Howdy! I hope you all had a great weekend and are stepping into the week with some momentum. This week, we’re tackling a story that blends heritage and reinvention in equal measure: Royal Mail, one of the oldest postal systems in the world.

After more than 500 years, the British institution is under new ownership. Foreign ownership. For the first time in its history. This is a story about legacy, modernization, trust, and the fine line between preserving tradition and evolving for relevance.

Let’s jump into it!

Royal Mail’s story begins in 1516, when Henry VIII appointed the first Master of the Posts to manage communication across the realm. By 1660, it had evolved into a public service under Charles II, opening up letter delivery to the people of Britain. Over the centuries, the system became a lifeline, carrying correspondence and commerce all across Britain.

For much of its life, Royal Mail was state-run, a national symbol alongside the red pillar boxes and post vans that became iconic markers of British life. Its mandate was clear: deliver letters and parcels affordably and reliably to every corner of the United Kingdom.

But the modern age brought turbulence. Email and digital communication gutted letter volumes, while private parcel competitors challenged its logistics. In 2013, the UK government privatized Royal Mail, transforming it into International Distribution Services (IDS), a listed company on the London Stock Exchange. The move was controversial, with debates about whether heritage should remain in public hands.

The years that followed were rocky. IDS struggled with declining letters, costly pension obligations, and tough union negotiations. Leadership churn and public criticism over delivery performance often overshadowed its attempts at modernization. Still, its role as a universal service provider, ensuring that even the most remote towns received post remained a defining responsibility.

In 2024, Czech billionaire Daniel Křetínský’s EP Group made a bold bid to acquire IDS. After months of scrutiny, the UK government approved the £3.6 billion deal in December, provided safeguards were in place: headquarters must remain in the UK, the Royal Mail brand protected, taxes paid domestically, and the Universal Service Obligation upheld. A government “golden share” was retained, giving veto power over certain changes. Even the powerful CWU union, after years of tension, agreed to cooperate given new worker protections and representation on advisory boards.

By mid-2025, the deal closed. Royal Mail was officially under foreign ownership for the first time in its history. IDS delisted from the LSE, and Křetínský himself became chairman, stepping into the role of steward for one of Britain’s most iconic institutions.

Royal Mail’s latest results provided a glimmer of optimism after years of turbulence. International Distribution Services (IDS), its parent company, reported an adjusted operating profit of £278 million on £13.1 billion in revenue. Its first profit in three years, compared with a £28 million loss the year before. The improvement came from parcel growth, automation, and tighter cost controls, signaling that its turnaround efforts may finally be gaining traction.

Parcels are now the lifeblood of the business. While letter volumes continued their steady decline, down around 4% year-over-year, parcel volumes rose by 6%, driven by the rise of e-commerce and new partnerships. IDS invested heavily in automation: automated sorting now processes 90% of parcels, up from 50% just two years ago. Locker networks and out-of-home delivery options also expanded, helping Royal Mail compete against more nimble rivals like Amazon and DPD. These changes mark a clear strategic pivot away from dependence on letters and toward becoming a logistics-driven operator.

But modernization has not been without trade-offs. Service quality has drawn criticism for years, and regulators have had to adjust expectations downward. In 2025, Ofcom approved a controversial change: ending Saturday second-class deliveries. For many Britons, this move represented a symbolic loss, stripping away part of the daily rhythm they’d come to expect from Royal Mail. Critics argue this erodes the “universal service” ethos, while management frames it as a necessary efficiency measure to ensure long-term sustainability.

Leadership turnover has added another layer of uncertainty. CEO Emma Gilthorpe, brought in to steady the ship, left after just one year in the role. Alistair Cochrane, the company’s COO, stepped in as interim CEO becoming the sixth person to hold the top job in seven years. Frequent leadership changes create challenges for executing long-term strategy, undermining employee morale and external confidence. Meanwhile, Daniel Křetínský, the new owner, appointed himself chairman, consolidating authority but also raising questions about governance and continuity.

Křetínský’s stewardship so far has emphasized reassurance. As part of the acquisition, the UK government secured a “golden share” that allows veto power over key decisions, particularly those affecting the Universal Service Obligation. Royal Mail has also established advisory boards that include union representation, signaling a more collaborative posture after years of fractious labor disputes. For now, commitments to keep headquarters, tax base, and branding in the UK remain intact. Yet skeptics question whether these promises will endure once short-term pressures mount.

The core challenge is clear: Royal Mail must balance modernization with preservation. It needs to invest in logistics, automation, and service diversification to survive in a world dominated by digital communication and fast delivery expectations. But it also carries cultural weight as a national symbol, and any move that undermines that heritage risks backlash. The next few years will show whether IDS can turn profit momentum into sustainable growth or whether the pressures of modernization will erode its identity.

Royal Mail’s transition underscores a critical truth: when a brand’s value is built on heritage, modernization must be handled as stewardship, not disruption. Křetínský inherited cultural trust that if handled improperly, could collapse the business. Due to the history of the company they have a forced duty to provide services Royal Mail has offered for hundreds of years even if they aren’t profitable anymore, this is where the modernizing is a necessary evil that has to be carefully handled.

Modernization is necessary. Automation, cost efficiency, and parcel growth can’t wait. But progress only works if it reinforces identity rather than erases it. Royal Mail has shown that protecting emotional equity (red vans, universal service, national roots) buys room to innovate elsewhere.

For entrepreneurs, the lesson is this: legacy is a moat. Your brand’s history, trust, and values aren’t liabilities they’re strategic assets. Growth is not just about chasing the new but preserving what your customers see as irreplaceable.

I appreciate you all tuning in this week! Let us know what you think, was Royal Mail right to trade tradition for efficiency, or should heritage always outweigh modernization?

We respond to every response we get so please feel free to reach out we always love hearing our readers input.

With that, thanks for reading, until next time, cheers!

— The Built To Last Team

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