Whatever your feelings about the newest big player on the cabinet scene, there’s no denying that the rise of Oak Furniture Land has been impressively meteoric. Owner Jason Bannister has time and again proved his ability to respond to changing market demands, going from eBay to internet and – increasingly, retail park – domination in the space of just eight years. Last July, Paul Farley discovered how a combination of market savvy and opportunity has helped create one of the most successful retail businesses of modern times …
The story of Oak Furniture Land brings to the fore pretty much every major issue impacting the furniture market in the last decade – retail parks versus the high street, internet versus bricks-and-mortar retail, the integrity of marketing, the rise of vertically-integrated business, the costs and IP issues associated with sourcing Far Eastern product, outsourcing versus in-house services, and ensuring consumer spend.
Yet Jason Bannister’s brand has emerged thus far a victor in today’s unenviable retail climate, and the man himself has demonstrated that success can be achieved no matter the level of adversity.
And what a success it is – according to Retail Week magazine, Oak Furniture Land reported a 92% sales increase to £33.7m in the six months to 31st March this year, and its pre-tax profits were £4.8m, with projections of £80m in sales and £10-12m in profits for the full year.
“In those initial periods there was a real concern that our stores were going to cannibalise our online business. However, by the fifth store we started clearly seeing that the website was actually benefiting from the shops!”
The company itself reported a sales growth of 40% in the last financial year, and opened 16 retail outlets in the last 18 months. Since the launch of oakfurnitureland.co.uk in 2007, Jason’s company has gone from fulfilling 25,000 orders a year to a massive 150,000 in 2011. Due to its massive growth, the distribution centre has moved to a 200,000ft2 premises in Swindon.
For the last two years, the Fast Track 100, in association with The Sunday Times, has recognised it as one of the UK’s fastest-growing private companies. Jason’s low-cost model is clearly paying off.
The latest addition to the Oak Furniture Land store portfolio opened in Watford last month, and Jason is far from conservative when outlining the long-term plan. “We are looking at cornering the market,” he says, “by opening more than 40 stores by the end of 2014 – something like a store a month, until we start cannibalising our own business.”
Although much of the company’s success can be attributed to Jason’s fortuitous decision-making, it is thanks to his early experiences in retail that Oak Furniture Land came about at all. His formative store experiences culminated in an area management role at Walmsley’s – “a very harsh and tough upbringing, in which we had to fight for every scrap of business!”
From here, Jason moved into the world of retail finance, where he travelled the UK extensively, visiting independent retailers and learning more about their approaches and the public’s furniture tastes.
It was one of these visits in 2004 that sparked Jason’s imagination and led him to set up his own company. “In a retailer in South Wales, I saw a furnishing magazine advertising pine imported from the Far East,” he says. “I had around £10,000 to hand, so I ordered a container of Mexican-style pine furniture.”
Jason soon found that wholesale was not as easy as it looked. The furniture, stored in chicken sheds, gathered dust while Jason sought buyers. He was coming to firmly regret the purchase until, when searching for a new car, he stumbled upon a certain online market website – eBay.
While Jason admits he just “wanted rid by then”, he approached the online sale of the furniture professionally, utilising quality photographs and clear descriptions, and utilising national couriers for its delivery. He was more surprised than anyone by the result.
“Within four hours of my products going live, I’d missed 80 calls,” he says. “There were companies like Halo about, selling bedside cabinets for £300 – I could buy one for £10 and sell it for £100, meaning happy customers and good business!”
Jason soon decided to go straight to the source, and, despite the risks, flew to India and China in search of product. “We were very, very lucky that the suppliers we found were some of the good ones,” he says. “The products were made for much cheaper than in the UK – I found those not exhibiting at the various trade shows didn’t know the foreign value, just the margin they wanted, hence we were able to achieve much keener prices.”
After sitting down and designing around 30 pieces of furniture with a particularly ambitious manufacturer, Jason was astounded by the “out of this world” low prices on offer. Within six months, these designs had arrived in stock, and business boomed. “Bidding started at just 99p, so each piece was guaranteed to sell. The amount some people were buying items for was infinitely more than we would’ve sold it for otherwise in a shop!”
In just two years, Jason had become eBay UK’s largest retailer by turnover, and while internet retail presented its own unique pitfalls, he found much of the philosophy to be similar to that of selling from a store.
“My business had to be very transparent, right from the start. The internet’s actually a very harsh environment – I didn’t want to be over-promising and under-delivering, but set out to achieve the opposite. I would set out the delivery terms very clearly, as I didn’t want to handle complaints!”
In 2007 Jason decided to establish his own standalone site, oakfurnitureland.co.uk, which grew at a prodigious rate. The principal reason was the product on offer – early on, Jason demonstrated a strong grasp of mainstream tastes, and delivered accordingly.
