21 minute read
Sussex Beds / 14 VIDA Living
FOR THE NEXT THREE YEARS WE PLAN TO OPEN A STORE EVERY QUARTER, THEN PREPARE FOR FASTER GROWTH THEREAFTER, HITTING 80
STORES BY 2030
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THE BIG SLEEP
Sussex Beds, which turned 40 last month, is one of the UK’s most successful independent retailers. Currently in the early stages of a 10-year expansion plan, the 12-store chain (a 13th opens in Dover this month) has its sights set on controlled, measured expansion, CEO Steve Pickering tells Paul Farley. And the best is yet to come …
It was December 2020 when I first heard about Steve Pickering’s BHAG (Big, Hairy, Audacious Goal), but at that stage I had no idea quite how big, hairy and audacious it truly was.
When the opportunity came for a long-overdue check-in with Steve at his new(ish) office, I jumped at the chance to find out more about his rapidly expanding business. Conveniently situated in my hometown, Hastings – in the former HQ of our local newspaper, where I’d last set foot during a work experience stint in 1996 – Sussex Beds is, like many local independent retailers, something of an institution in these parts.
With a history dating back as far as I do (to 1981), the Pickering family’s bed shops have been the destination of choice for many of the county’s consumers in need of new shuteye solutions, and its liveried delivery vehicles are a common sight down here on the UK’s Sunshine Coast.
Yet clearly the secret’s out. With the opening of stores in Tunbridge Wells, Tonbridge, Ashford, Maidstone and Canterbury – and, this month, Dover – Sussex Beds is increasingly overstepping its brand’s boundaries. With a modest calmness that belies the sheer scale of his ambitions, Steve reveals that these forays into neighbouring Kent are just the beginning.
“For the next three years, we plan to open a store every quarter,” he says.
By my count, that’s 11 more locations, totalling – if, like Steve, you count the website as a store equivalent – 25 by ‘25.
“I don’t see such expansion as a risk,” he continues. “The finance is in place, and we have a very strong business model.”
But that’s just the start.
“That’s the slower bit,” Steve continues, flashing a wry smile. “The objective then is to prepare for faster growth thereafter, hitting 80 stores by 2030.”
That statement takes a while to settle in. After seeing so many retailers downsize/rationalise their store estates over the years, it’s quite a shock to hear directly from an independent retailer (and a local one, to boot) that’s planning quite the opposite.
Waking up To appreciate the credibility of Steve’s ambition, one must first understand his back story. Founded by Steve’s parents John and Sandra in 1981, Hastings Bed Centre was joined by stores in Haywards Heath, Bexhill, Uckfield, Portslade, Hailsham and Newhaven over the following three decades.
This expansion came to an end in 2012, when the realisation hit the Pickerings that the business was unsustainable. Sussex Beds was overstretched and underperforming, and its principals made the difficult decision to place it into a CVA, hitting a hard restart on proceedings in the name of long-term survival. Full administration followed.
“There was just so little knowledge of what was going on behind the business,” Steve recalls. “Retail isn’t just about product, but a whole host of structures and controls – finance, HR, KPIs … and we were well out of our depth.”
In hindsight, it’s fortuitous that the family chose rip off the plaster when it did.
“The challenge certainly spurred our thought processes in new directions,” says Steve, who, together with the current management team’s John Rayment (operations director), Matthew Pickering (financial director) and Sue Skinner (sales and buying director) – all of whom had joined before 1995 – took the reins of the downscaled six-store business in 2014.
Sue Skinner, Matthew Pickering and John Rayment Sussex Beds’ management team – Steve Pickering,
WE WERE SALESPEOPLE – NOW WE’RE BUSINESSPEOPLE
Reinvention was driven by frequent meetings in which Steve’s team were forced to question the very fundamentals of their operation. These were led by a local business coach, who continues to play an important role in mediating and counselling the team’s decisions.
“We met up every two weeks, and always came out of each meeting with actions to be implemented,” says Steve. “It was – and continues to be – extremely productive. It’s given us structure. We were salespeople – now we’re businesspeople. We strategise, we spread the risk, we study the numbers.”
