I'm regularly approached by wannabe entrepreneurs who are interested in operating a retail business but who are extremely nervous given what is now almost the accepted wisdom that retailers in the UK are in terminal decline. The constant stream of UK retail institutions that have collapsed in recent years seems to only strengthen the perception that entrepreneurs should avoid the retail sector at all costs. To address this pessimism, my response is always the same. I tell wannabe retail entrepreneurs that contrary to what the "doom and gloom merchants" would have you believe, for every news story of the collapse of a UK retailer or of the demise of the high street that they see in the media, there are just as many untold success stories of retailers that are growing successful businesses despite the challenging trading environment. They always ask me to furnish them with some examples and that is what gave rise to the "Lesson from Local Business Legends" series of articles. At Continuous Business Planning, we want to celebrate entrepreneurial success stories. We want to show that there are plenty of entrepreneurs right here in the North West of England, where we and the majority of our clients are based, that have achieved remarkable success. Today, we will profile a successful retail entrepreneur; Burnley's Jason Bannister.
As is the case with many successful UK entrepreneurs, Jason Bannister is relatively unknown to the general public. However, many of you will be familiar with his furniture retail brand, Oak Furniture Land. In the year ending 30 September 2012, JB Global, Jason Bannister's company that owns the Oak Furniture Land brand, turned over £85 million, which was an increase of 140 per cent on the £34 million reported the previous year. Pre-tax profit was up from £3.9 million to £9.2 million. This year, turnover is on track to increase by a comparable amount to £180 million, according to The Times who recently profiled Jason Bannister, The plan now is to open a shop a month for the next three years, and to take premises on all the UK’s most successful retail parks.
These kind of figures speak for themselves: Jason Bannister is clearly doing something right. The question at the forefront of any right minded wannabe entrepreneur's mind is "how did he do it"?. We want you to hear his story in his own words, so we've took his words from a collection of different interviews that Jason has done in recent years, providing links back to the original articles for those who want to dig deeper into this inspiring success story. I hope that you come away from this article blown away by his story and business insights. If you hadn’t heard of him before, after this glimpse into his mind, I'm confident that you’ll remember him now.
Jason Bannister had worked as a furniture salesman in his hometown of Burnley for many years previous to his first foray into the business for himself, so he was knew the industry well and had a great understanding of customer requirements. He rose through the ranks as a furniture salesman to become a regional manager, and was eventually taken on by a consumer credit company who were impressed by the amount of furniture he sold on finance deals.
One day, feeling disillusioned about working for someone else, he saw an ad for Mexican pine furniture available from a wholesaler. He had recently remortgaged his house to build an extension. Instead, he bought a container of furniture for £10,000. Jason picks the story up now in his own words:
“I didn’t have a clue what I was going to do with it, I just knew it was great value. When it arrived three months later, my job was going much better so I stored it in a chicken shed until I worked out what I was going to do.” (Source: The Telegraph)
It sat in his shed for a few months longer until he came across eBay when he was buying a new car. It stuck him that this could be the ideal sales and distribution channel for the furniture currently sat in his shed. As he says:
“I had never heard of eBay and I was not internet savvy, but I thought if I took some good photographs and got the marketing blurb right I’d be able to get rid of it. Putting all the furniture on at 99p, it went "through the roof". (Source: The Telegraph)
“It sold fantastically well; it was an unhappy accident. I sold it at a very good price and people were very happy with the quality.” (Source: Entrepreneurial News)
That was in 2004, and he looked around for another deal like the Mexican pine, but finding nothing, he went to India in search of factories which would make the furniture he had in mind. By the end of 2005. Jason had built his E-Bay business, JB Global, to the point where he felt he could safely leave his full time job and focus solely on his growing business. Until that point, he had come home from a ten hour work day to work up to another ten hours on his business. However, once he felt he had a secure income coming from JB Global, he made the jump. By the end of 2006, JB Global was turning over £2.7 million annually on E-Bay and had become E-Bay's leading retailer by turnover.
