NEWS EXTRA A MEETING OF MINDS
Last month saw the formation of the largest independent merchanting business in the south east. Fiona Russell Horne went to find out how it’s all going to work.
Chris Maityard sits back in his chair and muses on the nature of an independent merchant. “By independent, do we mean independently- owned or independently-minded, with the freedom to trade?” he asks. The fact that the chief executive of Sussex-based independent Parker Building Supplies is saying this while in the office of Chandler Building Supplies’ managing director Andrew Cope, is because the two businesses announced a merger last month. The move, financed by Parker’s owner Cairngorm Capital, creates a £180m turnover merchant with 37 branches across the south-east and, in Chandler’s case, a bit beyond, the largest in the south east. Cope is joining the board of the new combined company as a board director, with the senior management teams of both companies merging under the leadership of Maityard.
Both businesses are broadly similar and have had very complementary outlooks for some years. Cope says: “We may both have head offices in Sussex – Parkers in Polegate, Chandlers in Ringmer – but the branch overlap is really not significant.” In fact, Tonbridge
where there are two branches and even then, the Chandlers branch is totally roofing, the Parkers’ is a general merchant specialising in landscaping.
The deal with Cairngorm Capital is about the future, Cope continues, to ensure that Chandlers and the growing Parker business are in the best position possible to take on the challenges ahead.
“Chandlers has been doing really well in the past few years – last year was our best ever – but we have to be aware of the longer term view. There is a great deal of synergy. For example, we know nothing about ironmongery, but Parkers do. We know something about kitchens but they probably know more. Parkers know very little about roofing and currently spend a lot with roofing distributors, so we bring knowledge and capability in that area and also in groundworks. Suddenly, between us we’re enhancing the strength and capability of the offering and service.”
Maityard agrees. “Take Fairalls, the Godstone based business we brought into Parkers earlier this year,” he says. “Their
customers have never bought plumbing, or architectural ironmongery or kitchens because, historically, Fairalls couldn’t supply those. Now we can tell customers that these product areas are available to them, but via their same customer contact, because all our branches trade between themselves because they now have the ability to do so. Suddenly the customer can get the full solution they require. The day after we bought Stamco, we had their lorries delivering to our Angmering branch because, well why not? The customer doesn’t mind what colour the lorry is as long as the product gets to where it needs to be when it needs to be there.”
Being able to add more value to customers is one benefit of the deal, Cope adds, but just as important is the benefit that it will bring to suppliers. Adding value to customers is one. “I’ve always maintained that as much as a builders merchant sells building materials, it also buys them. If we lose sight of the latter we undermine the business and damage our ability to do the former. The relationships with suppliers is just as important as the relationships with customers.
“There are suppliers out there looking at the rapidly changing marketplace asking what do builders merchants do, how do they add value in the supply chain? I think builders merchants have to be extremely careful. You only survive in a supply chain if you add value and the day that you stop adding value in the supply chain is the day you will get spat out.
“If all you as a merchant can offer is a once- a-year punch up at head office and a network of branches that wants to buy products in tiny amounts delivered to every branch on a just in time basis, a supplier might very well wonder exactly what value is being added. I think the future moving forward is about suppliers wanting to work with merchants they understand and that understand them. For me, that’s one of the opportunities with what we are doing here with Cairngorm and Parkers.”
He points out that Chandlers has been able to offer those sorts of partnerships with suppliers but across a limited network of branches. “What suppliers have now is a comprehensive structure and organisation to work with across the south of England and, in terms of roofing, a bit beyond that. If we get
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www.buildersmerchantsjournal.net November 2019
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