MERCHANT FOCUS: MKM
Bromsgrove is the 100th MKM branch
how successful that business model was and still is. I call it the fairy dust that embodies the whole MKM business.”
O
nce upon a time, a builders’ merchant working as regional director for a small national merchant chain decided to branch out on his own. A planned restructuring at the chain had left him redundant but by no means ready to hang up his merchanting spurs. So, he had a chat with a colleague and they started their own merchanting business in Hull. That was 1995, the man in question was David Kilburn, the friend he went into business with was Peter Murray, and MKM was born. In the intervening 27 years, the company has grown to become the fourth largest merchanting chain in the UK, with branches stretching from Hull to Honiton, Deal to Darlington and Skegness to Scotland.
“We didn’t really have any great plans other than to develop the single branch that we were going to open in Hull,” Kilburn says. “We knew that we wanted to become the best merchant in the local area, and we believed that service and stock availability and commitment to our customers would be the way to do that.” Wanting to be your own boss isn’t a feeling that’s exclusive though, and Kilburn says that after a while, a former colleague Geoff Ullyott contacted the pair about opening a branch in Driffield. “Subsequently, we found a site at Driffield which was Harcros’ previous site before they moved on to an industrial estate. For this reason, we were able to sneak under the radar without having to ask for planning permission,” Kilburn says. “I then suggested to Geoff that he might like to take a 25% stake in his own business, and we drew up the contracts that confirmed that.”
Thus was the funding model for MKM born. 26
100 NOT OUT
MKM has opened its 100th branch, and still has no plans to stop, as Fiona Russell Horne finds out from founder David Kilburn.
Kilburn says that the idea was spawned by George Paul who was the Chief Executive at Harcros. “He used to say that if you’re able to give people a stake in their own builders’ merchants branch, you’d probably get completely different results. We suddenly found
www.buildersmerchantsjournal.net October 2022
The next few branches developed in a similar way, Kilburn says. “Brian Flintoft, who I had worked with at Harcros, and was also a good friend of Peter’s, said if we could open a branch in Driffield for Geoff, we could open a branch in Scarborough where he lived. So, we did. We then received a call from Nigel Jackson, who worked at another Harcros branch, asking why we haven’t opened a branch near him. That led to us gaining more traction, and we still didn’t have any plans to go for more than we had intended originally. We were waiting for good people to come to us rather than looking for blank spaces to fill with branches, and at that stage it was still very much Harcros-centric.” In 1998, Jewson bought the Harcros business which gave the MKM family another tranche of dissatisfied, but still hungry managers wanting the opportunity that MKM could offer them, to have more control and ownership over their own branches.
An injection of private equity came in 1998, when MKM, with three branches, needed a bit of help to open four more. Kilburn says: “The bank had advised to bring in some additional finance, and at the time 3i were looking for relatively small, regionally focussed businesses to invest in. We took £1m, in exchange for 12.5% of the business, so for a long period of time the private equity stake was very minimal.” In 2006, there was a big sea change with regard to ownership. Two partners that had helped MKM in the early stages of developing the business wanted to cash in on their investment and Peter Murray decided the time was right to do likewise. The company increased the investment from private equity to fund that, but still kept a majority stake in the business. “In 2006, we started to grow a little faster, and we had 18 branches with a £80 million turnover,”
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