When Peterborough-based retailer Premier Kitchens & Bedrooms went into voluntary liquidation in November 2019 it sent shockwaves across the KBB industry. With an annual turnover of around £10m, the company had traded from showrooms in Peterborough, Bedford, Northampton and Wellingborough for over 27 years. So what were the main reasons for the company’s surprising demise? And what has former MD Iain Forsythe learnt from the experience?
Q: Where did things go wrong for Premier?
A: The market changed with Brexit. We were in a replacement market where people had a choice of whether or not to buy a kitchen. That shrunk the market. We also had problems with a gloss vinyl door manufacturer so we were having to replace doors under warranty. Then Brexit was extended, which was the hammer blow. We tried to do a CVA, which was rejected by a major creditor, and we had no option but to close.
Q: Where did you go from there?
A: We still had the machinery to manufacture and did that pretty much straight away with PKB Trade. After I got over the embarrassment and annoyance I realised the show must go on. In January 2020 we started doing what we’re doing now. I act as chairman and don’t get heavily involved. The market and suppliers have responded very well. We now do 85% to the trade. We’re heavily involved in office to residential developments and smaller builders.
Q: What lessons have you learnt?
A: Large standalone showrooms are not the way forward. The section where value for money counts is the market we want to trade in.
Q: Do you sympathise with showrooms over the latest lockdown?
A: It’s necessary. I hope people are flexible and use this as a platform to change. It’s now about the survival of the fittest.
Q: What approach should retailers be taking?
A: It’s important that the leaders lead people in the right way. People on social media can brainwash retailers into thinking COVID is the end of the world, but there will be others who’ll say this is a great time for a new beginning. The problem in business is that you’re on a hamster wheel. My hope is that every business leader takes stock and asks if they are proactively or reactively running the business. You have to think about where people go to buy a kitchen. Recommendation is massive now, social media is massive, but get an end result. Set a target.
Q: Has the government given enough financial support?
A: Too many people ask the government what it can do for them. But the Brexit deal was a fantastic Christmas present. It takes away the ability of so many businesses, particularly those supplying parts from Europe, to up their prices with a tax and say, ‘sorry it’s your fault for leaving the EU.’
Q: Are you expecting a market upturn later in the year?
A: Without doubt. The live for today feeling will be there. I see a massive bounce in 2021, but I feel for the small independent people who don’t have a way out unless they go to an accountant, solicitor or bank who will charge them a fortune.
Q: Do you expect many smaller businesses to collapse?
A: It’s in nobody’s interests to liquidate a business that was successful prior to COVID. Creditors wouldn’t get paid so major suppliers will provide more credit and longer credit over a structured period to keep people working. You may also find buying groups have more influence. Euronics is a classic example of getting the best deal from manufacturers and you may well see that in our industry.