Shower tray manufacturer JT is focusing its efforts on the contract sector and growth opportunities abroad in a bid to stay successful. Rebecca Nottingham caught up with managing director Paul Crossley to find out more…

 

 

You’d be hard pushed to find a business that hasn’t felt at least some effects of the economic downturn. But, when you speak to Paul Crossley, managing director of JT, one of the bathroom industry’s leading suppliers, he’s refreshingly upbeat and optimistic.

 

According to Crossley, JT, which is backed by private equity firm Gresham, recorded an 11% increase in volume with a 6% rise in sales last year despite the turbulent conditions. So far this year, the company is already 5% up on volume and has seen its sales rise by a very healthy 8%. Not bad for a company that makes, well, pretty much just trays.

 

“The past three years have been a massive learning curve for everybody, because you can’t take anything for granted,” he says. “Raw material costs fluctuate all of the time and you know that any savings you might make one month, could be eroded by something else the next month, so it’s a constant challenge. But, I’m very proud that JT is still profitable, we’re still growing and we’re still market leaders.”

 

The company, formerly known as Just Trays, has been making shower trays at its site in Leeds since it was founded back in 1988. As well as a new name, the company has been through some pretty major changes in its 24-year history, none more significant than the management buyout, led by Crossley, in 2006.

 

As the manufacturer of shower trays, a vital component to the shower enclosure market, it’s fair to say the company owes at least part of its success to the rise of popularity in showering among consumers. However, Crossley’s overwhelming passion for manufacturing and his ambitious, level-headed management style are also significant factors.

 

 

Q: JT is a staunch supporter of the ‘Made in Britain’ campaign. Why do you think the message is suddenly so important?

A: Backing British manufacturing campaigns does seem like the very en vogue thing to do at the moment, probably because of the Jubilee and the Olympics, and I’m a huge supporter. But the truth is, we’ve always done it. Everything is made here in Leeds and that’s not changed. We’ve always been massively proud of being a British manufacturer.

 

Q: How has JT succeeded as a manufacturer in the UK when so many others have failed?

A: We’ve had to get a hell of a lot smarter by keeping all costs to a minimum. As a manufacturer, the main cost is raw materials and you have to make sure they remain as competitive as possible. I think that, in the past, British manufacturers haven’t been forceful enough to drive those costs down. We source sheet and acrylic from Europe, the deals are there, but we are just being much more hard-nosed about it.

 

Q: What do you make of some of the big industry players moving production back to the UK from China?

A: The one thing that importers from China have is the cost savings in labour, but what’s going against them at the moment is inflated transport costs and fluctuating exchange rates. One or two companies that left the UK for production facilities in the Far East have now come back because their volumes have dropped off so at the moment. For some, it’s no longer as profitable.

 

Q: In a challenging market does the origin of production really affect people’s buying decisions?

A: I think it can make a difference actually, particularly with exports. We’ve had a lot of success in exports and some of the people I sit in front of want to buy from a European, and most importantly a British manufacturer.

 

Q: JT has recently started to expand its export market. What made you look at markets outside the UK?

A: I have a factory in the UK and I have fixed costs. The more trays I produce, the more efficient the factory becomes. It doesn’t matter how lean I get with costs, if I don’t get the volume then nothing will come to fruition. Two years ago, I recognised that the UK market was faltering and that it looked as though it was going to be challenging going forward. As a manufacturer, I want to make products and I want to make the business as successful as I can, so I decided to look at other markets that would give us volume.

 

Q: What markets are faring well?

A: Germany is doing really well for us at the moment and certain parts of the Middle East are faring pretty well. I’m confident that there are more opportunities for us in Europe and the US market obviously appeals to me, because of its size. This isn’t about world domination, but I do want to grow this business, so if the UK market, realistically, isn’t going to grow over the next few years, then we have to look for other opportunities.

 

Q: In terms of price, the export market is even more competitive than the UK, isn’t it? How can JT compete?

