Oak Furniture Manufacturing UK
Oak Furniture Land now gets around 65pc of its revenue from shops on retail parks and the remainder through its website. The company had 36 shops by the end of last year, and turnover increased 140pc to £85m in the year to the end of September. Profit before tax climbed to £9.2m from £3.9m the previous year.
The plan now is to open a shop a month for the next three years, and to take premises on all the UK’s most successful retail parks.
As a relative newcomer, Oak Furniture Land has been trying to build up its reputation with the big landlords, and the weak economy has given it opportunities.
“Institutional landlords don’t like unsafe bets and if the market was buoyant, on an expensive retail park they would not have wanted to deal with us, ” Mr Bannister acknowledges.
However, the company has not taken on debt to fund its expansion, paying for it out of its profits. Mr Bannister remains the sole owner of the business. “Once they look at the accounts they’re OK with us, ” he said.
Despite the wave of big-name retailers going under, there is still “always a queue” for the prime patches, said Mr Bannister. The business has been able to maintain profitability despite the higher cost of running physical shops because it is still run in largely the same way it was when he started it, he said.
“We cut out the middle man at every stage, ” he said. The company uses its own delivery drivers and vans, so it is not paying couriers, and doesn’t buy furniture from wholesalers, but commissions it directly from factories in India, China and Vietnam, as it has from the outset.
Mr Bannister started his working life as a furniture salesman in his hometown of Burnley, rose through the ranks to become a regional manager, and was taken on by a consumer credit company who were impressed by the amount of furniture he sold on finance deals.
One day, feeling disillusioned about working for someone else, he saw an ad for Mexican pine furniture available from a wholesaler. He had recently remortgaged his house to build an extension. Instead, he bought a container of furniture for £10, 000.
“I didn’t have a clue what I was going to do with it, I just knew it was great value. When it arrived three months later, my job was going much better so I stored it in a chicken shed until I worked out what I was going to do.”