Dublin retailer TileStyle scooped the kbbreview Showroom Award for Bathrooms with a strategy based on constructing a designer department store. Tim Wallace met managing director JP Kennedy and sales manager Tony Murphy..

 

From the moment you arrive, it's not hard to see why TileStyle won our Showroom Award for Bathrooms this year. If there was ever a good example of how first impressions can really count this store is surely it. Even on a rainy Dublin day, the high-ceilinged reception area affords a genuine sense of light and space. In fact arriving at TileStyle is more like walking into a five star hotel than a bathroom store.

 

The effect is helped by the plate glass facade, the coolly neutral colour scheme and the generously proportioned reception counter. Nothing new there maybe, but a definite first is the gentle stream that runs attractively between here and the heart of the showroom, a curved bridge inviting customers to venture further. It's a nice touch, but the design of the rest of the store is equally impressive, the idea being to create an open plan department store over two floors.

 

Founded in 1982, TileStyle is a family-run operation which re-located from the city centre to its present out-of-town site back in 2008. The move has allowed the store the luxury of another 20,000sq ft of space and was meant to cater for the increasing levels of customers banging on its doors. Since then of course, the Irish economy has spectacularly collapsed, leaving many casualties in its wake. Business everywhere remains a struggle (see our review on page 70), but you get the feeling that when the long-awaited recovery starts to build, it will be proactive retailers like TileStyle that will be best placed to benefit.

 

As the name suggests, tiles was the original focus for the company, with the bathroom side launching as recently as 2010. It's been a steep learning curve since then, the strategy based on a 'mix and match' approach that allows it to cater for every level of the market. Rival stores are regularly scanned for new ideas with CP Hart a particularly strong influence. But the move from tiles into bathrooms is typical of a company determined to tackle the downturn head on by diversifying into new markets.

 

Managing director JP Kennedy is tied up in a meeting to discuss the company's plans to ramp up its e-commerce arm on my arrival - another major focus for the company going forward - so instead I'm left in the capable hands of bathroom sales manager Tony Murphy who's happy to give me a fuller picture of what the company is all about and where it intends to go from here. QnA What does the showroom award mean to you? It's put us out there. We're delighted and absolutely thrilled. We've been in the local press and various magazines. Like all awards, they're fabulous to have but you have to maximise them.

 

What's your core target market?

Females aged 45+. They're the decision makers not matter what any man says. Originally our focus was tiles, now we want to also focus on bathrooms. We changed to bathrooms at the start of the downturn.

 

What's your market level?

I keep talking here about the mix that we offer. A lot of our product here is Porcelanosa. We recognise them as a quality product but we mix and match other products. Porcelanosa is one of our major brands, but we also deal with Burlington bathrooms from a traditional point of view and also brands like Majestic, Miller, Hudson Reed, Lineabeta, Grunfos, Classic Marble and Hansgrohe.

 

Tell us more about the thinking behind the layout of the store?

The meet and greet area is important. The receptionist will ask each customer what they're looking for. She presents all the customers with a map. The way we've designed the showroom is more like a department store. There's a centre point, with a schematic of the whole store on a stainless steel plinth. We refer them to the colour logos for north, south, east and west, then it's divided into natural stone, tiles, floor collections, bathrooms etc. One of the biggest challenges at moment is selling natural stone. People are questioning whether to go with that look. But we've put an even greater emphasis on it because we're seeing other retailers backing away so suddenly you become the leader.

 

How's business?

It's still tough, you have to battle for every customer or lie down and die. From 2011 to 2012 we've seen an increase in footfall of 30% but it's not equating to increased sales. In bathrooms we're up 175% on last year but that's from a very low point so the growth isn't where we want it to be. Turnover is about £8m a year. A lot of people are unsure which way to drive their business forward. We're breaking even. That's why we need the bathrooms and the wooden floor side to start delivering. We've just introduced a new radiator section and diversified into luxury wooden flooring. We're also about to put in a bespoke steam shower section.

 

Is the problem for a store this size the massive overheads?

