Not far from Buildbase‘s headquarters on Cowley’s Silicon Valleyesque Oxford Business Park is the first building block of its nationwide 89-branch merchant chain. The outlet is called not Buildbase, but Johnsons Buildbase. After years as part of the business, it still retains its original, independent identity. It’s a major clue to understanding Buildbase’s market approach.
“We’re really not trying to be like the big three merchants – for one thing, if we did cast ourselves in that light, we’d just be the smallest of the multiples,” said regional director Stephen Thompstone. “But, it’s more than that. When we buy a merchant it comes under the Buildbase umbrella; we have central management, marketing and procurement and new staff all go through a Buildbase induction programme. But we usually incorporate the merchant’s original name and it retains a lot of autonomy.
“These companies know their area and what their customers want, so we don’t try to impose a common culture on them. We want the customers to feel that it’s business as usual at their local merchant. We’re not like WalMart. You can’t go into any branch and expect to find a particular product on the third shelf on the left.”
The difference between the outlets, said Mr Thompstone, extends to their mix of products and services. “Branches have products in common but their range overall can vary widely. It depends on their tradition, expertise and local demand. For instance, we’ve just taken over the mixed builders merchants Thompsons in Preston, which is a major distributor of shavings to the equestrian market. We have another branch near the NEC which specialises in exhibition products, and our outlet in Muswell Hill High Street has a ’boutique’ kitchen and bathroom department.”
The degree of ‘decentralisation’ at Buildbase is one reason the company doesn’t have a distribution hub.
“Central purchasing manages overall purchasing requirements, and branches are also given lists of preferred suppliers,” said Mr Thompstone. “But within that framework, we give them an element of choice. Central distribution is a cost we don’t need. Instead, we work very closely with our suppliers. On softwood, for instance, we have Hoppings distributing to our branches in the south and Severn Timber in the north, both in association with SCA.”
Decentralised management
The decentralised management approach at Buildbase also goes upstream to its parent, building products and merchant group Grafton.
The Dublin-based company launched into the UK builders merchant market with the acquisition of Johnsons in 1996. But as Buildbase grew – and it now employs 2,000 people and turns over £300m – the management team were increasingly left to their own devices. “Grafton is very challenging and looks for performance, but in day-to-day terms it is very hands-off,” said Mr Thompstone.
Buildbase’s growth has been driven by the ambition to achieve UK-wide coverage, principally of the major urban centres. But the company is not intent on buying up every independent merchant it can. “We’ve never said ‘we must have so many branches by next Wednesday’,” said Mr Thompstone. “We buy as the opportunities arise.”
It’s also part of the Buildbase culture to expand “benignly”, whether it be taking over a single branch operation, or one of its bigger purchases like Niall Bailey or Lakes.
“Their reasons for selling to us vary, but when we take over a company, it’s never unwelcome,” said Mr Thompstone. “For the owners of some businesses, it is about the pay cheque. Others care passionately about the future of their employees and their management team, or the continuity of their company – each case is different.”
Wood products heritage
The timber and sheet materials element of Buildbase branches also varies. Some, like the ex-Lathams Building Supplies outlets, for instance, have a strong wood products heritage, a number have service mills and a few branches even employ bench joiners to undertake bespoke work. Others are less involved but overall, said Mr Thompstone, the company is highly committed to this part of its business.
“It accounts for around a fifth of our total sales, with nearly a half in heavy side and other products, kitchen, plumbing, heating equipment, plant hire and so on making up the remainder.”
Reflecting the importance attached to wood, three years ago Buildbase launched an initiative to put “timber champions” into many of its branches.
“We’re passionate about training overall, but also recognised that timber requires very specific knowledge,” said Mr Thompstone. “We got together with SCA and Jim Coulson of the Institute of Wood Science and decided to put trainees through the SCA/IWSc Timber Studies Foundation course. We’re now enrolling 10 people on the course each year. And it’s demanding. We don’t get a 100% pass rate every time.”
Once they’ve taken the course, the “champions” might spend 80% of their time working with timber products. “They are expected to have an all-round understanding of the business, but timber will be their area of expertise.”
Further underlining Buildbase’s ambition in timber, it has launched a major environmental certification programme. “The question of sustainability has become more and more prominent with our customers, especially contractors working on government and local authority projects,” said Mr Thompstone. “To meet this demand, we’ve achieved Forest Stewardship Council chain of custody certification for mouldings and planed timber products at every branch and are the first merchant to manage this.”
Buildbase’s aim is to spread certification to other products, going where possible for FSC accreditation, but adopting other schemes, including the PEFC‘s, where it is not.
“We are also currently working closely on the issue of sustainable hardwood sourcing with James Latham,” said Mr Thompstone.
To publicise and celebrate its FSC success, Buildbase, with SCA, sponsored the Salvation Army’s “From Darkness into Light” garden at the Chelsea Flower Show, providing all FSC-certified timber for the central feature, an imposing 6m-high bandstand.
“We had a lot of media interest in the garden and had the presentation of our FSC certificate at the show,” said Mr Thompstone.
Buildbase, he added, is also constantly on the lookout for ways of developing its timber offer, with latest additions to the range including Pinedeck, the BBA-approved Brazilian structural-use plywood from RKL.
Timber promotion
The company backs moves to help develop the overall UK timber market too. “We’re members of TRADA and support wood. for good,” said Mr Thompstone. “We are also in the early stages of talking with SCA and other partners about the possibility of organising a UK ‘Wood Week’ to help promote timber and, particularly, to dispel the still widely held myth that everything to do with it is ungreen and unsustainable.”
The latest move in Buildbase’s overall strategic development has been the opening of its first purpose-built brownfield site outlets in Crawley, Brentwood and Stratford, east London. At first glance, these might create the impression that the company is departing from its locally-oriented approach, but Mr Thompstone insists it is not. The ground-up branches will be used “to fill gaps” in the Buildbase network where that can’t be done through acquisition, and they will be geared to local requirements. The company is clearly intent in remaining, to coin a phrase from chief executive Kevin Middleton, the “national independent”.
