‘We’re back in the game…’
Last August, former Cooper Callas MD Darren Cooper acquired struggling sinks and taps producer Astracast and pledged to turn it into the number-one brand in the sector within the next three years. Tim Wallace hears how he intends to do it…
Darren Cooper’s claims that he’ll take Astracast “back to great” have got a touch of the Donald Trump about them, but you can’t fault his honesty over the size of the challenge.
“We’re a name that everybody knows, but nobody talks about,” he admits. “That’s been the case for years – we’re a sleeping giant. Go into a retail showroom and who’s got an Astracast book on the shelf? We need to buck that trend. We want to get Astracast back on the world stage.”
The company’s chequered past is well documented. Back in April 2014, it was the subject of an £8 million prepack acquisition by Maltese investment company HLD, the same people that had bought the company two years earlier. It was also burdened by a huge pension deficit prior to the HLD buyout, and since then has been “doing some good numbers, but drifting”, Cooper says.
“You’ve got financial directors and managing directors coming in, lasting six months and being spat out again,” he tells me. “It’s been like a revolving door, because most of them have come with no industry experience or knowledge. I can only assume that more emphasis was put on the financial side rather than the commercial. [Former MD] Chris Pearson was a great factory guy, but he left the company three years ago and two or three other faces appeared and didn’t last very long.”
Staggered
He also admits the company’s price positioning has been stuck in no-man’s-land. “Historically, it wasn’t even thought about,” he says. “I’m staggered, I’m horrified. We didn’t gather intelligence on competitors. We didn’t look at costs of raw materials, we didn’t really think about anything. But now, we’re almost forensically looking at what everything costs.
“This year, we’ll have a price alignment where a few things will go up, but quite a lot will come down – our Astracast Studio collection for example. The Astracast pricing is out of kilter, we’re too high in a good number of areas so there’ll be realignments down and a few prices that will go up due to manufacturing increases.”
Cooper is a familiar figure to many in the industry and rescued the company last August. He’s perhaps best known as the former managing director of distribution giant Cooper Callas, which ultimately went into administration under new MD Phil Carr following Cooper’s departure in 2014. But more recently, he launched luxury sinks, taps and kitchen brand Roux Lifestyle before switching his focus entirely to Astracast.
“Having two industry hats is nigh-on impossible,” he admits, “but I like to think that it will be a smooth transition.”
The Astracast acquisition will see the company’s two old factories replaced with brand new ones – a 42,000sq ft facility in Leeds and a 75,000sq ft unit in Malta. These should be up and running in the first quarter of the year.
“The factories are owned by Home Products Group, which is owned by Astracast International Holdings, which is owned by me,” Cooper smiles. “We also have OEM factories we’ve worked with for a good number of years and that will continue.”
The plan from here, he says, is to rebuild trust in Astracast’s retail and trade customers, aided by an appearance at next month’s kbb Birmingham show. All the senior management team have been retained and decisions will be based on open and frank discussions rather than just “being told what to do”.
“Now, it’s all about supporting and working with our distributors and it really starts with us at kbb. We’ll get hundreds of people saying, ‘I didn’t know Astracast were still around!’ But competitors are now sitting up and listening. We’re winning new business. We’re back in the industry, we’re back in the game, but there’s still a long way to go. We’ll grow in the UK, the export market is pretty strong. We just need the right strategy to expand.”
But one big question many are asking is how the takeover has been funded and is it sustainable? And will it focus on the factories, the products or the marketing?
“All the above,” Cooper responds. “I’m 100% in control. We’ve injected cash into the business and there’s more to come in. I have some backers who sit very much in the background. We’re still in the handover process with HLD. They’re not actively involved day to day and haven’t been for the past six months. Secure Trust Commercial Bank is our finance partner and is still with us.”
Scrapped
Cooper’s first big decision was to scrap the bathing side of the business, resulting in around 60 redundancies. “It was only 30% of the turnover, but created 60% of the noise,” he explains. “The acrylic bath market has been dropping for many years. The contract people go down the steel route now. Manufacturing costs rose, so profit was non-existent. Most of the team were surprised it hadn’t happened two or three years ago.”
But will shedding the bath business make Astracast less attractive to multiples who sourced a portfolio of products from them in the past?
“Our largest bath customer was Travis Perkins,” Cooper counters. “We’ve just secured a long trading relationship with them on sinks only. Does that answer the question? Our focus is on building the retail brand. Merchants, retailers, multiples – that’s our bread and butter.”
He’s also bullish over news that Wolseley is closing BCG, one of Astracast’s biggest distributors. “We’ll still provide a lot of products into Wolseley,” he argues. “We’ve worked hard over the past few weeks to secure the key business they’re supplying. At first it was like, ‘God, the balloon’s going up’, but when you break it into bite-size chunks, it’s not massively negative. We’ve secured the vast majority of the turnover.”
Cooper also shrugs off industry suggestions that he bears a responsibility to those affected by the pension deficit. “Listen, that was three-and-a-half years ago,” he reminds them.
“Those most affected are still employees and are fairly philosophical. I can’t turn back the clock. The pension legacy goes back decades, to Spring Ram, and they’re no longer part of the industry. They’ve not lost a lot in percentage terms. It’s in the past and nothing to do with the future. There are enough challenges without having to worry about pension funds.”
Ultimately though, you’d expect Astracast to find it tough to take over the number-one spot in the sinks and taps market any time soon. Franke and Blanco in particular provide strong, established competition, so how does Cooper intend to steal market share in a tight and crowded market?
“2018 is a year of consolidation and 2019 is when we’ll take market share,” Cooper responds. “This year, we’re looking for double-digit growth; the market won’t grow by double digits. Next year, we’ll expect the same and that level of growth will be achievable.
“Yes, it’s quite a tight market, but there are lots of opportunities. That’s exciting and we’ll open up other areas of the market we’re dormant in. We’ll invest in new materials and styles. We’ve got four years of evolution to do in 12 to 18 months.”