Yes, and some of the biggest ones are walking on two legs. At the height of the boom this store had 96 staff and now we're down to 40. So it's totally changed.

 

What sort of product trends are most popular over here?

There's a whole Georgian and Victorian side to the city. People still want traditional. It's never gone away but a lot of retailers have rejected it and thought everything should now be modern and stripped those ranges out. But CP hart have always had a traditional offering so that means it's lasted the test of time. They're at the top of their game. I watch them and they're changing to suit the market needs, they're someone to learn from. Every six months I get round all the local stores, then re-evaluate my own business. You question things and it might end up driving you in a totally different direction. We also have an area now for upmarket soaps and toiletries. We'd never go for the whole house approach though with furniture etc, you lose your expertise. We don't sell kitchens although we work closely with local kitchen companies who we recommend so there are synergies there.

 

What's your advice to smaller independents?

If you're not working to your strengths you've had it. I've seen people discounting product and it's not sustainable. It's destroying the industry for everyone. But if they need cash to stay in business another week they'll do it. That's one of the hardest places to be.

 

What do you make of John Lewis going into bathrooms?

Lots of people are saying they don't have the experience to deal with the products. The tacit knowledge built up can't be transferred. When you sell bathrooms you're suddenly in the 3D environment. Bathroom retailers can move into kitchens, all you're doing is changing the doors. Once you understand the space and dimensions you just add to it. But for someone who's never sold bathrooms to suddenly go into it, the learning curve is straight up, and you'll need to learn fast because it will burn you if you don't get it right.

 

What did you make of the demise of bathroom store The Yard up in Belfast?

To us it wasn't a surprise. They were a race to the bottom merchant even when we were at the height of the boom. They were undercutting our margins. Nobody can survive on doing that. They couldn't maintain their margin and margin is everything. So many companies lose sight of that.

 

How important is the e-commerce side to you?

Some people argue it will only add 2% to your turnover. Will it benefit us? We don't know. It's more about increasing your search engine optimisation.

 

 

'It's been a bloodbath...'  

 

TileStyle managing director JP Kennedy assesses the Irish bathroom market and how the company has tackled its decline...

 

The construction industry has collapsed by over 60% since 2007 and consumer spending has collapsed by over 30% in the same time. We've experienced somewhat relative declines. It's been a bit of bloodbath in terms of where we were in 2007 and where we are now. But business has now stabilised, retail is tracking the same as last year. We've got the right systems in place and are now doing our e-commerce platform which will give us an extra 2-3% of business. Consumers are expecting us to do offer multi channel now. Any retailer who doesn't is putting themselves at a real disadvantage. Things are changing so fast. Ten years from now it will be a completely transformed space, a complete blur between virtual and online. Remember Ratner? He set up online wedding rings and he's now turning over £75m a year in the UK.

 

People said nobody would want to buy a ring online, they'll want to see it. But some people don't have the time and are happy with virtual technology. People 100-200 miles away are asking why they need to travel all the way to Dublin. So we're making it easy for them. It's not going to transfer all my business. Hard retail will be here forever. Apple still sells a huge amount of their product through physical shops, people still want the interaction, but you need to be doing both. It's not expensive, the biggest challenge for small independents is finding the time. But the reality is that every one of those stores is under huge pressure. I don't think there's a fix for that. There are parts of retail that will work, but when it comes to product more and more people are going to the likes of Tesco or B&Q.

 

Big box retailers like Next and John Lewis are going to swamp the market. It's unsustainable for small family independents to open in any small town. Until two years ago, the cost of marketing on the internet had been very cheap. But what's happening now is people like B&Q are spending a lot of money to make sure that when people key in 'DIY' the only thing that comes up is something to do with them. The small guy working on 5-10% margin and flogging volume will find that he's not coming up in the top three, and he's not going to have enough money to pay. All of a sudden the virtual world becomes as expensive as advertising on television. It's going to get more difficult so the only independent retailers who will make a fist of it are those that have been in the business for the last 30 years - people who already have a website and have been investing over the last 10 years. But the guys who've started in the last five years or who'll start next year will find it very difficult.