Wood furniture retailer Oak Furniture Land posted record sales of £85m last year and successfully opened 41 additional stores by December 2013, bringing the total to 50. The firm, which posted profit of £9.2m in 2012, was ranked 19 in The Sunday Times Profit Track 100 this year and recently launched a string of TV adverts.
“The retailer has presented an enticing growth story; expanding at a significant rate both online and via its widening out-of-town store network, even during challenging periods in the wider furniture market,” says Greg Bromley, Consultant at Conlumino.
Managing director Jason Bannister talks to Retail Gazette on his business model, plans for the future and his overall strategy.
Why do you think OFL is doing so well at the moment?
We’ve been on a steep upward curve as a business for some time now and I think there are a number of reasons for this. We know that we are selling products that consumers want to buy and at a price point that is affordable. We have also benefitted from having a multi-channel strategy that started online and evolved onto the high street. This means that we’d already established a loyal customer base before we began to open our stores and it was actually pressure from customers that led us to open our first store.
Where are the products sourced?
Our furniture is manufactured in a number of locations, mostly overseas, ( the majority of our sofas are made in the UK ) and it is the job of our overseas team to work closely with these suppliers and our teams back here in the UK to make sure our supply chain is robust and transparent.
I hear that you travel an awful lot. Why do you travel so much?
I think if anything I could be travelling more! But essentially, it is my job to know what’s happening across the industry and keep the business fresh and so it is important for me to be meeting with the right people, whether in the UK or overseas.
Why did you choose to design the products yourself?
I feel quite fortunate that I seem to have a very similar taste in furniture to my customers, effectively I seem to like what my customers seem to like! Therefore I still feel very capable of designing and sourcing our products and feel I am still the best person for this job. An upside to this is also that it does allow me to spend time within the supply chain and valuable time with our suppliers at grass roots level.
Why have you chosen a career in retail and furniture?
After I left school, I got myself a job at B & Q in Burnley which was my first foray into retail and then I joined a local furniture company as a Trainee manager which taught me some invaluable skills and lessons about the furniture trade.
But I’d always wanted to have my own business, so when I saw a gap in the market I bought that first container of solid hardwood furniture and began trading on eBay.
Retail is a dynamic and volatile industry and I think that makes it interesting and exciting - there’s never a dull moment because we have to move so fast all the time. Likewise, I think that the furniture market has gone through some real highs and lows but there is certainly plenty of opportunity.
Where will you be opening new stores?
Our focus at the moment is to open a store in every major town and city in the UK and we have a fantastic team working to find us the best locations on prime retail sites. We’ve had an ambitious store opening programme in the last two years, with 50 stores by the end of 2013. This year, we’ve slowed the pace a little but we’ve had three new stores opening in recent week in the West Midlands, Exeter and Portsmouth.
What is OFL’s strategy and does it have any plans to float on the stock market?
It has been our great quality but great value proposition that has led us to be successful and because we are commissioning furniture rather than buying it to sell on, we have been able to continue to offer great quality at prices the market has not seen before. Of course we are always watching what the competition is doing, but our basic strategy is to make the best product we can at a price that is within reach of as many customers as possible.
At the moment, we don’t have any plans to float the business. Because we have grown so quickly in a short space of time, our focus right now is to continue to develop the business, open more stores and make sure our products remain fresh and attractive.