Sarmi’s Army

This article on Italy’s innovative postal system ran in Fortune. It’s archived below.

June 21, 2006
Sarmi’s Army
Poste Italiane’s CEO and his 150,000 foot soldiers are making money on everything but delivering the mail.

By Stephan Faris

The town of Percile, northeast of Rome, has two groceries, a snack bar, and a tourist booth. Medieval houses climb a hill of overlapping archways and cobblestone footpaths. With only 260 residents, most of them retirees, the town hasn’t attracted a newsstand, much less a supermarket or a bank. But it does have a post office.

For Poste Italiane, outposts like the one in Percile are at once its greatest liability and its greatest asset. Postal companies are by nature spread thin, and the Italian state monopoly is no exception. With 150,000 employees and 14,000 offices, the company says its mail operations lose hundreds of millions of euros a year. But those same offices provide the backbone of a company that offers everything from investment plans to vacuum cleaners.
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