central south mid market 21
SUSTAINABLEPROFITS CHALLENGES FOOTHOLD
AMBITIOUS ... continued
The DrillSIM® range of drilling and well control simulators already has portable options, and all full-size simulators are complemented by desktop or PC-based systems.
The company is also supplying training solutions for dockside cranes, bespoke solutions for individual companies and has formed a JV to develop e-learning systems. Drilling Systems
ensures its competitive edge is sharp by consistently “keeping track on what the others are doing.“ The real world of training by simulation is quite a small world in terms of the players in it, and Drilling Systems staff regularly attend conferences and trade exhibitions.
The company also recruits astutely, particularly in its important software development area. “We
London Camera Exchange: combining traditional retail qualities and modern technologies
LCE has 28 retail branches throughout the UK, trading in new and second-hand photographic and optical equipment. It also has a growing online e-marketing presence
www.lcegroup.co.uk
Profitable growth: 1975, 16 shops, turnover £1m; 2013/14, 28 branches, turnover £32.6m. Adjusted profit: compound annual growth rate CAGR 50% (2011-2013).
Staff: 150, eight at Winchester HQ, flat management structure.
History: Family business founded from a photographic studio in Guildford in 1956. “It became obvious people were interested in the equipment as much as the pictures.“
Nick Richens, MD of London Camera Exchange Group (LCE) is plainly happy with the past three years of profit growth, but reckons that past market changes and management decisions, plus successful weathering of the recession, have helped the company achieve its current position.
“Retail is not an easy industry and consumer electronics, where we sit, can be a rollercoaster ride.“
The buoyant 1980s photographic retail market, fuelled by lower-price imported cameras, continued into the new millennium before beginning to tail off. “Store rents were going up and we saw the advent of online retailing and camera phones, putting a lot of pressure on traditional retailing.“
Fortunately, although the market became saturated at the lower end, LCE’s customer base has always been camera enthusiasts to professionals, seeking high-end and specialist equipment.
THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – JUNE 2014
When the recession hit, LCE was arguably well placed to maintain its position because its core customers were largely in employment, aged around 50-60, and, with low interest rates, had disposable income or ’grey pound’ savings to spend on their personal interests.
The LCE age demographic is actually falling nowadays, says Richens, as disposable cameras and camera phones get a younger market interested in better quality photography.
“Our business model has always been focused on customers who want to trade in and trade up. We are keen to have first-time camera buyers, but in an ideal world we want those who are interested in photography and will be for life.“
Employing and retaining friendly retail staff with excellent photographic knowledge and sales experience is another key to LCE’s trading success.
“I had a meeting with 32 staff recently and together they had 794 years of photographic knowledge – and LCE service. Discerning customers don’t just buy the equipment, they buy the person selling it.“
A key business model, established in LCEs during the 1970s, has also helped sustain the company’s performance. Store managers had been allowed to become local shareholding directors in their own shops.
This John Lewis style ’ownership’ incentive has proved its worth as LCE has battled against retail sector challenges. “Sometime ago, we adopted a strategy of aiming to be the last man standing. We felt we could maintain our business proposition, come through, grow and improve our margins – and we have.“
Two major competitors did not survive the recession – Jessops and Jacobs – which has boosted footfall in LCE’s stores.
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tend to recruit people who are fully trained or are university graduates obviously interested in our work.“ Some Drilling Systems software engineers have come from the computer-gaming world, bringing fresh ideas and skills with them.
Advice for sustained profitable growth: “Stick to the knitting. Don’t deviate too far from your core skills and markets.“
In recent years LCE has made itself lean and operationally more effective. With store managers having significant autonomy – “although we have shortened the rope of late“ – head office has concentrated on improved group purchasing and tax efficiency. The company has always been prudent, self-funding and maintained strong relationships with its suppliers.
Will those profits be re-invested in LCE? Richens says LCE is now aiming for the best of both worlds – by enhancing its traditional retailing qualities, while harnessing modern technologies, e-tail and the market opportunities they bring.
LCE has recently employed a new head of IT. Greater engagement with customers and wider brand marketing through online and social media channels, plus better management information from data retrieval are all on the commercial horizon.
Advice for sustained profitable growth: “Always live within your means, keep an eye open for the opportunities, and make the most of them.“
The next subject of BDO’s mid-market focus will be: Looking to tomorrow? – the development of new products and technologies.
Details: Helen O’Kane 023-8088-1792
www.bdo.co.uk
If you would like to see the full list of the 20 leading mid-market companies by profit growth, please contact Danielle Bishop at
danielle.bishop@
bdo.co.uk
PROGRESS
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