Derek Miller, co-owner of Scope Bathrooms in Glasgow, looks back over the highs and lows of the past year
In the November issue, my fellow columnist Paul Crow chose a ‘month in the life of’ article to give readers an insight into his day-to-day business activity. His account was rich and varied, painting a picture of the diverse nature of running a prominent bathroom retail company.
Inspired by this, I thought I might end 2016 with a reflective article of my own. Rather than ape Paul’s piece on monthly life, however, I’ve decided on an overview of the entire year.
Unlike Paul, who is a highly polished retailer, my own skill set belongs firmly in the contract supply arena. Ours is a different existence that can be buffeted by external factors we simply cannot influence.
When things are good, contract merchants can grow sales at a level that retailers can only dream of. On the downside, when things go pear-shaped, we can find ourselves slap bang in the middle of a horror story of Blair Witch proportions.
The past year, in many ways, has been something of a rollercoaster ride in the contracts bathroom arena. Scope Bathroom Interiors, the business I jointly own with Neil McKinlay, has had a year of unprecedented growth across all contract sectors.
Our house-build clients are building more houses; our service reputation has brought us new contract customers; we’ve upped the ante on front-end service delivery, particularly with design presentations; and there has been an increase in the number of hotel refurbishments in our immediate marketplace. All of these factors have contributed to a year of record turnover and strong business performance.
However, the second half of 2016 has provided more than its fair share of challenges that have ensured a frantic, and rather unpleasant, period of business activity.
These can be best summarised as follows: (i) major price increases; (ii) product shortages; (iii) changing specifications.
A combination of these three factors has dominated the latter part of our business year and, although we are still trading strongly, we are having to work harder and harder to perform efficiently and deliver the sort of consistent service that multi-site house builders expect and require.
My feelings on Brexit are well documented and the major fall in value of sterling, caused 100% by our decision to leave the EU, is beginning to have a serious effect on all firms that import products from across the globe.
Although Scope’s imports from Europe are effectively managed by the manufacturers’ UK subsidiaries, the price hikes we are to receive from January 1 present us with major problems. Scope is currently live on more than 70 active sites and the renegotiation of contract rates for existing projects is time-consuming and often fruitless. Some manufacturers claim, in mitigation, that they haven’t had a meaningful increase in two years, but this does not make it any easier to get additional costs out of house builders who are being attacked in a pincer movement from all of their supply chain, post-Brexit.
Product shortages have also been a key source of stress in the second half of 2016. Some of my most important suppliers have been unable to deliver basic products in sufficient numbers, for much of the year. Needless to say, this leads to serious levels of pressure on a business whose prime service proposition is to deliver consistently against demanding build programmes. A repeat performance in 2017 is not an option.
The final challenge that has characterised my year has been the decision by many of our developer clients to change their specifications. This, of course, is any client’s right. Many house builders came out of the recession bruised and battered and put new specs together in 2012 in a bid to reinvigorate their market presence and see off competitors.
Four years and one full building cycle on, commercial directors are once more baring their teeth and looking, quite rightly, at costs and added value, which can cause deep analysis of what can be invested in bathroom and kitchen facilities.
Strategies change, as do personnel, and what is deemed the best bathroom spec one year, suddenly loses its allure. The reorganisation of specs for multi-site house builders brings with it a set of challenges that a column of this size cannot remotely cover.
In some ways, my end-of-year school report for 2016 should read ‘nine out of 10 – a strong and sustained performance’. In other ways, however, the message could be ‘three out of 10 – Derek must work hard to stay calm at all times’.