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Fires and floods have wreaked havoc on some aftermarket businesses, but how have they fared since their ordeals?

Water recedes showing ruined stock

Disasters in the aftermarket are not uncommon. In fact, it can have a double- edged sword effect on business. Either, roll down the shutters for good or rebuild the company from scratch, coupled with numerous calls to insurance firms and the like to get back on track. Here are the tales of three of them:

Accessories and leisure brand Streetwize, knows this experience all too well where a flood caused by a burst riverbank left the team with no choice but to relocate into temporary office space a stones throw from its Radcliffe site that had been submerged underwater. The results were catastrophic for Streetwize Director Murray Silverman with the accident causing £500,000 worth of damage to stock (excluding plant and office furniture) while wrecking tonnes of paper work and computer systems in the process.

After notifying the insurance authorities, Silverman and his team had the troublesome task of keeping business afloat by informing customers of the situation and organising every stock item rescued from the flood. “It was a lot of pain and a lot grief”, recalls Silverman, “Customers are very sympathetic when it happens but you can’t turn on the tap and get the stock back. The first phone call from customers was, ‘we’re very sorry about the flood, how are you doing?’ The second call is a catch up asking when stock is coming back and by the third it’s, ‘we sympathise with you but we’re going to have to go elsewhere’, which we understood”.

Not wanting a repeat of previous events, Silverman snapped-up a large 100,000 sq ft. warehouse in the Trafford Park Industrial Estate, Manchester, incorporating all of its storage facilities under one roof. However, an efficient new space didn’t come without its complications. “After the flood it was up to the sales guys to win back all the orders that we’d lost”, said Silverman. “There was also the grief of losing staff where many employees couldn’t travel with us because it was a new area further away”; adding that Streetwize incurred many costs subsidising staff for travel and expenses to and from the new site.

Despite over a year of negotiations with insurers, the team managed to replenish all stock within six months of transitioning to their latest premises and as it stands, the business seems to have recovered well housing around 50 staff and growing its sub- brand Leisurewize that now has a strong foothold the European aftermarket. “Since we left our old site, one of the biggest areas has been in the leisure group where we picked up the caravan mover and two years on, we’ve gone from zero to number two in the UK and ranked high as one of the leading brands in Europe”, Silverman added. “We might have had a struggle in the last place but this has contemplated that”.

Similarly, in June last year, aerosol maker LMA, which cans many aftermarket brands, fell victim to a fire that caused hundreds of thousands of pounds worth of damage at its site on the Pocklington Industrial Estate, East Yorkshire. Fortunately, nobody was injured and no production machinery was destroyed, meaning, the factory could resume its normal operations the very next day as it began the tiresome process of recovering its wares from the fire. However, LMA owner Fraser Todd notes that if it wasn’t for their suppliers’ support, the future of the business could have taken a turn for the worst. “Due to the amount of stock we lost, it was a couple of months before we could be back to running all of the thousands of product varieties which we manufacture”. Todd continued. “We received a lot of help from suppliers to get our stock levels back to where we need them. In the end, we appointed our own loss adjusters, so we could manage the recovery while they argued with our insurer. However, had we not been as established as we are, the efforts of our insurance company would have ensured that as a business we collapsed”.

LMA after the warehouse fire

14 months on, Todd says the company is still fighting tooth and nail with insurers over final payments for some capital items such as forklift trucks and racking. Although the dispute is still ongoing, some positives have emerged from the ordeal. For instance, a new 8,000 sq ft purpose built factory has been created on top of the old site, combining its previous two units into one, complemented with a more robust design. Todd elaborated. “Because of changes in building regulations since our previous warehouse was built, plus some specific planning demands, we couldn’t build exactly what we had before. So we’ve built something which is designed to cope and withstand a fire more effectively and allow us to grow and become better at what we do”. He adds that the new layout has improved its logistical operations making stock and picking processes more efficient.

Family- run garage J S Autos is currently undergoing a similar situation to LMA after a fire broke out and engulfed the building in flames. The accident took place down Empress Road, Southampton last April where 79 firefighters were called to tackle a blaze that had apparently been caused by ‘petrol welding’ from a repair business a few doors down, according to owner Jhalman Rai.

