John Pattison, Sterling ceo, doesn’t really want to linger on the past, but given the changes he has initiated in the last 11 months and with more in the pipeline, he has little choice.
Suffice to say the chain had a tough time and wasn’t functioning as it should if it was to do anything other than limp on for an indeterminable period and find its position under increasing threat from rivals (see box).
After three rounds of interviews – founder George Knowles; buying director, the late Lesley Graham; then the third generation of the Knowles family: George Smith Knowles, Murray Graham and Euan Graham – Pattison became ceo last September and rolled his sleeves up.
HOW IT WAS…
Sales in 18 months to 31 August 2023: £83.68m
Sales in the year to 28 February 2022: £55.47m
Pre-tax profit in 18 months to 31 August 2023: £43,870
Pre-tax profit in year to 28 February 2022: £4.15m
Like-for-like sales in the past year: +1.1%
He admits that even then there was still some mystery as to what he’d find when the bonnet was lifted and engine parts could be fully scrutinised, but he had full support from the now formally involved younger members of the family. ‘As much due diligence as you do externally, you can never do enough. Part of the attraction was the younger generation saying: “We can’t fix this, we need someone in to do it.” It was their decision.’ They also decided being involved was the thing to do, rather than hope it worked and wait for the dividend cheques.
A part of Sterling2.0 was bringing its staff on board. While Pattinson saw the need for changes, only the bath water would be thrown out: of 22 management roles created (some are just being filled) 10 were taken by existing staff moving or being promoted. These included the regional manager flooring being promoted to head of furniture sales; head of customer services moving to head of central operations, who in turn became head of stock management; the head of customer support was previously order processing manager, and the flooring buyer added beds to their responsibilities. Promotion saw the merchandising manager become head of merchandising and the head of fabric and domestic buying move from general manager.
A top-down approach has been replaced with one where staff have a voice (although this is no communist collective); contracts have been harmonised; benefits improved – for the first time in a quarter of a century for many; a new set of company values developed with employees, and social and charity events are encouraged.
If being part of the Sterling family used to mean being related to its founder, that ethos has gone.
Pattison has also put together an experienced executive team: Kenny Barclay is cfo; Donna Macphee people director; Silvia Hernandez commercial director; Matt Bonar IT director; Euan Graham digital and marketing director; George S Knowles environment and sustainability director and Murray Graham management reporting director.
The market has been broken down into six segments, combinations of which will form the group’s focus in the next few years. There will also be more immediate changes to what is seen on the floor (one trend is over-represented and this is likely to be Hernandez’s first task), but otherwise the impression is very much that, as ceo, Pattison intends to lead and leave the why’s and wherefore’s to those who were hired for such expertise – don’t expect to see him negotiating at shows.
Months of deliberation about where Sterling goes from here have led to an outcome that would barely have rated a mention a year ago: have two brands.
As well as the Sterling Home chain, it is turning to Forrest Furnishing, the store it bought in 2016, to reach new customers and areas. With a history dating back to 1944, Forrest is a familiar brand in Glasgow and the city’s surroundings: now the plan is to make it as well known across the country.
While Sterling Home will cover the Unique & Distinctive; Modern & Visionary; Glitz & Glamour; Comfy & Cozy categories, with a nod to Solid & Dependable, Forrest will focus on Comfy & Cozy, Solid & Dependable and Sensible & Savvy, with some Modern & Visionary and Glitz & Glamour added.
With a 10,000sqft footprint including mezzanine, Forrest will focus on smaller towns such as Perth and Dumbarton, and conurbation areas such as central Aberdeen, with more of a focus on value.
In total, 10-15 branches are planned, doubling the size of the overall business.
A large part of the new £10m banking facilities will be invested in the concept. This doesn’t mean Sterling Home has been forgotten. Having refurbished the Aberdeen and Tillicoultry stores, there are plans to relocated the Dundee store and rebrand Buicks in Montrose in the next 18 months. The major investment is a branch near Junction 26 of the M8, one of Scotland’s busiest stretches of road and close to Glasgow Airport. This is scheduled to open in December with 50,000sqft of selling space and the chain’s second garden centre. It will employ the equivalent of 46 full-time staff and have a 3,000sqft flooring department.
Flooring will also feature in the chain’s return to coordinated TV advertising this month and next – the aim is to restore spend to 5% of sales – with 135 10-second slots on Good Morning Britain on STV promoting the summer sale.
‘Flooring is an example of areas we have improved but not really told anyone about,’ says Pattison.
Not having things to tell people about isn’t going to be a problem from now on.