Steve was determined to empower himself and his staff through knowledge, and to avoid repeating the mistakes which led to the company’s capitulation in 2012. “As long as you learn from your experiences – and you take much more from your failures than your successes – you can only get better,” he explains, recounting an experience in the newco’s early days when he made the decision to outsource the installation of the stores’ fittings: “The job just wasn’t up to scratch. Whereas before we might have asked for improvements and let the installer roll out the rest, we chose to do it all ourselves instead, and get it right.
“Over the years, one voice of conscience – our coach – has turned Sussex Beds into a DIY business.”
The subsequent turnaround saw Sussex Beds awarded various accolades, including the NBF’s Bed Retailer of the Year (under £5m beds turnover) award in 2016. More store openings across the region followed.
Like many businesses, the pandemic proved both cuff and catalyst for Sussex Beds, which in its 2020/21 FY turned a record-breaking profit, opened four new stores and a second distribution hub, and invested significantly in its staff and digital operation – an inspiring effort which earned the business its second Bed Industry Award, this time the Retail Champion of the Year accolade, in 2021.
Although it hurt at the time, the decision to rebuild from the ground up following the administration proved crucial, giving Steve’s team the opportunity to get to grips with the new rules of retail – both in-store and online – before the market became (arguably) more unforgiving.
Sussex Beds’ delivery team prepares to hit the road
Bye bye, brands “I was walking the floor of our Bexhill store in 2015,” Steve recounts, “when a customer selected a mattress from a well-known UK brand. It was priced at £500. ‘Can we do a deal?’ asked the customer. ‘OK’, I relented, ‘£450?’. ‘But Argos has one for £199,’ he replied.
“In that scenario, you can explain that the cheaper model they’re comparing yours against is far inferior, and that your services count for a lot. But, right away, you’re fighting the customer. Why were we allowing ourselves to be a showroom for our online and catalogue competitors?
“That was the moment I decided to move away from selling branded beds.”
The value – or lack thereof – in brands in the furniture industry is a recurring conversation, but it’s rare to see a retailer that has taken their conviction to such extremes. Today, Sussex Beds is a completely white-label business, and is in the process of building its own brands rather than relying on the sector’s established players.
“We always felt like we needed brands to compete locally and add credibility,” says Steve, “but no brands means no price comparisons. They don’t tend to advertise significantly, or add value. Today, Sussex Beds is the brand.”
Steve’s own brands include the higher-end Harrington & Abbott, and Nectus, which targets a younger audience. “If it’s of a standard that meets your purpose, why not have the confidence to put your name on it? Present it to the customer, who can then make an informed choice about whether or not it’s right for them, and it works,” says Steve.
This approach also grants Sussex Beds far greater control of its pricing and margins. Having made another conscious decision to move away from the volume market and next-day deliveries, Steve believes the battle will be won by “great product and honest values” – but admits that this sometimes means turning customers away.
“You can’t work to everyone’s budget, but when/if they do want something good, they know where to come,” says Steve. “It sometimes goes against your instincts as a salesperson – you want all the money you can get! – but doing away with your own margins just isn’t sustainable.”
Accordingly, Sussex Beds’ AOV has undergone a remarkable shift over the years, going from £450 five years ago, to £750 in 2019, to £1050 in its most recent quarter.
In the BHAG It takes skill and confidence to sell profitably, and Sussex Beds takes great care to train its sales staff to a codified standard. Post 2020 lockdown, a new commission structure was introduced which rewards higher AOV delivery with greater proportions of the profit.
“Before we put that into place, we might have seen a salesperson make one £5000-plus order each month,” says Steve. “Now they’re making 3-4.”
Still presenting a ‘good, better, best’ range of floor models in each line, Sussex Beds’ strategy is to start the pitch at the top, giving the customer a taste of the best of the bunch, regardless of any budgetary expectations they might have. “A lot of people want something nice, and, generally, where you start is where you end up,” Steve says.
