When local businessmen Lee Appleby, Chris Barnes and Russel Millar acquired Colchester-based G&M Plumbing & Heating in June 2023, they immediately set about transforming it into a showroom-focused operation – Appleby tells Tim Wallace the full story.
Q: How did the takeover come about?
A: The company was for sale. The previous owner fell out of love with the car for personal reasons. I am a partner in another local company called Cube Installations and was a client of my fellow managing director Chris Barnes, a former salesman at Graham Plumbing. We had talked about business opportunities. He has been in the industry for 25 years and I have extensive installation experience. I know how to run a business, but I'm not a retail expert. Chris brought some of his customer base with him and it was an instant sales win.
We also acquired another local store – Sinks & Taps Superstore – so it's bigger than we planned, but you have to take advantage of the opportunity when it comes. It wasn’t a broken business – it just needed investment.
Q: How much money have you invested?
A: Approximately £120,000 in showroom but £300,000 in total. The former company had an annual turnover of £970,000. In our first year we made about £1.5 million. This fiscal year we are up 16%. Everything is going in the right direction, although there has been a decline since March.
Q: You have also worked with The IPG, which supports independent businesses. How big was the benefit?
A: I was skeptical, but it turned out to be a good move. In their eyes we were doing well, but now we are in their highest band. They ensure that we have good purchasing power and have around 250 members, so a large group. We get financial benefits, discounts etc. We now market them with the dual brand “G&M powered by IPG”.
Q: Which brands do you supply?
A: Roman, Matki, Coalbrook, Merlyn, Roper Rhodes, Geberit, Roca, Hansgrohe…. i.e. most mid- to high-end brands. We try to offer products exclusive to showrooms.
Q: How would you summarize your business model?
A: Some will remember G&M as a great trading desk with a virtually non-existent showroom. But now people tell us it's like entering a new company. We changed the original brand mix by about 50-60%. We have approx. 3,000 m² on 2 floors. The trading counter is on the ground floor and the showroom is on the first floor.
We agreed from the start that we should examine what we sell and whether it retains its place in the business. We ask suppliers to challenge us and tell us what sells and what we should display. We also do small construction projects of 5 or 6 houses, but that only accounts for a few percent of the overall business.
Q: Is there an e-commerce site in the store?
A: No, but we do SEO, advertise in some trade magazines and have quite a presence on social media.
Q: But you don't intend to sell products online?
A: I've spoken to other retailers and they have mixed views. I would think about it, but it's a pretty big investment and the logistics are difficult. However, we offer zero percent financing to really focus on the younger demographic. I would never say never to e-commerce, but I have to be convinced that the investment is worth it and that we can handle it. We looked at it and came to the conclusion that it doesn't do much in the bathroom showroom space.
Q: Are online discounts frustrating? Even Hansgrohe is now on Amazon…
A: Yes, and it devalues the product. Things are even worse on the trading side. Sometimes there are problems with quality or delivery. On Saturday we had three people buying at a commercial counter who were missing parts of their bathroom. They would never buy online again. They buy it because it's £30 cheaper, and then when it turns up it's out of waste, so they end up spending more. By selling mid- to high-end products, we are not affected by online prices. Some say they come to us for this knowledge.
Q: And you also offer installation?
A: We use our sister company Cube, so it feels like everything is under one roof. We do 20-25 installations per year. We don't push it in our advertising because we have a large trading base of customers. Some are heating engineers and plumbers and we don't want to seem like we're taking their work away – it's a fine line
Q: How much growth do you expect from the showroom side?
A: It took us a year to get to page 1 of Google. The business was 80-90% trade oriented – now it's more retail, but artisans have started sending their customers. We have lifestyle furnishings, we even have scent diffusers, music, plants, soaps and accessories. Most of our customers say the showroom is head and shoulders above other stores in the area. A parking space is another big advantage.
Q: What are the most popular trends right now?
A: Mostly the colors – brass is just great. This time last year that wasn't the case and we were almost at the stage of taking it down. This year we can't get enough brass shower enclosures and Atlanta furniture.
Q: Summarize what you learned from the acquisition?
A: We probably underestimated how much we would have to invest to get the business to where it needed to be. We budgeted a lot less than we ended up spending, but other than that I have no regrets. I wouldn't change anything, not even the name.
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