‘It made perfect sense, the potential is huge…’
When premium German kitchen brand Siematic announced a partnership with the Chinese Nison Group the industry took a sharp intake of breath but, as Siematic CEO and grandson of the founder, Ulrich Siekmann explains, global growth means global partners
The Mailbox in Birmingham is the kind of retail and residential development that sums up what many brands call the ‘aspirational professional’ market. It’s a stylish and exclusive destination that houses, among many brands, Harvey Nichols, Heals, Made, BoConcept and, the location for our conversation, the Kitchen Gallery.
This, explains Siematic CEO Ulrich Siekmann, is the textbook showroom for the brand founded by his grandfather – looks fantastic, in a perfect location and owned and run by an experienced and dedicated retailer who totally buys into the Siematic philosophy.
That’s the model that has seen the brand grow into one of the most prominent premium German kitchen brands in Europe, but Siekmann has grander ambitions to spread the Siematic name further around the globe – especially at a time when the German kitchen manufacturer market has taken some very public hits.
That strategy made the headlines back in October when the company announced it had been acquired by Chinese home appliance supplier Nison Group. Nison took a majority stake in Siematic with Siekmann and his sister Kathrin André remaining as minority shareholders.
While some industry insiders greeted the news with caution, Siekmann is clear that it signals nothing more than the start of a new phase of success for his family business.
Q: How is business for Siematic at the moment?
A: If you look at all the markets that we operate in, it couldn’t be better. The building industry is booming, the high-end markets are booming and we’re doing well across Europe.
Germany is, of course, number one for us, and the Netherlands is a major export market that’s been really coming back strong over the past three years. We have the UK, the USA and there’s a lot going on in Japan, China, Korea and the Philippines too. With export markets in general, it’s all about finding the right partners in those markets. When you find the right one, then you’ll do well.
Q: Where does the UK fit in?
A: The UK is a very long-term market for us and has been since the 1960s and ’70s. We’ve grown a very nice network of dedicated dealers and partners over here and have a lot of exclusive showrooms. In major metropolitan areas like London or Birmingham then the contract market plays a huge role too. So it’s all done really well in the past few years.
Q: Have you seen any effects of Brexit?
A: As far as selling kitchens to the high end is concerned, we don’t see any effects at all so far. Even in the financial side of London, it remains the same for us despite whatever changes may be anticipated there. Whether it’s going to stay that way in the future, I don’t know. The talks are still going on and nothing has actually happened yet. My guess is that the politicians will eventually come up with some sort of deal and we will have to live with the outcome. So everyone is talking about it, but we don’t see any effects in terms of sales going up or down.
Q: After what has happened to Alno and other brands, what do you think is happening in the German kitchen market?
A: In general, there’s a market consolidation going on in Germany. We’ve seen a couple of big volume producers become bigger and bigger with time, and then you’ve had more specialist producers and brands like us. I wouldn’t want to comment too much on Alno specifically, but it was clear to everyone that it was seen and talked about for many years and it wasn’t unexpected. But when it happens, it’s very sad to see, especially for the people who have to leave those companies. In the end, it’s part of a market consolidation where you will have three, four or five volume producers in the future with a few specialist companies focusing on certain niches or brands.
Q: Is it simply that there’s too many kitchens being made in Germany?
A: It’s not that there’s too many, but there have been certain developments and strategies in certain companies over time. The market has grown every year for the past 10 years in Germany, and several companies have increased their export shares to Europe, Asia and even the USA. So the issues are more around consolidation and the success of different strategies, rather than over production. In Germany, the market as a whole has grown, but the structure has changed slightly. The big furniture department stores have increased their share, but the kitchen specialists have also improved their professionalism and those developments will trigger changes in the supply side, so we have seen some grow strongly and others not so strongly.
Q: What’s the thinking behind the Nison Group deal?
A: The general perception over the past 10 years of market development is that the industry is consolidating, so we had to ask ourselves what it meant for us.
In 2012, we took stock and saw that we’d got through the financial crisis that started in 2008 and things were fine again, but we saw that it was time for us to do something different in terms of the way the brand was led.
So we talked about the brand DNA in great depth and created a new corporate design, came up with new cabinet designs, corporate architecture to go in the showrooms, internet presence, brochures and many other things – we changed the lot and we’ve been very happy with that.
We also saw that if we wanted to accelerate our growth in global markets, we needed to find a partner. We ended up with someone from Asia and while that might have come as a surprise to some people, it made perfect sense to us because we know that those markets are going to grow and the potential is huge.
That is particularly true for commercial projects and that’s the real potential right now. In China, the retail side is definitely developing too and will be the more important and interesting side of the business in the next few years, because there are 200 million affluent people who are open to new ideas and aspire to great products.
That’s why we were looking for a partner over there and we’ve found a great family business. It’s a big one, but a family-run one with father and son running the show. It means they understand where we’re coming from and we can talk owner to owner.
We’re a few months in, but it’s definitely the right step for us. Over time, we’re looking for 25 to 30 exclusive showrooms in major metropolitan areas in China, and we couldn’t have done that ourselves. But this partnership isn’t just about China, it’s about expanding our global business.
Q: The initial reaction from some was to be cautious about a strong European brand partnering with a Chinese company?
A: People don’t like change, and it’s natural to ask questions about where the company goes and what the strategy behind it is, but the truth is that not a lot is actually going to change. There’s no factory in China, there’s no Chinese products being sold and the Chinese themselves want the German brand, product and quality. We have a great potential to add to each other and complement the skills we have and grow in the markets that are growing.
Q: Siematic is a family business, does that influence the direction of the company?
A: In the end, it’s about dedication. It’s about living with the business day in, day out, and trying to make things better every day. When you have that relationship with it, you’re interested in design, you’re trying to feel the new trends and implement them in the fastest and most perfect way – and that needs dedication to detail, enthusiasm about those details and an ability and willingness to not only rely on supplier product development, but also do your own thing. So getting that mix right depends a lot on experience. The company was founded in 1929 and it’s been making kitchens ever since, and a lot of people have been with the company for a very long time, so all that contributes to the DNA.
Q: Do you think it gives you a longer-term outlook on decisions you make?
A: The family heritage is really important, but you can’t hide behind it. You always have to innovate the brand, give it new direction, new products and stay ahead and think about what’s next. What makes us special is that we enjoy doing that, that’s part of our DNA too, and we’ll never run out of ideas.
Q: What makes a good Siematic retail partner?
A: The prerequisite is that they need to love selling to the high end – people walk in with special aspirations for kitchens with uncomplicated, great design and deep functionality. That is something you have to understand and love. It’s a design product, it’s an international product. Then, of course, we’re looking for dealers who are willing to set up a showroom that matches that aspiration. It involves investment and the ability to lead a team that understands the philosophy.
We do extensive training with an academy in Germany as well as an online resource and it’s incredibly important at all levels to make that investment and commitment to our partners.
Q Who is the Siematic customer?
A: It’s actually very hard to picture them these days. When I started out with the company, it was all about demographics, buying power and other measurable things, but the truth is that none of that counts. The major common denominator for describing our customers is that they are people who have design and quality aspirations – it always comes back to great design and not making compromises.
We don’t sell to people who need a new kitchen, we sell to those who want a new kitchen – it’s about those who desire the best things in life.