Early in my meeting with JJO sales and marketing director Richard Proctor, the conversation turns to the threat of the increasingly 'affordable' German kitchen. He shrugs off the question by way of an interesting anecdote: "There are people who will always buy what they perceive is a better brand," he tells me. "When County Hall in London needed new kitchens, the developer wanted them to be German. So my intermediary promptly re-headed his notepaper 'Kuchen Kuchen' and we got the job. The Germans source from all over the world so it's down to the name. It's the same chipboard, it's the same hinges, it's the same vinyl, and it's probably the same handles. I don't care what you throw me from Germany, I can match it."

Based in Bacup, Lancashire, JJO is one of a dying breed of mid-market British furniture suppliers fighting the popularity of imported designs. Launched as a family joinery business in the 1860s, it's grown into a major manufacturing and distribution operation with an annual turnover of around £41m. Proctor joined 15 years ago, having been a long-standing business acquaintance of current chairman Allan Greenhalgh, whose son Stephen is the md.

"We are now very much a kitchen manufacturer that happens to distribute," Proctor explains. "That's the shift. We've also changed the dynamics of bedrooms. At our price sector it's split three ways - Crown, Symphony and us. We do about 80 bedrooms a week, which is very healthy, and 500-600 kitchens. We've also bolted on a 'value' kitchen and now a bathroom offering."

The bathroom side of the business was launched at KBB Birmingham back in March and according to Proctor has been a big success. "I have a spread betting philosophy," he says. "Talk to a retailer and if kitchens are down, bathrooms are up and vice versa. So we've spread our product mix."

In a difficult market climate, Proctor speaks candidly about the size of the challenge, and gives us an assessment of the current kbb landscape...

Is the slowdown as bad as is being painted?
We have an obsession with talking ourselves into trouble. If you've got the same headline being worked to death it undermines people's confidence. It's a huge shame that the papers delight in talking us into a corner; it's immoral. The Americans are no better off but they dust themselves off and find another dollar.

Who in particular will struggle?
I'm hearing of smaller manufacturers going out of the business. It's going to be 15 months of hard labour. It's gone from the extreme of a chipboard shortage to a situation where I've had more suppliers contacting me in the last quarter than ever before. They've been told to knock on every door there is. I've sent them away, but they keep coming back. There's a tightening right across the mix.

Are you changing your strategy to cope with the situation?
I'm a great believer in the spread bet - one pond goes up, one pond goes down. This is slightly different, but I hope I have enough good customers to weather it. I recall 1989-91 which probably took 1500-2000 outlets from the business. There's an increase in the quality and professionalism of the industry so we're better placed than we were. But I do see it as a long haul.

Unsurprisingly, most of the people we talk to claim they're bucking the trend...
They'd be fools not to, but it's going to hit all of us. We will draw in our horns, there will be no surplus expenditure on frippery where there's no guarantee of return. If I have a story to tell, like bathrooms, maybe I'll break my rules but advertising is really going to tighten up.

How is the bathroom side of the operation going?
We launched at KBB Birmingham and the impact was a huge surprise. For the first time, we had to vet our enquiries and half of them were for bathrooms. We had nine displays, which were bolted onto the side of a huge kitchen stand. We immediately knew we'd got a winner, the stand was heaving. A lot of established bathroom manufacturers have lost sight of what fitted furniture is about. Everyone is jumping on standalone but there's still healthy business in fitted furniture.

So you're not worried about the timing of the launch?
No, once you're in, you're in. We've committed £2m to it. We've got £500,000 worth of stock and given it a standalone building. It's all budgeted for.

How's business in general?
Company turnover is just over £41m. I'll be happy if I hold that in the next 12 months. At the moment we're 3% up year-on-year but every year it's got a bit tighter. Your lorry drivers tell you a huge amount. My guy has still got 29 drops on so I know we're bucking the trend - that's not just salesman's diarrhoea. As our chairman says, we will come out the stronger with less competitors, whenever this is over.

