High flier: Iain Forsythe

High flier: Iain Forsythe 1 2 3

[prev] …plan in 2005. In November that year, we took the leap and started building it. We bought the land, got the planning and served notice on our previous premises. We built this building inside of six months and moved in during July 2006. It was happy days – we built the units next door, so we took the whole estate. And by 2007 we’d grown the business to about £7 million, we’d got tenants into our units, everything was moving forward and we were thinking: ‘Here we go – let’s hold on for a fast ride…’ Then 2008 came along. So, we’ve got this new building, but no one really knew what was going on. What’s interesting is that in an industry magazine in December 2008 I wrote about what I thought would happen. I viewed it postitively, thinking that better people would come into the market because there would be job losses and things like that, and within a matter of months MFI went out of business. So, you’ve got a company who had 26% of the market who’d gone overnight. But if our market had also shrunk overall by 25% then with MFI’s share gone, that left sufficient for the rest. And I fed myself and the staff that positive news every day.

In 2010, we had 147 kitchen displays, and 49 bedroom displays. And we’d grown with one supplier. And the supplier called me in April, and said ‘We’ve got problems…’ They asked me to stick with them, because we were their biggest customer. I said: ‘OK, how bad is it?’ They said: ‘We’re going to go for a corporate voluntary arrangement…’ I asked what the chances were that they were not going to survive. They said they had it all worked out. So I asked to see a business plan. They brought a business plan which forecast growth – sales growth in the retail chain, which was an area they didn’t really know about – and I just said: ‘Look guys, we can’t do this…’ And they went bust. Closed their doors. So, we had all these displays in all the showrooms and couldn’t sell any of them – and an order book full of customers who had already bought products we now couldn’t supply.

Literally two months. I look back and wonder how we managed it – and I don’t know… But what I do know is that if we hadn’t made the decision as quickly as we had, then it would have cost us, because trying to run nine stores and nine lots of overheads with no income just can’t work, no matter how deep your pockets. That was the tipping point where I thought things couldn’t really get worse. So, I consolidated back to six stores. I thought if we took our best sales people, and took out three stores, with the number of leads we were generating we could still turn over the same amount of money – with fewer enquiries but better sales conversion. When I showed it in here to the board they thought I was mad. They couldn’t see how it would work. But that was exactly what happened. The sales conversion went from 31% to 34% – because we had better people on fewer leads – and we ended up with the same turnover, but lower overheads. So, we looked at it and thought we were doing all right – we had new suppliers, which meant we could supply more styles, more colours, more equipment. Then our cabinet supplier in Birmingham came to us and said ‘We’re struggling…’ I thought: ‘Here we go again!’ So, we bought a percentage of that business. For twenty years I’d hated manufacturing. I’ve got asthma. I don’t like dust. I sneeze a lot. And here’s me with this dirty, horrible place in Birmingham! But I spent a couple of days a week there, thought we’d turned a corner – because without a cabinet, you can’t do anything. We’re in the business of supplying cabinets. Without a door, you can get by for a day or two, but without a cabinet you’ve got nothing! But within eight months we were back at square one, where that business could not survive. In fact, they had been supplying cabinets in 2010 at the same price as they’d supplied them in 2004… There had been raw material increases, fuel increases, staff overheads – everything had gone up. They were never going to make the money they’d made previously. It was all a bit fictitious. So, we decided at the end of November that we could not continue with that business, because clearly it, too, was going to fold.

It’s simple – all you do is go out and make your own factory. Easy! But that’s literally what I did. I took 12,000 square feet of an empty building. I bought all the machinery. I didn’t know anything about it or what I was buying, but just grilled everybody and travelled the length and breadth of the country, and found what I thought was the right kit – which was similar to what they’d had in Birmingham. In the first week of February 2011, we manufactured our first kitchen. But it was fantastic…

I think even internally people were concerned. But during that period I was confident what we would do. When you go to the banks and say you need help to buy a load of machinery during a recession, with your business threatened, they do say ‘Are you crazy?’. No, we’re not, because we’re going to control the supply chain – it’s actually a great move. The banks look back at that now and say ‘We didn’t think you’d be able to get through that…’ And looking back, I realise what an achievement it was.

Before I did that, I went out to the market. I walked into somewhere and said: ‘OK, I’ve got a requirement for 200-300 cabinets a week…’ and they said: ‘Yeah, right – how many do you really do?’ But that really was what we needed. And between the previous supplier closing and the factory opening, we had to buy from somewhere, so I managed to find a company that could supply us. It was horrendous. The units weren’t right. But we had to go through that painful period, because there was nobody who could have supplied the product in that quantity. But… [cont]

High flier: Iain Forsythe 1 2 3

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