TTJ took a trip recently to North Wales to check on the progress of the Archwood Group – the overarching company that owns the Richard Burbidge, Atkinson & Kirby and Masons Timber brands.
A lot has been happening at family-owned Archwood in recent years and the business is now experiencing something of a rebirth, with a new strategic vision and multi-year plan to propel the business forward.
The brands of Richard Burbidge – which produces mouldings, stair parts and decking components – and Atkinson & Kirby – focused on flooring – are of course longstanding brands established in 1867 and 1903 respectively.
Masons Timber produces all manner of specialist bespoke mouldings and is a big supplier of the coffin industry.
I met up with Josh Burbidge, Archwood managing director and his father Richard Burbidge, group chairman, at the Chirk head office, manufacturing site and distribution hub.
Josh Burbidge has been at the family-owned business since 2006 and was appointed managing director in January 2021, after previously being flooring director at the Atkinson & Kirby business.
There had already been change and restructuring in the prior years under the leadership of Tony Miles, who is now vice-chairman of the Archwood Group, helping to modernise the business.
This included consolidating all sites and significantly reducing the group’s cost base, optimising resources and improving capabilities for growth.
PANDEMIC CHALLENGE AND NEW CHAPTER
It feels like a new chapter at the business and it was, ironically, the onset of the Covid-19 pandemic that proved a key moment.
“We had gone into the pandemic in a tight financial situation, but we received support from the family-owned investment company which owns the Chirk site,” said Josh Burbidge.
Mr Richard Burbidge said the pandemic proved to be an important contributing factor to fresh direction and impetus for the business. “What it did was help us make some decisions,” he said.
2020 became a year of restructure and reset, added Josh Burbidge.
“We wanted to focus on our strengths and on what the brands are known for,” he explained. “We had lost a bit of focus and overcomplicated things, expanding into products ranges and markets that weren’t really our forte.
“So we took a step back, restructured our product portfolio and implemented a simplified pricing structure to make it easier for our customers to work with us.”
Richard Burbidge admitted that the pricing structure for products had needed an overhaul as it was too complex and the company wanted to provide its customers with solutions, not unstructured elaborate price files.
So three of Archwood’s key focus points became pricing, product range and people.
On that last point, a new senior team was formed to support Josh Burbidge as the new MD at the start of 2021.
Mr Burbidge, who became the fifth generation to lead the family business, set about applying his product and market knowledge to all three brands in the company, ensuring its strategic objectives were being successfully delivered.
The senior team comprises Lee Burford (director of operations), Jordan Parry (director of sales, England and Wales), Elliot Tait (head of sales, Scotland), Craig Holt (director of marketing and business development), Hayley Scarratt (head of finance) and Jenna Bellis (head of human resources).
The announcement came as part of a strategic plan to enhance customer support, achieve long-term profitable growth for both the business and customers and accelerate its efforts on sustainability.
NEW STRATEGY
Archwood posted a significantly healthier set of annual results in December, 2021, with a 16% growth in turnover to £26.7m and a modest profit – a great turnaround following a few years of sustained losses.
On the back of these much sounder financials and company performance, Archwood felt it was the right time to launch a new three-year strategy and plan for growth.
“Everything we had done was delivering results and there had been 18 months of delivering a positive bottom line, so it was the appropriate time to approach the board and talk about a new three-year plan for the business,” said Josh Burbidge.
In the strategy are key commitments:
- Achieve financial success and re-invest a third of post-tax profits back into the company
- Do business the right way with high values at the heart of everything
- Focus on people – retain, train and recruit the best
- Keep the business in family ownership
- Reward people for commitment and performance, an updated IT infrastructure
These inform five key values: reputation, responsibility, stability, transformation and evolution. Strategic developments include aiming to deliver high customer service levels, investment in the factory and IT infrastructure, as well as reducing the overall environmental footprint.
Among its year one aims are plans to implement a new ERP system to improve efficiencies, start redesigning the factory layout to ensure future growth and target the UK specification and joinery manufacturing sectors.
In year two it will continue to improve the factory, achieve Investors in People (IIP) accreditation, plus enhance digital capabilities.
Year three targets include closing gaps in geographical coverage and quarterly communicate environmental impacts.