So does success come down to strong management at the top of the business?
Yes, five years ago I warned the chairman we were vulnerable to the vagaries of the market. We had an old plant and were buying panels from all over. It disadvantaged us in purchasing power; if B&Q had doubled their demand with one particular supplier we'd be the poor sods who hadn't got panels. We had that discussion on a Thursday night and at 8.30am on Friday he came in and told me it was sorted. He spent £6.25m on a new panel plant. It's a contradiction to where everyone else has gone but it's right for us. You need a massive stock and a massive machine behind it.

Does it irritate you that the Germans and Italians seem to set the design trends?
It's the colourways that are setting the trend. But do you want them in your house? Then again, you do have to give your retailer something new. We brought out 14 new doors 18 months ago and three months later I was already being asked if there was anything new by the specialists. There's a fear of missing something. They're trying to stay ahead of the sheds. But equally he needs to have what the sheds have to legitimise his whole portfolio. What would concern me is if there were a hundered Kutchenhaus stores and they developed a market place, let's say, for pink doors with yellow spots because we haven't got any of those.

Are you looking to compete with continental designs or offer something different?
I always viewed the dealers' desire for 'new-ness' as his motivation, and what the Germans were offering was different to B&Q. They were the first to bring out red and black and wraparound. A lot of dealers wanted something for the window. It encouraged them to say they could buy a German kitchen for no more than an English kitchen, so at the show I purposely introduced a Germanic flavour. We produced one with a similar look to Poggenpohl, but we put a sushi bar in. We showed you don't need a Germanic kitchen, you need a German thought pattern. It's down to you if you want a European look, the product is in the portfolio but you haven't seen it.
If the marketplace changes then we should be in a good position to respond. I don't see there being 200 Kutchenhaus stores in the future because there's always been a problem with labour. But what they can do is take on the direct sales boys if they get their act together. They are the legitimate face of direct sell because they have a showroom, but let's just see what the Euro does to them.

Why are the sheds upping their game when if a customer has £15,000 to spend they might prefer a mid-market boutique?
I don't know, it's not their traditional market. Maybe they feel the lower end is too crowded but historically the sheds have failed dismally with the whole package. Over the last 10 years, the specialist has always had the service aspect, in whatever guise. That's the one thing the shed hasn't got. The aspirational lower end think B&Q is the place to go, but they don't realise they make their money from the fitting costs.
Customers fear that if they go to a retailer they'll get trapped, but if they go to a shed they can choose what they want. It's silly but as well as offering better service, specialists have to be more user friendly if they want to take the average age of their customer down a bit.

How many retailers do you have?
About 1600. That's the spread bet though. I guess there are 5,500 legitimate places you can get a kitchen from in the UK. Of those, 800 are half decent and sell 1-10 kitchens a week, they're the ones that every good manufacturer wants to be in bed with. Two hundred are superb and we're fighting after that small number. Our job is not to find the rest, it's to develop the ones we've got.

What makes a showroom work?
There's not an answer to that. I wouldn't discriminate against the guy with the boxes in all his corridors, it shows he's busy. I like stores that are well propped and fully fitted out, as if it's an exhibition. It's also about how you use the kitchen, which is very difficult to explain to a retailer. The fact that you can get 15% more goodies into a kitchen with drawers than one with doors is a song to sing. We've being singing it for eight years, but the retailer is frightened of selling drawers because they're more expensive.

How long should they display the same product?
No more than two years, that's almost essential. Last season's red and black kitchens are this season's white and zebrano so they need to stay in tune.

Is the 'kitchen supermarket' the best model in a tight market?
No, they employ salesmen who will sell anything to get a wage. They have no loyalty to the company. The specialist has a conversation and has ears to the circumstances whereas the larger selling operations don't.

How much potential is there in the 50+ market?
There's a general blindness to the ergonomics of a kitchen. Kitchens today are about 5in too low. They've remained the same size since 1950, even though we've shot up 6in since then. It's a nonsense. I believe that kitchens should be totally re-designed to incorporate the frame as we are now and the style and the way we operate. Building regulators should be requiring specific heights for products. But the market's the market. Anyone who's surprised by the lack of product out there isn't looking. Within a good brand there should be enough product to accommodate someone's individual circumstances.