By joining the brand portfolio of timber specialist James Donaldson & Sons (JDS), Scottish independent retailer Kitchens International aims to accelerate its move into bathrooms and home interiors. Tim Wallace talks to MD Gerry Watson to get the full story.
Q: So what was the background to the deal with JDS?
A: It happened accidentally. We weren’t looking for anyone. I was on a webinar with JDS CEO Andy Donaldson, we connected afterwards and he said he’d be interested in investing in the business. I told him we’d be interested in talking – it was as simple as that.
Q: What appeals to you about the brand?
A: It’s a decent-sized business but still with a family feel. I really like their culture and core values, which are very similar to ours. It wasn’t a hard-nosed investment banker coming in and stripping us. Being part of a much larger organisation offers a different skill set and mind set. They’ve got a new entrepreneurial board, so for the future security and longevity of KI it’s the perfect move. It’s an exciting future. We’ve now got seven job adverts out for designers, project managers, installers and design technicians.
Q: And you’ve expanded your portfolio?
A: Yes, we’re entering more of the interiors market as opposed to just kitchens. We had decided all that prior to doing this deal and it sits completely in line with what JDS are doing. In the first lockdown we opened a bathroom studio. We took on 1,000sq ft in a big furniture store in Tillicoultry near Stirling. We’ve also changed the head office showroom and put in bedrooms, home offices and home bars. People are investing more in their home because of the pandemic. We’ve seen an upturn in those areas. JDS already do bathrooms from the builders’ merchant, they do kitchens but at a different level of the market, they do home offices, so there’s a synergy there.
Q: Will KI expand its showroom network?
A: Yes, I don’t see us going for a megastore model but we’ll open more stores. JDS are already south of the border with other businesses and they certainly see us being south of the border too. Showrooms won’t go away. Things will obviously become more virtual and more augmental, but I think I’ll be retired before then!
Q: Tell us more about the new bathroom offering…
A: We’ve partnered with Villeroy & Boch and we’ll expand that side but I’d rather we took tiny steps at first. Reputation is everything and we don’t want to mess it up before we get going. It will be mainly residential and we’ll also do installation. We’ve brought in dedicated bathroom designers for the bedroom and interiors side. We’ve also started doing commercial interiors. We’ve refurbed a few restaurants and done work for the Radisson hotel group over the last couple of years. But there’s not a lot of that happening at the moment so it was natural to go into home interiors.
Q: How’s business been during the pandemic?
A: Good – we’re ahead of 2020 when we were shut in April and May. We’ll finish the year around 10-12% up on any previous year. Turnover for the last three years has been circa £12m.
Q: Will takeovers become more common in the KBB retail space?
A: Yes – if a successful business wants to continue to grow, the easiest way is to take in the market share and swallow up either part of the supply chain or part of the competition.
Q: Has the deal presented challenges?
A: The challenges as we integrate won’t be so much with the processes as the IT systems. Thankfully we all use Winner from Compusoft but for accountancy and management information JDS use a different package.
Q: Are you expecting an uplift in business?
A: For the next 12-18 months, but beyond there it becomes difficult because we don’t know how the Government is going to get back what they’ve put in to the country. That’ll affect us and it’s always a nagging doubt at the back of the head.