And another one gone, and another one gone
Another one bites the dust
Hey, I’m gonna get you, too
Another one bites the dust
Once upon a time, barely two decades ago, a little builder’s merchant was set up in Wales. Because that was the sort of thing that someone with a bit of industry knowledge, some cash in their back pockets and a bucketful of drive did back then.
That acorn put down roots and spread, gradually at first, then more steadily, but was still, for many years, a smaller independent in a market dominated by national chains and long-standing family-owned concerns.
When I joined BMJ in 1993, our January League Tables featured all the top performing builders’ merchants, most of whom no longer exist in the format they did then. Huws Gray (for, yes, of course, it is them of whom I write) wasn’t even on that list then having just a handful of branches.
Yesterday, Huws Gray managing director Terry Owen put an end to months of speculation when he announced that the company had bought family-run East Anglian stalwart Ridgeons, thereby doubling its already astonishingly sizeable turnover. That’s not the sort of purchase you make on a whim, and the change found down the back of the Huws Gray sofa has been supplemented by a big bag of cash from Inflexion. Which, along with the recent merchant investments made by Bain, Cairngorm and Marlowe Holdings, mean that the money people think this is an industry worth sticking with. Which is nice, I suppose.
What does it tell us about the industry that the Ridgeons family have cashed in their chips and left the table? Only that nothing is forever. Only that shareholders entitled to make decisions that suit them rather than everyone else. Only that Fortis and PHG are going to have to deal with the rather large hole that Ridgeons will leave in their respective turnovers, Huws Gray having decided some years ago to go it alone in terms of their buying.
Years ago, the standard line in the BMJ office was that if Ridgeons sold-out, it was a sign that it was time to get out of the market, that if even a long standing, family-run, well-run, frankly quite lovely, company like Ridgeons couldn’t find its way to stick with it, then the market would have changed beyond all recognition. But then the same thing was said about Jacksons; Jacksons sold out and the world kept turning.
Yes, the market has changed irrevocably and it will continue to do so. But just because one solid family-run company has changed hands, doesn’t mean there aren’t plenty more out there who are continuing to thrive because they understand their markets, their customers, their suppliers and their product offering and who have their eyes on the long term. I saw one the other day that blew me away with how switched on it was – I won’t name names for fear of making the shy, bashful md blush – but it really is a cracking business.
There are some really great merchant companies out there, some of whom will stay with their current ownership for years, some of whom won’t. But that’s what makes it fun as an observer.
Right, who’s next? I’m taking bets…