By the end of 2006, E-Bay were moving their business model away from online auctions and moving towards being a simple online retail platform. Given the scale of his operation, it seemed more cost effective to set up his own online retail website. His stand alone website, www.oakfurnitureland.co.uk, was launched on Boxing Day 2006. Jason himself says of this move:
“it (the standalone website) did the same turnover as the eBay business. We doubled overnight”. (Source: The Telegraph)
As the website continued to flourish and the number of people buying furniture on E-Bay gradually reduced, the business eventually moved away from E-Bay completely and focused on it's own standalone retail website which continued to grow in popularity each year.
The decision to open the company’s first outlet was as a result of customer demand, as almost from the day the standalone website launched, Jason was constantly asked if there was an Oak Furniture Land shop. he carefull weighed up this option before taking the plunge as his initial thought was that opening a "bricks and mortar" store would take business away from his internet operation. However. after enough people got in touch, Mr Bannister and his colleagues decided to take some space on an airfield, which had units going spare.
“It wasn’t even a real shop but after a few weeks it was turning over the equivalent of £5m a year. At first we thought it would be £5m taken from the website, but the online business was still going up so we opened a proper shop in Cheltenham." (Source: The Telegraph)
The store in Cheltenham opened it's doors in 2009 and the "bricks and mortar" side of the business has expanded dramatically since then. Today there are 42 retail showrooms scattered across the UK with many more in the pipeline. Jason describes the impact of the "bricks and mortar" retail side of the business as follows:
“It was fresh turnover, it was incremental business so if we opened a shop that did £3 million, yet were making £30 million via the net then we were all of a sudden doing £33 million. Every time we opened another shop the turnover went up. People who will not buy on the net are coming into our shops. So they are researching on the net and doing all the legwork and then going into shops to confirm the furniture is as good as we say it is and then they buy it.” (Source: Entrepreneurial News)
As the BBC recently reported, Oak Furniture Land now make two-thirds of their sales via the "bricks and mortar" sales channel, with online and offline sales growing in tandem as the number of physical outlets increase.
“We do everything in-house. The overseas manufacturers we use are an independent company but they pretty much just work for us. I’ll give them a design and we bash out a price together. They then make the furniture and it’s imported into the UK where we market it, retail it and deliver it."
“This means we keep all our overheads as low as they can possibly go as a business and it means that we have a fantastic product that customers can buy for half the price of things that aren’t as good as other retailers - and that is simply because the other retailers have got lots and lots of overheads and people in the middle of the run that they have to pay for doing various things.
“It’s like that old saying: gold for the price of silver. I’m not saying what I sell is gold for the price of silver but because we make a reasonable margin and sell it at a level that doesn’t include lots of mark-ups then it’s not far off.” (Source: Entrepreneurial News)
"Keep things simple and do not overstretch your portfolio as it clouds your offering. Learn quickly to sort the wheat from the chaff – it’s very easy to get sidetracked on to different projects. If you get a good idea stick with it and see if it has legs – do not try to do three things at once. Be simple, clear and concise with the customers. If you have a lead time on a product, tell them what it is. If you have a certain price, make it a clear price" (Source: Retail News)
So, to all those naysayers who would have you believe that it is impossible to launch a successful UK retail brand, please consider the example of Jason Bannister, a down to earth Northern man who puts his trousers on one leg at a time like you and me, but who has achieved remarkable success and who seems to be on the precipice of even greater things as he and his brand seek to take premises on all the UK’s most successful retail parks. We echo Marianne Williamson's words to all those who nurture big dreams and say:
“Your playing small doesn't serve the world. There's nothing enlightened about shrinking so that other people won't feel insecure around you. We are all meant to shine, as children do.”
We wish you well on your entrepreneurial adventures. If you feel you need someone to talk to on the journey, do not hesitate to contact Continuous Business Planning today.