He says: “I know my customer well. To this day, this is an innate strength of this business. If I go somewhere and like something, I’ll generally follow it up – and luckily my customers like what I like! One example is my decision to ensure solid wood is used throughout, solid bases, solid backs, dovetail joints, etc – it’s actually not that expensive to upgrade such specifications. At the time, many retailers were driving the price and quality of furniture down, and I felt there wasn’t a lot of choice for reasonably-priced decent furniture at the middle level.”
The biggest step-change in the company came in 2009, when, due to repeated demands from potential customers “not comfortable enough to part with money over the net”, a showroom was opened at Oak Furniture Land’s head office – then on an airfield in Gloucestershire.
“We didn’t really have the intention to open stores – people were just following up from the website. From day one, we never hid behind the site – we had a phone number, and people manning the lines from eight ‘til late. We were repeatedly asked if we had a showroom – and, typical of most internet companies, we didn’t.
“After opening the airfield showroom, people travelled from all over the UK to visit, and we probably made about £3m turnover from the showroom alone – about the same as a whole store on a top retail park!”
Following this, it was a simple decision to establish the first true Oak Furniture Land store – in June 2010 in nearby Cheltenham, close to a retail park. “I just didn’t see the future of furniture retail on the high street,” says Jason, “but potentially there was a chance for us on or near retail parks, and, as well as its proximity to our headquarters, Cheltenham fitted our mid-level demographic well. We were looking at a run rate of £4m from a 10,000ft2 shop, and were also in the lucky position that if the shop didn’t trade well it wouldn’t really matter to the business.”
“We want to be the first destination on retail parks, alongside all the big names, and we want stores within a maximum of 45 minutes’ drive time of everyone in the UK”
At that time, Oak Furniture Land benefited from the numerous evacuations from the retail landscape. The demise of the likes of Allied Carpets and Land of Leather meant there were vacancies on the parks – despite the fact that Jason, who headed up the store project personally, found that “although most stores were pretty easy for us to just walk into, landlords with empty shops were not exactly biting our hands off to get us in, as we were a new, unproven retailer”.
The following opening, on a retail park in Chester between CSL and DFS, and near to Harveys and John Lewis, was the company’s first “expensive” store. Further showroom roll-out then took place from the back end of 2010.
“In those initial periods there was a real concern that our stores were going to cannibalise our online business,” says Jason. “However, by the fifth store we started clearly seeing that the website was actually benefiting from the shops! Whatever the weather, we made sales.
“We thought that if the stores were strengthening the web, we should just get them out there as quickly as we could! Today, despite – or thanks to – the stores, our web business is actually 20% stronger than it was last year.
“There’s never really been a cabinet furniture specialist on the retail parks. If you want a sofa, probably the first destination you’d look at is DFS – then you’ve got general furnishers like Furniture Village and Harveys, and finally the local independents. In most towns you’ll find a higgledy-piggledy pine shop where you’re banging your legs on everything you walk past, but – excuse the pun – in these stores you can’t see the wood for the trees!
“We made sure that we replicated the website branding in each of our stores – tongue firmly in cheek, we say our stores are just walk-in TV screens. We keep the brand consistent across the entire portfolio, and do our darndest in the store to display every product that we have on the website – or clearly state if the case is otherwise. That means that our salespeople can just concentrate on selling the furniture.”
Delivery issues can be a real headache for salespeople. Oak Furniture Land utilises an in-house team because it offers the service and price Jason demands: “If we can bring it in-house, we will do.” As a model of vertical integration, removing middlemen to take the product straight from the source to the customer, Oak Furniture Land is reflective of today’s business trend towards independence and economies of scale. Jason states that, rather than being inspired by big international retailers, the company simply evolved in this manner.
The only exception to this rule is manufacture – while Oak Furniture Land designs its own products (“I know there are a reasonable number of independents that are probably selling our designs right now, but not on the internet, so we don’t see them”), Jason has no desire to own factories. The company simply demands that its business comprises the majority of its partner factories’ output, and it has its own QC staff on hand where necessary.
This side of the business is overseen by head of overseas operations Mike Richardson, who is personally based in Burnley but spends around six months each year in China, India and Indonesia.
While Jason is the company’s lynchpin, “generally the ideas man, responsible for marketing, concepts, furniture design, etc”, he has put a strong management team in place over the last year, comprising: commercial director Terry King, who handles the operations of the business; the ex-Bensons Paul Burgham, who acts as head of retail; and finance director Ian Roberts, a former employee of Warren Evans.
“I’ve trodden all these paths very long and hard over the past seven years,” says Jason. “I just have to make sure I bring people in that are better than I am at doing specific things!”
Jason’s entrepreneurial vision has been well documented in recent years, and it seems there is little chance of its scope abating. “We want to be the first destination on retail parks, alongside all the big names,” he says, “and we want stores within a maximum of 45 minutes’ drive time of everyone in the UK.”
In short, the boy from Burnley has changed the face of national furniture retail. The 21st century has presented retailers with numerous challenges, many of which are completely new and unique, and Jason Bannister has proved that, with the right approach, any business hurdle can be overcome – and, in some cases, capitalised upon.
Story originally published in Furniture News, July 2012
