Andrew Drinkwater is passionate about the retail business and is in Bologna, Italy when we speak, researching trends in the international tile market. Appointed as managing director of Amber Tiles earlier this year, he has been with the retail tile franchise for 16 years, including a decade spent as a franchisee, and a couple of years in head office with responsibility for retail and product.
I’m very passionate about the business and seeing it grow. WeÍve really worked hard on product over the last two years. In retail, if you have total dedication to retail product and price, it makes sales a whole lot easier.
Drinkwater has already made several trips to China, India and Turkey, the key sources for Amber Tiles. While the move to value in the market has been matched by great prices from suppliers, the offer needs to be more than just cost-conscious, he says.
It’s critical to have exclusive product, for the franchisee and the customer. We’ve really driven hard into natural stone, this has been really successful. We have a beautiful product and the prices are down substantially.
The business has also changed its marketing strategy, so it is reflective of price issues says Drinkwater.
Now the product range is right, it’s time to expand the store presence, he believes. After a drought of six years without additional stores, the chain has just opened its first new outlet (company owned) in Sydney’s northern beaches suburb, Mona Vale.
So what happened to the business to let its growth stagnate? A change of ownership and the internal searching for direction accounts for the lack of recent store growth, Drinkwater says.
When one of the owners of a management buy-out wanted to go one way, and one the other, then we started to focus on internal issues, not the customer. One partner subsequently left the business and then a private equity firm Greenstone Partners bought a majority share. Three years on and the firm is bedded down, ready to make the most of opportunities, he says.
New locations
The expansion will not be a mad rush forward. New stores will be evaluated and next year there are plans for another couple of outlets. We’ll be focusing on maximising the presence we already have, says Drinkwater. The franchise network stretches from the ACT through to Queensland but retains its strength in the home city of Sydney.
When it comes to finding the right location, good exposure is critical. We need quite interesting sites because we need storage, and like to have an outside area to lay down pavers. We’re not that transportable, he says.
But the Mona Vale site may well point to a different set up if successful; it has a more limited outdoor area. The initial signs are very positive, and that will open many more opportunities, says Drinkwater.
When the right location comes up, securing the site is paramount. It’s important for there to be a company-owned store in the mix, he says, but most outlets will be converted to franchises.
A second new outlet is set for an early October opening. This is intended to be a franchise but with no franchisees yet lined up it will be company run to begin with. It’s really crucial to have the right person as a franchisee and we’re prepared to invest in the store in the meantime, he explains. We try to bring people up through the system _ it’s worked very well for me. I like to give young people an opportunity and would like to see more and more of it. If franchisees are ready to go, we will definitely franchise the stores, reveals Drinkwater.
Franchising is a fantastic model, and we have no plans to change this.