Interview: Business is flying, says contracts specialist Derek Miller

InterviewFeatures Tue 9th Mar 2021 by Tim Wallace

Interview: Business is flying, says contracts specialist Derek Miller

Interview: Business is flying, says contracts specialist Derek Miller

Feature by Tim Wallace | Tue 9th Mar 2021

Tim entered the KBB world in 2004 with industry title kbbreview. He was appointed editor in 2011 before leaving to go freelance in 2019. In 2016, Tim was named Best Trade Journalist of the year at the Bathroom Manufacturers Association Media Awards. More

While lockdown restrictions continue to hamper retail trade, Scope Bathrooms in Glasgow has benefitted from its long-established focus on the contract market. Tim Wallace talks to co-owner Derek Miller

Q: How much impact has the pandemic had on your business?
A: The major impact came last March when the housebuilding sector closed, but we were pretty much back to normal by early August. Other than a short-term embargo on non-essential spending we haven't altered strategy. The current lockdown isn't as dramatic as the first. Consumers are still spending, although the requirement to close means that new retail business isn't really being generated. 

Q: How much of a lifeline has your focus on contract work been?
A: In 2009, when the last major recession started to bite, being involved in contracts was a bit of a millstone. The banking crash brought housebuilding to its knees. Our overhead was too big and our sales revenue halved. We fell back on our retail business but experienced four or five years of serious challenges. This time has been different, thankfully. The building industry bounced back very quickly and demand has been exceptional. Retail also performed very well up until Christmas. 

Q: Has the government offered you enough support?
A: They can’t do more than provide a sensible timetable as to when showrooms can reopen. The furlough scheme has been very generous and has worked well for the KBB sector. Every decade or so, we seem to be hit with a macro-economic event that causes a re-shaping of the trading environment. The fittest will probably bounce back stronger. Any firm that entered 2020 with poor cash flow or small reserves must be perilously close to the edge by now.

Q: What positives have come out of all this?
A: It gave a boot up the backside to the complacent and forced us to get back to the basics of business: get paid; pay out; manage costs and cash flow. It also provided a timely reminder that business isn't the most important thing.

Q: Any problems with product delays?
A: Yes, I've never known delays like those experienced in Q4, 2020 and into 2021. It was as though the country was trying to squeeze eight months of economic activity into the final three months, and the haulage and port infrastructure simply couldn't cope.

Q: Do you expect a market upturn later in the year?
A: Contracts business is flying so it’s hard to see yet more upturn. Consolidation at current levels would be the best outcome to let supply chains recover. Retail will bounce back robustly once the shackles of lockdown are loosened. Foreign travel will not be encouraged, so investment in the home will be high on consumer outlook.

Q: Should showroom retailers consider e-commerce? 
A: The cost of international haulage has multiplied ten-fold so I'm not sure large-scale e-commerce looks attractive. Retailers just need to wait for restrictions to lift. 

Q: Should there be a tax on online purchasing?
A: There’s been a significant boost to online trading in the short term but I'm not a supporter of 'big tax' strategies.

Q: Are you looking to source products that aren’t available online?
A: For all intents and purposes, this is impossible.

Q: Is the Brexit trade agreement a relief?
A: Yes, given the shambles of international haulage, a no-deal Brexit would have brought the country to its knees. It’s now time for sensible levels of investment.

Q: What’s your longer-term outlook?
A: The country will emerge with high levels of unemployment but the service sector should bounce back quickly. Unemployment could fall significantly from next year. Government debt is the great imponderable. Our sector may be re-shaped, but will likely come through in decent shape.

Tags: interview, features, derek miller, scope bathrooms, bathrooms

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