiona and Emma tell me, is that the riders get two-thirds the hourly rate of van drivers and they’re much more efficient because there are no problems with traffic or parking.

Apart from the introduction of bicycle couriers in the first place, Jeff Pearse’s great innovation was the design of a computerised allocation system to replace the old system of couriers giving gifts to the dispatchers to try to win jobs.

Jeff was first diagnosed with lymphoma at the age of 42 in 1987 but thanks to a course of powerful chemotherapy and looking after his health, he stayed alive for another 21 years.

It wasn’t always smooth sailing for the business. In the early 90s Jeff over-stretched by going into interstate transport and taking in equity partners to finance it. The business was placed into administration when the recession hit and the Pearses lost everything.

But the business survived and Jeff and Lexi were able to rebuild. In 1996 it came out of administration with Jeff’s brother buying 25 per cent to take out the financial partners. Jeff and Lexi were able to "buy back the farm” 11 years later.

By that time the cancer had returned and Jeff was once again undergoing chemotherapy. He only had months to live.

Emma was then working at Telstra in retail media solutions, and Fiona was in Los Angeles where her husband was working for Macquarie Bank. She had three children under 5 (now four kids).

They immediately dropped everything and started running the business while their father battled his cancer. Jeff decreed that Emma was to do IT and operations while Fiona looked after sales and finance, and that’s more or less how it runs today. He had set up the structure so that each of the five surviving family members owned 20 per cent, mostly through trusts, and made up the board of directors.

The constitution provides for Fiona and Emma, as joint managing directors, to get a larger dividend than the others, on top of their salaries, although there haven’t been many dividends in the past few years. They reckon the joint MD structure works because each of them has a family and there "bigger things in life”, so they never argue.

In 2007, the year before Jeff died, Mail Call turned over $28 million and Fiona and Emma are confident they can get revenue back to that number in 2013. Profit after tax is about $2.5 million.

And this year they may have had their second big break – online shopping. Having seen what was happening they set up a new division – wantitnow.com.au – and offered retailers three hour delivery in Sydney for items bought online. With that they won contracts for The Iconic and Styletread, two of the fastest growing online fashion retailers in the country.

About 75 online retailers now offer the Pearse’s three-hour delivery in Sydney and they are now spending a lot of time in Melbourne preparing to expand into that city.

Where to from here? Well, whether the business finds its way to the third generation, or is sold first, is hard to say – like a lot of family business owners, Fiona and Emma regard all of their 40 employees as members of their own family, but it’s hard going raising children and running a business.

But for the moment, this is a true family business with a great legacy of innovation and strong family values from Jeff Pearse.

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