The boss of Marks Electrical says he is continuing to scoop up sales from the big UK retailers.
Mark Smithson, who founded the Leicester-based business 35 years ago, said a combination of decent stock levels, free next day delivery and investing cash back into the business had helped it continue its double digit growth.
Speaking to BusinessLive he said the group was also continue to build brand awareness in a challenging market.
Mr Smithson spoke as Marks announced sales of £43.1 million for the last six months – up 15 per cent on the same time last year – as it took an even bigger share of the UK white goods and electrical appliance market. Annual turnover will approach £100 million for the year, the business said.
While there has been pressure on margins, which the business expects to ease, cash in the bank has also grown from £3.9 million a year ago to £7.7 million.
Right now the business – which has around 200 staff and plans to add another 20-40 in the coming months – has a 4 per cent share of the overall online electricals market and a 2 per cent share of the “major domestic appliance” market which it wants to grow to 10 per cent.
Mr Smithson, who raised £30 million for the business through a listing on the AIM stock exchange last year, said the tough consumer environment had polarised shoppers – while some opt for cheaper models of fridges, washing machines and tumble dryers, others are investing in higher quality, cheaper to run makes, which have potential to last them longer.
He said the business was also better placed with better stock levels than it had been a year ago when global production had slowed due to the pandemic.
He said: “Last year we had to buy what we could get hold but we’ve now moved a lot of that and changed our buying habits. We’ve got a far better inventory now and are turning it around quicker.
“Because the overall market is down it’s not a major problem buying stock because manufacturers don’t want to be left with a big surplus on their hands. Bigger retailers are pushing back on stock and manufacturers are keen to get rid of it quickly.
“Brands want to spread their risk and see us as a credible alternative to the likes of AO, John Lewis and Currys. They are taking us seriously.”
He said as well as free next day delivery, Marks has set up its own in-house installation team for gas appliances and integrated appliances such as dishwater. He said that ensures customers will get a guaranteed level of service.
Mr Smithson said: “We sit in the perfect position, at the centre of the universe in Leicester. It’s good for attracting talent and exactly five hours from Penzance and five hours from Glasgow and that cuts down on all the moving parts of the business.
“We have a simple model but it works very effectively.
“Even though the consumer environment is tough, if you’ve got the right offering and right price, with free next day delivery, that make it very easy for customers to choose you.”
Finance director Josh Egan joined the business to help it navigate last year’s flotation.
He said: “We’ve added lots of new team members and put in place better business processes since then, and gone from £30 million turnover in 2020 to getting on for £100 million now.
“That’s down to a whole host of things. The biggest thing was during Covid, rather than benefitting from growth and taking lots of dividends out of the business, Mark invested back into the business, buying more stock and adding more people and really bolstering the team.
“That also means we have more to spend on marketing – this year it will be £5-6 million which will be used to convince people that we’re not a small operator any more.”
