November 15, 2018
A spokesperson for Canburg, the parent firm of Smallbone of Devizes and Mark Wilkinson Furniture, has admitted three more of its stores closed earlier this month in “a strategic decision” based on research into customer buying habits.
The latest closures are at the Smallbone and Mark Wilkinson stores in Harrogate and the Mark Wilkinson showroom in Brentwood and follow the closure of the Mark Wilkinson showroom in Tunbridge Wells in September.
The news comes only six weeks after the surprise announcement that Canburg chief executive Leo Caplan had left the company and been replaced by new executive chairman Ian Gray (pictured).
However, the company rejected industry rumours that the store closures were part of wider cost-cutting measures in the face of increasing market pressures and that some staff salaries had recently not been paid.
It also moved to explain why the filing of its latest set of accounts had been delayed following a recent slump in the company’s credit rating.
“Fundamentally, the business is in good shape and [major investor] Business Growth Fund (BGF) remains very supportive,” the spokesperson insisted. “The closure of the showrooms was strategic and planned and based on research. They weren’t profitable. You can’t keep running bits of the business if they’re not making any money.
“Ian [Gray] has said that we’re looking at profit from October. The company is stable, happy and in good health. All staff have been paid. I want to say this to you unequivocally.
“We still have the store in Beaconsfield – a very wealthy area, we’ve got two in London and we’ve got our Devizes showroom linked to our workshop. We’re focusing our business around those stores at this point.”
She admitted that the filing of the company’s latest accounts had been delayed, but said this was purely for “technical reasons”.
“The drop in the credit rating is to some degree due to the fact that they haven’t filed the accounts as expected,” she explained. “Apparently, the accounts were going to be submitted, but there’s been a financing arrangement with BGF that they wanted included and that led to the change in the date – because of the way that’s been structured.”
She declined to expand on the reasons behind Leo Caplan’s sudden departure from the business, but said more changes to the management structure were likely following the arrival of Gray.
“You can expect to see some changes in the business,” she said. “Ian’s been there a while and there may be further changes to the management structure.”
But responding to industry claims that Gray was merely a ‘turnaround specialist’ brought in to rescue the business, she said: “No, he’s very knowledgeable in the luxury sector and his expertise has been helpful in terms of what the business is going to be doing in the future.”
Going into more detail on the latest raft of store closures, she said: “The company did some research and what we felt is that this is a luxury brand, it’s not a retailer.
“One of the things we discovered in our research is that when people are making the significant purchase of a luxury kitchen, they much prefer to come down to London to a beautiful flagship store, make a weekend of it and really specify their kitchen in a more elegant scenario – for instance in Knightsbridge, where there’s a huge number of options available. They can make a real event out of it.
“So what we’ve done is negotiated special corporate rates at London hotels, so they can come down and have a weekend specifying their kitchen with Canburg. It sounds a strange idea, but the kitchen is a luxury product. After all, you don’t get a million and one Prada stores all over the country.”
Commenting on the wider health of the business amid challenging market conditions, she said: “We’re not seeing bad sales, the numbers aren’t bad. But I can’t say they are rocking and rolling through the roof.
“I would suspect that everyone is feeling a bit of uncertainty over Brexit. Everybody desperately wants to get through this. We’re all working in businesses that are linked to the property market. I’ve no doubt that most people want it over and done with. Then things will come back again. There’s nothing fundamentally wrong. There’s actually reason to be optimistic. We should really market like crazy once this Brexit deal is done.
“Having a slightly depressed pound hasn’t been bad for a business like Canburg, because we have a very successful business in the US. But the last thing anyone needs is uncertainty.”
A statement from BGF added: “BGF is focused on supporting the board and the management team as they move through the transition and focus on servicing the interests of their staff, customers and suppliers.”
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