“People are more appreciative of a good night’s sleep these days, and are willing to invest in it. Thanks to the likes of the NBF (and even the bed-in-a-box brands), they’re also better educated and have a different perception of how much it should cost.”
Although the stores account for the vast majority of Sussex Beds’ transactions, its online business is booming, up some +400% over the past 18 months (albeit from a low base). The website also fulfils a vital marketing role, with more than two thirds of the retailer’s customers (68%) visiting it before going in-store.
“The website feeds our stores, but selling is ultimately about connection,” says Steve, “which is why I’m so committed to bricks-and-mortar expansion. Around 20% of our business is repeat custom, or referrals, and it may take a few years before customer loyalty pays off – but pay off it does.”
Sussex Beds markets itself hard through a range of channels, including digital marketing, direct mail, radio, press and social media. “All our receipts have vouchers offering rewards for referrals,” Steve adds. “It’s far cheaper to market to and via existing customers than to reach new ones!” Early forays into TV advertising have also proved successful to date, he notes.
The retailer’s in-house marketing has fallen into a steady rhythm over the past two years, driving business through compelling product offers and a myriad of additional services and incentives – from discounts for trading in old beds for recycling, to a 0% finance model and 30-night trial (with the purchase of a mattress protector). As well as reinforcing the NBF’s values, the messaging covers almost every conceivable reason to buy, while establishing those all-important pricing expectations.
“The trade can get a bit self-righteous about discounting, but consumers do buy into it – every one of us likes to think we’re getting an offer,” says Steve. “Take Black Friday – it’s now bigger for us than January. Historically, sales dropped
before Christmas, then the weather would put people off going out to the shops – what a great time to have such a big sales opportunity!
“Yes, new sales spikes might detract from others, but sales are becoming much more consistent across the year than they used to be, which is great. Why fight it?”
Gaining Traction At the heart of Sussex Beds’ recovery – and key to its successful expansion – is attention to detail. The whiteboards and flip charts around Steve’s office betray a management style steeped in aims, goals and KPIs, while outside the retailer’s mission statement fills the wall: ‘Great products, great service, for a great night’s sleep.’ But what exactly does it all mean?
Fundamentally, says Steve, the business is concerned with helping people sleep better: “Do you know what would be really powerful? Having a number so you can gauge exactly how many people we’re helping to achieve that each year …”
But he acknowledges there’s a lot to unpack from that statement – and that was just one of the goals of a recent four-day management retreat, while thrashing out some of the BHAG’s finer details.
“Ahead of us is a path to 80 stores,” says Steve, “but if we’re even going to reach 40, we need to continually stretch our thought processes and ask ourselves why and how we’re going to achieve those milestones. Our mission statement really does mean something to our team. It has to – it’s important we all believe in what we’re doing and where we’re going.”
Building on the teachings of the aforementioned business coach, frameworks such as those laid down in Gino Wickman’s bestseller Traction have empowered Steve’s team to build additional checks and balances into his fast-expanding business, while nurturing ambition.
“The trouble with a lot of retailers – and we were in this camp – is that they don’t know their numbers. How many people are coming into your stores (and returning), what are they converting, and what’s the AOV, revenue and gross profit?
“A business’ overall performance is the result of each of these metrics, and more. Every department needs to be accountable, and when it comes to the
Retail Champion of the Year accolade last year Matthew Pickering celebrate winning the NBF’s John Rayment, Sue Skinner, Grace Pickering and
IF YOU DON’T HAVE A GRASP OF EVERY ASPECT OF YOUR BUSINESS, HOW CAN YOU
MAKE IT BETTER?
numbers, you have to take a detached view. You need to know what’s going on each day, not just at the end of each month or year. It’s the only way to control a business. If you don’t have a grasp of all these aspects, how can you make it better?
“The bigger you get, the more rules come into play,” says Steve. “But if you’ve got the knowledge and the right people, you can achieve anything.”