FACTORY INVESTMENT
The factory area at the Chirk site is of a considerable size. Efficiencies being planned include reducing the amount of manual handling and looking at automation and robotics, with a focus on the value-added area.
Josh Burbidge said the Group planned to emphasise to customers this last point – that it is a manufacturer of value-added products, not only a distributor of products. The company sees its factory operators as multi-skilled individuals, rather than just operating the same machine as in the past.
Over recent years Archwood has overhauled the distribution operation to include a distribution fleet, a parcel carrier and a pallet carrier to deliver products based on weight and size. Distribution costs have halved.
A pick-and-pack added value project service will increase over the next few years, so consumers and installers can get all their products whenever they want at the retailer.
New material handling vehicles are being purchased from Uni Carriers, with three new electric trucks received in January.
As well as electric forklift trucks, the site already has renewable electricity and the group is looking at potentially investing in solar panels and further waste recycling efforts in order to further reduce carbon footprint.
BRAND STRENGTHENING
Archwood’s three brands are of course very strong, but the company believes that it can’t take them for granted and wants to strengthen each one, with a fresh understanding of knowing its marketplace and customers.
The core Richard Burbidge business is the largest part of the Group and its customers include DIY retail, trade merchants and the joinery industry.
The Atkinson & Kirby flooring business is a distribution-only business these days, sourcing its products globally – from across Europe, China and North America, with longstanding commitments from manufacturer suppliers.
“I think we had forgotten the value of the brands,” said Josh Burbidge. “We need to be proud of the brands which have quality and a reputation. Ultimately, we want to be a business and brand people can trust.”
A big, new customer for the Richard Burbidge brand is expected this summer – a customer that was attracted to the reputation of the brand.
Watch out for new brand strengthening initiatives in the market this year, with some product innovation news in September for both the Richard Burbidge and Atkinson & Kirby brands.
In terms of customer trends on the Richard Burbidge stair component side, the Group is seeing more use of a mixture of oak and glass and there is a requirement for a reduction in fitting complexity.
“People don’t want so many brackets and they want cleaner lines and a simpler look, with a product that is sustainable,” said Josh Burbidge.
“It’s the same kind of mentality for the decking range, with glass systems being very popular to let light in.”
In the mouldings business, the trend towards fully finished products continues, with finger-jointed products being more available and accepted.
The Atkinson & Kirby flooring business is seeing a popularity for a natural finished look, including a textured grain and flat lacquer. “The tones are natural, rather than the aggressive black and whites.”
The Group sees an increase in project-led business in the future.
“We want to be different in how we approach the stockists,” said Richard Burbidge.
“Rather than stocking the rack, we want to move to a position of how can we meet the project needs? You want to be able to deliver on a project-by-project basis.”
This involves a two-way dialogue with customers and developing a community of installers who are loyal to install the Group’s products.
The Richard Burbidge business already has several staff dedicated to supporting the homeowner, generating project lists for people to go to stockists with.
A bank of ‘before and after’ project photos are available on the Richard Burbidge website, providing a useful and realistic way to show what’s possible.
FUTURE
The Group reports that it is on track this year to repeat its financial performance of last year.
“We see the business continuing to perform well, with some increase in turnover this year from an expected large customer coming on board,” said Josh Burbidge.
But he said price inflation was having some impact on demand.
“People have been fearful of the price increases over the last 12 months and some people are delaying projects and that is causing problems in the market place. Demand seems to have held up relatively well, but it has calmed down from last year.
“We believe timber will become more popular as a material of choice, which is good as it has been undervalued. People will value it more in their homes, as it ticks a lot of boxes.”
Challenges include transportation and logistics costs, particularly containers from China, impacts on Ukrainian oak supplies and reduced numbers of eastern European delivery drivers.
“I do not see our market growing massively over the next five years so we need to focus on getting market share by delivering better quality service and innovation to our customers.”
“We have a plan now to keep the business in profitability and continue to enhance it and what it will deliver for all the stakeholders.”
“We have had a long tradition over 60 years of being a growing company, with the last five to 10 years being a blip,” added Richard Burbidge.
“Tony Miles has done a very good job in getting us back on the right track and I feel confident in the future of the business under the management team and its new strategy.”
