MARKET INSIGHT 11 Case study: The Clark Group
’My greatest business strength is turning my vision into reality’
Steven Clark is fortunate to be able to combine work with pleasure. Ironically, one of his main pleasures is helping to build successful businesses.
Today, Steven is the CEO of The Clark Group, an entity that keeps abreast of changing trends and invests in ambitious businesses with good management, helping to take them to the next level. Private funding enables quick decisive moves when required, but also commitment to longer-term strategies.
Steven is also CEO of Parvalux Electric Motors, which is where this family story begins.
Bournemouth-based Parvalux was founded in 1947 by Steven’s grandfather Leslie, an engineering firm making fractional horse- power geared motors. Steven became a Parvalux apprentice in 1984. “It was almost expected of me, but I’d always been fascinated by engineering.“
Steven also had entrepreneurial drive and a passion for property. By 21 he was steadily building a property investment portfolio.
By the mid 1990s, Steven’s property business had been boosted by his brother Marc’s innovative ’design & build’ skills, and, with family and bank support, a property development empire was growing.
After 18 years working within Parvalux, Steven resigned. He felt the business, although an established geared-motor manufacturer, was simply “a ’cash cow’, not moving with the times.“
Meanwhile, the brothers were building a business based on attractive high-quality properties designed for the 21st century. Marc is now the MD of Clark Estates, part of The Clark Group. “Where we get on well, is that we now know what we each do best.“
By the late 1990s, Steven was leading astute Clark family investments and providing management support for growing
Steven Clark
businesses, notably jewellers Links of London, sold for £45m in 2007.
In 2004, following the death of grandfather Leslie, Steven agreed to buy Parvalux from the family and started to modernise and restructure. “Our competitors had evolved successfully; we had not. We had plateaued, our golden years were behind us. But, I had learned a great amount from dealing with management specialists and investing for longevity in other businesses. I set about building a new team.“
Investment in Parvalux followed. “We found an added-value differentiator to our worldwide competitors. Building on our qualities and talent, we brought in management expertise; empowered our engineers to get more involved. We now have multi-channel connection with our customers and suppliers, and often pre-empt the market.“
Importantly, Steven incentivised Parvalux colleagues with “a full results-based bonus scheme for directors through to machine room guys.“
Within five years Parvalux doubled its business and in 2008 acquired its nearest UK competitor. It is now a leading European manufacturer with 30% growth in the past two years, a £21m-plus turnover and its gear motors used globally.
THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – NOVEMBER 2012
Today, the ’cash cow’ has become a ’golden goose’ aiming to achieve £50m turnover by 2017/18.
Steven formed the Clark Group in 2005, focusing its investments mainly on businesses offering high-end lifestyle purchases: Clark Estates (formed in 2005) builds luxury properties; Bremont designs and manufactures unique watches; Annoushka designs fine jewellery; The HealthCounter provides online medicine, health and beauty products; and Parvalux manufactures innovative geared motor solutions.
While family trusts and IHT arrangements were set up in the 1960s to secure the Clark dynasty, Steven explains: “Trust funds are no longer the driving force for families to protect wealth. The external investments we now make are actively higher risk, and outside the Trust profile. Business investments through EIS schemes ensure wealth can be created and maintained.
“In the early days our investments were not strategic; they definitely are now. We try to predict the market five years on; review our products and technology for the ability to grow and deliver returns.“
Interestingly, Steven had a happy childhood but wasn’t born into wealth. He puts his individualistic drive down to one discipline – judo. (At 18, he made the British under-21 team)
“Judo’s one thing in life in which you don’t get given anything. It doesn’t matter if you are rich, poor, smart or daft; you work hard at it, you fight for it, and you take it. From 12-25 it was my life. It’s a massive discipline.“
Steven has obviously used that self-discipline and determination throughout his life – that desire to be “the very best in the business.“
Family-focused advice from Southampton-based BDO tax partner Andrew Lines
• Family members working for the business should add value to the business and receive a proper grounding and understanding of how the business works.
• Succession planning, not only in terms of tax but also the operation of the business, is often left too late.
• Family members entering the management team should bring proven skills or receive proper management training.
• The business should not be afraid to recruit appropriate expertise from outside the family.
• Business focus is vital. It is difficult to run any business by committee, so don’t have too many family members involved in making executive decisions.
• Set up a family trust. It can offer distinct tax advantages, asset protection and a secure legacy for future generations that keeps ownership within the direct family.
• Keep an eye on the future generations and shareholdings. After several generations, it is easy for share ownership to end up outside the immediate bloodline. Clearly defined Articles of Association or shareholders’ agreements (complementary to family trusts) are paramount.
BDO’s Southampton office has significant strength and depth of expertise and experience in advising family business, led by Andrew Lines, tax partner. He is supported by BDO colleagues offering business assurance and corporate finance support and advice.
Details:
023-8088-1845
andrew.lines@
bdo.co.uk www.bdo.co.uk
www.businessmag.co.uk
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