Alistair Houghton meets GUY WEAVER, chief executive of Premium Appliance Brands
GUY WEAVER is a man with a passion for domestic appliances. Weaver co-founded Warring- ton’s Premium Appliance Brands (PAB) in 2002 and has seen it become one of Britain’s fastest-growing companies.
The company calls itself a “virtual manufacturer” – it designs and distributes all its products in the UK but has no factories of its own, instead relying on a global supply chain.
That means it can offer a wide range of white goods from cook-ers to dishwashers under a range of exclusive brands to major retailers including Tesco, Currys and B&Q.
It boasts ranges endorsed by celebrities, including wine expert Oz Clarke and fitness guru Rosemary Conley.
Weaver has spent his career working with domestic applianc-es, becoming a director of Prescot cooker manufacturer Stoves, alongside Peter Brazier, before the two men left to set up PAB.
That industry background has been crucial in making a success of PAB, which has reached the Sunday Times Fast Track league table of the 100 fastest-growing British companies for two years running. Its sales have risen from £2.6m in 2003 to £20.6m in 2006.
Norwich City supporter Weaver is a mine of statistics – 7m kettles are sold every year in the UK, for example – and can tell you how PAB benefits from the different ways people cook in the UK and on the Continent.
He hopes PAB will one day expand into overseas markets, but says its strong growth in recent years is down to its know-ledge of the UK marketplace.
“We are totally focused on the UK, not like some of our competitors who are trying to find pan-European solutions,” he said. “But we don’t cook in the same way as the French, the Italians and the Germans.
“We produce products that are right for this market to be successful.
“We like grilling and we do a lot of baking and oven cooking. The traditional English meal may now be chicken tikka masala, but Sunday roast is still very important.
“Most ovens in Europe are single cavity, containing an oven and a low-powered grill. Most of ours are twin cavity, with a large oven and then a smaller one with a grill. That configuration is still fairly unique to this country – you won’t find many twin-cavity products sold in Germany or Italy.”
Weaver started PAB with colleague Peter Brazier in September, 2002. The company employs 49 people in Warrington in design, sales and administration roles.
“We call ourselves a virtual manufacturer because we do everything manufacturers do except own our own factories,” said Weaver.
“We design products for retail consumers but have them made at various factories around the world so we don’t have all that money tied up in working capital.
“We’re fast at getting products to the market and we can offer better value for money than if all our overheads were tied up in factories.”
PAB still gets its tumble-dryers made in the UK, but its other products are made in countries from Spain to Turkey and China.
That flexible supply chain means, says Weaver, that it is able to respond more quickly to its customers’ needs than if it has its own factories.
“We wanted to challenge the existing alternatives by being quicker and more genuinely responsive to what the client wants,” he said.
“If you’ve got buy-in from the customer, it makes it a lot easier to sell.
“The reason we have so many brands is we try to give each trade partner something that’s unique.
“For Tesco, for example, we do exclusive products in conjunction with Rosemary Conley. We’re trying to give them something they’re not getting from our competitors.”
Weaver’s enthusiasm for domestic appliances follows a career spent in the sector.
He joined British Gas after university, working at the company’s retail showroom arm, and worked for Electrolux and Currys before moving to Prescot to join Stoves.
Weaver spent 13 years at the Prescot-based plc, rising to marketing director as part of a management team that pushed sales up to over £100m.
It was at Stoves that Weaver met Peter Brazier, who became the group’s sales director.
In 2001, Stoves was taken over by Irish group Glen Dimplex in a £12m deal – and Weaver and Brazier decided to go it alone.
They were inspired, Weaver says, by work already done at Stoves to investigate whether new product ranges could be sourced overseas.
“At that time, we’d been looking overseas for some of our production,” he said. “We were making top-end products in the UK and commodity products looking at sources outside the UK, including Turkey and the Far East. The seeds were already being sown.
“UK manufacturing is excellent for added-value products but in the mass market, with the cost of labour in other markets, you cannot compete.
“People aren’t willing to pay a premium for British-made products. You can argue whether that’s good or bad, but manufacturing is moving overseas.”
Weaver says the current economic climate will make life harder for companies in his market as consumer confidence slows.
But perhaps more important in the short term are the inflationary pressures on PAB. Weaver says that, as the Chinese currency rises in value, costs of Chinese goods and services are rising. On top of that, raw material and transport costs are also up “dramatically”.
The problem for PAB and its competitors is that the price of most domestic appliances has been falling for many years and consumers are unlikely to accept price rises now. That cuts into manufacturers’ margins as they will find it harder to pass on cost rises to consumers.
Weaver said: “It’s difficult to manage expectations from both sides – people expecting things to get cheaper while suppliers expect prices to rise dramatically.”
But despite the economic gloom, Weaver says he sees opportunities for PAB as customers tighten their belts.
He said: “Our overheads are exceptionally low. We offer a value advantage over the leviathans among our global competitors.
“We’ll still grow in a difficult marketplace. We see this as potentially a £100m business.”
Weaver says PAB will also consider making acquisitions to grow the business, and says the company is well-supported by its bankers.
He and Brazier own shares in a racehorse – and they’re betting their business can keep growing despite the current economic slowdown.
“We sell anything you can plug in and which goes in your kitchen,” he said.
“There are 26m households in the UK and they all have a kitchen.
“Even in these difficult times, people tend to invest in home improvements. We always have a marketplace there. And there’s a strong replacement marketplace – people can’t live without a washing machine or a kettle if it breaks down.
“Even if this year our market is down 10%, there’ll still be growth opportunities.”
alistairhoughton
