COMMENT


How does your merchant grow?


T


here are myriad ways for companies to grow in this industry, and in this issue we seem to have covered most of the main ones. There’s the simple one of deciding where you’d like your new branch to be, then going out and acquiring the site, the premises and the staff - not necessarily in that order. HPS grew by finding the right people for the business and then effectively building the branch around them.


The benefit of this method is that you get what you get on your own terms, to your business’ specification. You also don’t have to take on any of the baggage – whether personnel, financial or metaphorical – of an acquisition. On the other hand, often it’s that baggage, particularly if it comes in the form of experienced, committed personnel, which is one of the things to make an acquisition worth it in the first place. Hence the way many merchants have expanded via the tried and tested method of adding on like- minded businesses one or two at a time over the years as they grow. When you open up a brand new branch you don’t know for certain whether you will actually get any customers. Growth by acquisition has the very great advantage of giving the acquirer the surety of knowing that there is likely to be some money coming in from day one.


Any prolonged period of growth requires deep pockets to fund it, which is when, often, outside finances are sought. That can be via a variety of methods, such as bringing in a private equity partner as Huws Gray have done, or seeking a different type of finding via a public listing as Lords Group have just completed.


Both methods have their advantages, and Huws Gray’s choice of investment partners have served them well thus far, allowing the Welsh merchant to double in size every five years. From starting out with one branch in Anglesey in 1990, the Huws Gray business is arguably the country’s fourth or fifth


CONTACTS Builders Merchants Journal


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EDITORIAL Group Managing Editor: Fiona Russell Horne 01622 699101 07721 841382 frussell-horne@datateam.co.uk


Assistant editor Catrin Jones 01622 699186


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Production Controller: Nic Mandeville


largest merchant, with the bulk of the Grafton GB traditional merchanting branches having come into the fold. It’s a growth pattern that has been carefully thought out, bringing in businesses and experience that add something to the total, rather than just acquiring something and letting it be subsumed into the larger organisation.


Lords have gone down the public listing route because, as CEO Shanker Patel says, it’s a really good option for a family-owned business, allowing it the financial backing to grow and achieve its ambitions - in Lords’ case to get to a £500m turnover by 2024 - whilst retaining the family ethos and control. Another major advantage from Patel’s point of view is that it allows the Group to expand the ownership, including to most of its own employees. There’s always lot said in this industry about giving staff a sense of ‘ownership’, of branch managers being encouraged to feel as though they are working their own businesses, or regions. So, why not take that bit further and extend actual ownership? That’s the way that MKM grew, after all, by getting a buy-in from branch directors.The great John Lewis Partnership - before it hit its current difficulties - was built on the bedrock of employee shared ownership, and for years it was the epitome of everything that is good about a customer- focussed business.


Patel and Lords’ CFO Chris Day say that they were overwhelmed at the positive response from Lords employees who were all keen to take up a larger share of the business. And why wouldn’t they? Ours is an industry where people who love to sell, sell products that others have lovingly made, to people who then use those products to create homes wherein other people build their lives. Who wouldn’t want to own a share of that? BMJ


Fiona Russell-Horne Group Managing Editor - BMJ


So we grew together, Like to a double cherry, seeming parted But yet an union


“


CONTENTS 4 Newsround


”


News from around the industry. 8 News Extra


Lords Trading Group has gone public.


12 People


Who’s moved where and 10 Minutes With…


13 Business Helpdesk The BMF Experts look at packaging issues.


14 Viewpoint Managing flexi-time requests.


15 Company Focus Decorating supplier Axus Decor


16 BMJ Industry Awards Nominations are in, time to start voting.


18 Merchant Focus Huws Gray have just got bigger. A lot bigger.


22 Talking Points NBG merchants talk Landscaping and Plumbing.


24 Merchant Focus Graham have taken technology to the next step.


27 Sales trends Looking at what’s happening in showering and workwear.


30 IT


Merchants continue to invest in their systems.


ADVERTISING Publication Manager: Dawn Tucker 01622 699148 07934 731232 dtucker@datateam.co.uk


Publisher: Paul Ryder


pryder@datateam.co.uk CIRCULATION


ABC audited average circulation July 2018-June 2019: 7,801


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© Datateam Business Media Ltd 2021. All rights reserved. No part of this publication may be reproduced or transmitted in any form, by any means, electronic or mechanical including photo-copying, recording or any information storage or retrieval system without the prior written consent of the publisher. The title Builders Merchants Journal is registered at Stationers’ Hall. Suppliers have contributed towards production costs of some photographs in this issue.


33 Timber


Regulations and sustainable supply.


36 Ironmongery Opening up sales opportunities.


40 BMF Industry Voice All the news from the BMF.


42 Product news The latest product developments.


46 And Finally News and the BMJ Prize Crossword.


August 2021 www.buildersmerchantsjournal.net 3


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