A: We’ve made a huge number of changes to the business over the last six to eight months to make our processes even leaner and more efficient. If I can compete with China in the UK, then I should be able to compete with China anywhere. Logistically, Europe is pretty easy for us to supply in short volumes and not the huge container loads that China is set up to do. The Middle East is also pretty competitive for us to supply. What we’ve done is build relationships with key distributors in each territory. They know the market better than us and as a result they are able to go out and grow the business for us. Even with those relationships the Middle East has taken us years to get right. Knowledge is power. If you know the market, you’re going to do better.

 

Q: If you’re concentrating on building up JT’s export business, does that mean there’s no sign of a recovery in the UK?

A: There are signs of a recovery and even growth in the UK, however you certainly have to go hunting for the opportunities. For us, the key is to see through the volume opportunities and go after the ones that are incremental sales and that purely comes down to knowing your market as a business. Bathroom sales in the UK are around 25 to 30% down in volume. I need the volume in my plant to give me all the efficiencies to make me world-beating and to be able to compete. You have to be very careful about the business you actually go after and that is a massive challenge for me sat here with 90-odd employees.

 

Q: So, where is the growth in the UK?

A: BMA statistics for the moment currently show a 5% decrease in the UK bathroom market, in terms of volume and sales. With our increase in 5% and 8% on bottom line sales, we’re doing very well at the moment. I put that growth down to increased exports and a lot of hard work in the UK contract market. We’ve continued to set up more strategic partnerships with businesses in order to establish ourselves further in the UK market and try and gain market share and that’s tough.

 

Q: So has there been a significant growth in the UK contract sector?

A: We weren’t a key player in the contract market prior to the recession. I think we gained projects because we’re the market leader. But that route to market is one, in particular, that we’ve realised needs  constant monitoring. You’re constantly under pressure because there’s always someone cheaper than you, so it’s the face-to-face contact that’s been key for us. The contract market is one of the areas of the business that we have, and will, continue to invest in.

 

Q: In a market you agree is always challenging, aren’t your customers more interested in support and service rather than innovation?

A: Obviously service is key, but innovation is still a driving force for me and for the business. We’re always looking at the next new development in shower trays. You have to launch products that innovate, products that tick the design box for the end user, but you also have to make it as user- and installer-friendly as possible. When I joined the business 11 years ago, we were the first to produce a stone resin shower tray on legs. There isn’t a tray in the UK anymore that doesn’t have a legged option to raise it off the deck. We were also the first to create a low-profile tray and again, now they’re the norm. You have to launch products that innovate, but you also have to make it as user and installer friendly as possible. 

 

Q: Do you think manufacturers listen enough to front-line retailers to gauge what the market requires in terms of new products?

A: Any product you launch takes time, a great deal of effort and, more importantly, a significant amount of capital expenditure. Once the product has hit the market, it’s impossible to back-pedal, but if you listen prior to launch and development that can be avoided. We have regular sales meetings here, where we do get feedback from our salespeople and, more importantly, we talk to our customers, who hopefully know their customer base.

 

Q: What do you make of the purchase of Bathstore by Endless LLP and the appointment of ex-MFI boss Gary Favell as its new managing director?

A: Having been part of one of the largest, mid-market, private equity companies for a number of years now, I can say that they do add value to a business and they do a great job. I know of Endless LLP and I’m sure it knows what it’s doing. I very much doubt it would buy one of the biggest brands in the bathroom industry without knowing what it’s letting itself in for. If there’s one thing that private equity companies do very well, it’s to add value to every part of a business, whether that’s through cost savings or implementing procedures and strategies to make the business more efficient. They introduce key skills sets and that’s what they’ve done by appointing Gary Favell.

 

Q: What’s the next stage in your growth strategy for JT home and away?

A: It’s really simple. My job is to raise the profile of the JT brand and continue to grow JT as one of the leading bathroom suppliers in the UK and worldwide. That is going to be by seeking out new opportunities, innovating, a bit of diversification, but also by sticking to our core principles. That’s one of the challenges I’ve faced through these fairly traumatic times. Over the past three years, there have been opportunities for us to diversify and acquire, but for me it’s about finding the right things that add value to our business. I think if we had gone a bit left-field with our product range, we wouldn’t be in as strong a position as we are now.