Steve’s jobs The first lockdown placed extraordinary pressure on every ‘non-essential’ retailer, but Steve’s team spent their time wisely, working on store refurbs and migrating sales and product training courses online. Lines of communication were streamlined, ensuring team members would not lose touch with one another, and knew where to turn if support was needed.
The temporary detachment the lockdowns imposed gave Steve some idea of how a scaled-up Sussex Beds might lose some of the values associated with its independent roots, but he’s confident that the brand’s identity will remain intact if the expansion is done right.
“We’re making a £250,000 investment in our IT systems alone this year, which will give us a solid base from which to upscale in a controlled manner,” he says. “If we were to scale straight to 40, 60, 80 stores right now, we’d implode – so we need to make sure all our processes can handle our ambitions.”
Steve says that although there is still some further local potential, the expansion will inevitably take Sussex Beds beyond its current Sussex and Kent territories into Hampshire, Surrey and beyond – all counties with a customer demographic in line with the business’ existing audience. He envisions some new stores, some takeovers, and perhaps even a couple of destinations driven solely by his inhouse brands.
The scale of the ambition is remarkable – but, having heard all sides of the story, it seems to me that in Sussex Beds’ combination of unique product, processes and people, there’s a recipe for success to rival even the nation’s biggest multiples.
“I’m building something I’m proud of, that people enjoy working in and are proud to work for,” says Steve, looking across the office to his wife Paula, son Josh, daughter Grace and other close friends in the company, all of whom have proved their abilities and are passionate about taking this regional operation to a whole new level. “The only thing that could stop us is ourselves”
PEOPLE POWER
Operating from both Dundalk and Manchester, market-leading wholesaler VIDA Living has borne the challenges posed by Brexit and Covid-19 with aplomb, COO David Caffrey tells Furniture News …
www.vidaliving.com
TO THEIR SCHEDULE AT ANY GIVEN MOMENT
David Caffrey
What’s been keeping you occupied in the past week? This past week has been mainly focused on finalising our strategic business goals for 2022 and planning how the business will perform in 2022. This involves working with various stakeholders across the business and identifying future needs now, so we successfully deliver our planned growth. It also included quality time with key customers, forward-planning product launches, etc. As always, the week also included time being spent with various VIDA team members.
Can you outline VIDA’s size and scope? VIDA is a furniture design and distribution business. Our scope is simple – to provide world-class products and services to our customers in each of the markets into which we operate. Our values are at the very core of ensuring we deliver upon this scope. With locations in Ireland and Great Britain, VIDA currently employ 120 people across a range of roles, from warehouse management and logistics to product design and marketing. Our stockist base covers the Republic of Ireland, Northern Ireland and Great Britain.
How well would you say VIDA has fared during the pandemic? The key in periods such as these is to seek out and identify the opportunities that exist to improve your business, and to ensure that you are in a position to capitalise on these in the future. Ultimately, we have used that time to focus on improving various aspects of VIDA. From product development and sales to operations and supply chain, we recognise that our customers’ experience is our brand, and as such we have focused on the desire to improve all areas of our business – so I would say we have fared very well over the past 15 months.
What’s been the greatest challenge, and how have you negotiated it? I would suggest that there have been two equally challenging topics. Firstly, securing the continuity of our supply chain. Global pressures on supply chain are now well documented, so it has been a real test of our resilience to successfully manage the continuity of our product supply. It never stops evolving – sometimes daily – so understanding our market and confidently backing our growth strategy has ultimately been successful.
Secondly, in times of turbulence and change, ensuring your people are equipped with the requisite tools to be able to manage change is absolutely critical. We have invested in a leadership development programme over the past 12 months, run by our talent partners, Peoplewise. The programme covers all management levels of our business, from executive and senior leaders to managers and supervisors. It has equipped our people with the ability to better manage change by building out positive resilience, strategic thought processes and timely decisionmaking.
We are a people business, and the empowerment of our people speaks to the heart of what VIDA is today. In a world of change, we can secure more certainty for everyone by developing ourselves.
