In its first year of business back in 2015, Snug Kitchens in Newbury took orders worth £700,000. The plan was for a ‘Snug Two’, and maybe a workshop. But while some retailers fixate on driving growth, owner Nick McColgan tells Tim Wallace why he’s resisted the temptation.
Just lately, Snug Kitchens has become a great case study in how to survive a pandemic. Orders haven’t been as regular, appliances haven’t arrived, but owner Nick McColgan has found the right mix of suppliers, stuck to doing four kitchens a month, fronted every project himself and kept a close eye on cash flow.
“We’ve found our way,” the former Bulthaup and Poggenpohl designer explains. “We’ve found a niche. We’re now at about £1.1m turnover so we’ve stayed quite small. I don’t have borrowings – it works very well. We looked at buying another showroom and a workshop but the figures didn’t work. I’d end up doing stuff I don’t want to.
“Our team of four have the manpower to deal with quite complex projects rather than 100 kitchens at around 10-15 grand each. It means the team is happy because we’re not just flogging boxes.”
Snug supplies German furniture from Pronorm, Rotpunkt and Nobilia but also uses English brand Fordbrook as a workshop and has just taken on Loxley, confident that the brand’s troubles are behind it.
Most orders are for £50,000 or more and, despite COVID, its latest sales year – from last May to this – has been its best, although 20% down on where orders would normally have been.
“We’ve been lucky,” McColgan admits. “If I’d been dependent on cash flow it would have been very challenging because business came in fits and starts.”
Adapting to new technology was just one of the challenges presented by lockdown: “I was looking after the kids all day and then working until midnight,” he explains. “And customers are more reluctant to make a commitment online. Working on Zoom you’re on a level with a guy working out of his garage. Customers are saying, ‘leave it with us’ – and nearly always it’s because they’re not comfortable with the cost and want to do more research on you.”
McColgan furloughed two of his three designers at the beginning of the pandemic as Snug went into “panic mode”.
“But I played it straight,” he adds – “they just sat in the garden on full pay but my other designer was working flat out so I brought them both back in within a couple of months.”
Rather than employing experienced designers obsessed by targets, McColgan prefers to train up interior design graduates that can quickly add value but do things his way.
As COVID restrictions ease, he fears the autumn may bring another flare-up. But the big story going forward is more about the “ridiculous delays” he’s suffering with appliances.
“In a scenario where a couple of suppliers have monopoly status it’s been very challenging,” he says. “If you want refrigerators or dishwashers, forget it – they’re pretty much unobtainable. There are massive issues with small components from China. Getting a container across has gone up in price by over 60% in the last 12 months.”
That said, McColgan is expecting a positive end to the year. “People have got money burning a hole in their pockets because they haven’t been on holiday,” he says. “So their 30-grand kitchen has turned into 40-50 grand and now includes a nice area outside with a bit of landscaping. And there’s a big market for second homes; I’m hearing a lot about people buying a place on the coast because they’re not going away anymore.”