MKM Building Supplies is about to open its 100th branch. The Hull success story has reached the milestone in 27 years of trading, having been launched by pals David Kilburn and Peter Murray. From a team of five in their home city, the nationwide company now employs 2,500. David Laister caught up with Mr Kilburn ahead of a trip to celebrate the latest addition in Bromsgrove, Worcestershire.
“We never thought we’d open more than one branch when we started, how we got to 100 is a bit of a mystery.”
David Kilburn places modesty before a plan as solid as the walls MKM customers build, that materialised as it became a merchant renowned for quality of service.
He and Mr Murray worked for Harcros, that was until Mr Kilburn - posted across the Humber in Grimsby - was made redundant, two years before Jewson pounced, and later closed. “We’d been pals for years, and I asked ‘how do you fancy starting up on our own?’. We had some help from people and off we went.
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“The first business we did was to supply plumbing and heating products to the caravan industry, but it was always the intention to widen to building materials. We continue to have a very good relationship with the caravan manufacturers, hence MKM Leisure (a dedicated division operating out of Stoneferry Road). We like to think we are quite an important part of the supply chain to the caravan industry.”
It was a pull of a different kind that set MKM on the road to becoming a leading national player, with the foresight to empower the key people at the helm of each outlet.
Branch directors up and down the country hold a 25 per cent stake, something that sets it apart from competitors.
“Expansion came from the business model. It was an owner-managed business, and people came to us wanting to open branches, wanting to run and manage their own business, so we were quite fortunate we had hit on that idea and that’s pulled us through some difficult times,” he reflected.
Just before the most difficult of times hit, the coronavirus pandemic, MKM had celebrated 25 years. And it is further credit to the team, now under the majority ownership of Bain Capital since a 2017 secondary buy-out, that the expansion remained - and remains - firmly on track.
A further 30 branches were eyed back in February 2020, having just opened number 70 when the quarter of a century was chalked up.
“Apart from the three weeks we had to close, we fared well,” Mr Kilburn said, reflecting on the pandemic. “People were at home, or furloughed, had nothing to do and had money in their pockets. They couldn’t go anywhere so they spent it on their homes - interiors and exteriors. In a 12 to 18 month period our general public sales were a much higher percentage of the business than normal. It compensated far more than the downturn in trade business.
“It has righted itself, but there’s no fear about the immediate economy coming through the accounts, with the construction sector often at the fore. The trade business is still very strong, it is not our experience, at the moment, of recessionary times as everyone would have us believe at this moment.
“Materials in the supply chain have been the biggest problem, with energy costs and polymer products extremely difficult to get hold of, which itself means prices are hiked up way beyond inflationary figures. Timber was another with some sort of fall-out between USA and Canada affecting the price as they looked over here for supply. We pass the price increases on in the main, we’ve been able to do that so far. It may have slightly affected volume, but not that much, though we’re not running at double digit in terms of volume growth as we were last year.”
A new venture has also emerged this side of the lockdowns, MKM Home - a showroom experience aimed entirely at the homeowner. Hull - where else - has seen the first creation, aided by an acquisition of fellow city business Brooke Ceramics. Grimsby is about to welcome a second, on a smaller scale, but there is caution about committing to a national roll-out to mirror the big brother division of builders' merchants.
"It is still early days for us, it only launched 10 weeks ago, and while we’re experiencing a significant uptick in the business, we’d expect that. Investment was made and it is definitely the best showroom in Yorkshire, the North East and maybe in the country. It is very well appointed, we get lots of enquiries, but a move like this takes time to turn into gold.
"We’ll have a better perception by the end of the year, and better feel for how we are to take it forward. What we've created in Hull is a unique facility for the area, and we hope to attract people. People in Hull have gone to Harrogate, Leeds and Doncaster to see some larger showrooms, our aim is to reverse that and get people coming to the city, to see what we have to offer.
In terms of the business make-up now, Mr Murray, who remains a close friend and joins him at the recently renamed MKM Stadium for Hull City games, sold his shares in 2006.
It was then that 3i Group and LDC, part of Lloyds Banking Group, invested, with current majority shareholder, Bain Capital, buying them out in early 2017. At that point it had 47 branches, underlining the pace at which it has progressed. It is now a £658 million turnover entity.
“Overall trade is quite happy, and we’ve got significant expansion plans,” Mr Kilburn said. “That will include continuous openings of new branches to the tune of 12 to 15 a year with a fair wind, and other acquisitions where we have opportunity to, if someone offers us a business we find attractive.”
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