How did Brexit impact your business last year – are you well placed to handle it? Three years ago, we formed an internal Brexit working group to identify and manage any impacts that we foresaw coming from Brexit. We currently operate our business from two locations – our headquarters in Ireland and our UK base in Manchester. The existing structure of our supply and distribution chain meant that some of the challenges from Brexit have been mitigated.
However, we are not fully insulated. The current driver shortage is proving challenging in terms of predictability of supply from port to warehouse, along with the additional administration requirements from the exporting of particular products to the UK. We continue to monitor the situation closely, and our partners in logistics have been exceptional in helping us manage the impacts as best possible.
How have your stockists in the ROI fared, compared to those in NI and Great Britain? It would be fair to say that in general ROI and NI stockists compare very favourably, with a strong performance being reported across both regions this past 12 months. Consumer confidence has remained buoyant, and the outlook is favourable.
In terms of Great Britain overall, it is generally accepted that the market has performed strongly over the past 12 months of trading. There has been a noticeable slowdown since the summer period, so, coupled with the impacts from driver shortages and supply chain challenges, it will be an interesting final quarter of the year for the industry.
With fluctuating supply chains and changing consumer tastes, how has VIDA’s product offer changed in that time? We operate a long-established, in-house product development department, which is led by our brand director, Ruth Cherry. Ruth and her team operate a cyclical product development process. Innovation is at the core of our product development process, so this ensures that VIDA are continuously developing new products for our various markets. We review future trends, and collaborate with our customers and sales teams on feedback. It is through our relentless passion for design and innovation that we are able to provide our customers with products that inspire.
Can you give us a rundown of your latest key appointments? In line with our vison for VIDA, we have invested heavily in a number of key areas to acquire the leadership talent and expertise to deliver on our strategic aims.
In sales we have appointed Victoria Bellerby as our group business development director. Victoria leads our sales function across all revenue streams and regions. Victoria commenced with VIDA early last year, and we have been extremely excited by the impact and progress to date in developing our sales function. We have also appointed Karl Bickerstaff as area sales manager (North) in the UK.
In our UK business, we appointed Marc Seddon as our warehouse manager, which has been very successful. Finally, we have appointed Natalie O’Brien as
Darby
Ottavia Ottavia
our senior quality, health and safety manager. Natalie has hit the ground running, and has had an immediate positive impact on the business.
Have any new technological developments/tools/systems made a difference to your business of late? We launched our VIDA app in Q3 last year, and it has proved to be a big hit with our customers. The app enables our stockists to check availability of products, create a shopping list of the products of their choice, and place orders directly through it in real time. We believe that the app offers our customers an alternative touchpoint with VIDA, and one that’s flexible to their schedule at any given moment.
In terms of tools, we are about to launch our new CRM tool, which will be a game-changer for the management of our sales service to our customer and our opportunity pipeline. We are excited by this development, and expect it will provide us with deeper insights into our customers’ habits and future demands.
Along with this, we have also invested in a new warehouse management system, which is currently in development with our ERP partner. We plan to launch this in the coming months. It will enable us to provide an improved quality in service to our clients, coupled with improved operational efficiencies.
What’s VIDA’s roadmap for the coming months? Can stockists expect anything new in the way of products or services? Our roadmap encompasses a number of key deliverables. These include: the January 2022 launch of multiple new product ranges, specifically tailored for each of our markets; the continued investment in our people, with targeted support and development programmes; and the successful implementation of our operations improvement objectives in safety, quality and warehouse management and customer service.
We will also launch our new sustainably sourced range of products. Our customers can expect a range of exciting new products to choose from. So, there is lots for our customers to look forward to from VIDA!
Finally, what’s your favourite range/ model in VIDA’s current product line-up? Oh, a tough final question! I will answer by giving you my favourites in some of our product categories. In dining, it’s the Valent and accompanying Duke fabric chairs – an instant classic. In sofas, it has to be the Vitalia, and in bedroom, I’m a big fan of the Jessica – a very stylish range