Unfortunately out of the three businesses involved, JS Autos took the brunt of it suffering from damaged windows, vehicles and the roof collapsing in on itself. ‘Shocked’ was definitely an understatement for Rai as he retold the story to the local press. “It’s 40 years of business down the drain”, he said. “It’s a family business and it happened so fast. Smoke started coming from it and then all of a sudden it just went up, flames everywhere and we had to get out.”

Nevertheless, this didn’t defeat the garage owner’s spirit and it was business as usual to get the company back off the ground. The workshop owner said his company is currently working from a temporary tyre depot not too far from the original building and is in the stage of ordering a new MOT bay to resume services for local customers. “We’re applying for an MOT station at the moment. At our original site we had two MOT bays but there are none available at our temporary one so we have had no choice but to farm out our MOT services”, Rai expands. “Once the site is cleared, we’re going to see what plans we can get and look into getting a quote. It’ll probably take around a year before planning and developing the new site”, adding that the garage is making the best of a bad situation by trying to keep customers happy and paying its bills as normal.

While the odds were against these aforementioned companies, they are living proof that having a clear structure and support system in place, will see businesses survive and thrive no matter what disaster is thrown at them.

To avoid any firms from going through a similar ordeal, our suppliers shared some expert advice to business owners in case such events should arise.

LMA’s Fraser Todd said, “Following on from our experience, we’d recommend you thoroughly check your insurance policy. Irrespective of what your broker tells you, don’t expect your insurer to help your recovery. Don’t think they’ll be honest and faithful”, he expands. “Most likely the insurance will appoint their loss adjustor who will argue about the cost of everything and the values you have insured to reduce the claim. They will be slow to pay and hold out to make you agree to lower payments”.

Streetwize Director Murray Silverman concurs and advises aftermarket firms to invest in strong and long-term working relationships to see them through those turbulent times. He said. “It’s very important to have the right people around you and it’s really work ethic and getting support from your suppliers. If it’s suppliers you’ve known for years they can help you, compared to ones that are new or don’t know much about your business”. Todd agrees and concluded. “Business works on relationships and provided you have good relationships with your customers and suppliers there’s no reason why you can’t survive what happened to us”.

Although it’s still early days for J S Autos, we are certain the independent will continue going from strength-to- strength as it continues its recovery process, post disaster.

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Keeping afloat after disaster strikes takes the most Streetwize of operators

New, efficient warehouse for Streetwize

Regular readers will have seen Murray Silverman and his team in the magazine many times through the years – first through his activities as the Ace Supply buyer’s agent and more recently through accessory brand Streetwize.

However, in the last days of 2014 the business nearly went under – quite literally as the warehouse and offices suffered a devastating flood.

“It happened on Boxing Day, and when I got back from holiday I saw the flood” recalled Silverman with typical understatement. A video clip on his phone reveals that a river had burst its banks, putting the nearby houses and businesses under four feet of fast-flowing and extremely muddy water. This was going to take a while to sort out.

The first problem was to find somewhere to physically do the sorting out. The area, still under water, had been cordoned off by the fire service so Silverman had to come up with another plan. “We had nowhere to go to, but there were some serviced offices over the road a little way, so I ran over and asked what they had”.

The answer was not much, but the manager of the building found a few rooms scattered between f loors, which at least allowed Murray, son and co-director Dale, Co-Director Dave Davis, Julie Bell from the Purchasing team and a number of other sales employees to phone around customers to explain what had happened – a situation complicated by the fact that they were not able to use the Streetwize telephone system.

“Customers were very sympathetic at first, but after a couple of months it started to wear a bit thin” explained Silverman. One of the problems was that after the water receded Environmental Health looked at the condition of the building and decided that it was something more toxic than mud that caked every surface and large swathes could not be used. The result was that pretty much all of the stock was written off as well as a whole load of computer systems and physical paperwork destroyed.

One of the problems when your business is imports is not loosing the stock – painful as it might be, it is insured – but replacing it will take at least twelve weeks and in the modern age of retail, that just isn’t acceptable. “It was a total battle, plus we had no premises,” recalls Silverman. “But I couldn’t just turn on the tap”.

In the short term, the management had to beg, borrow and call in favours to get space to hold the small amounts of stock they could get their hands on. Not wanting to risk a repeat of the incident, the hunt was on for a new and permanent home – although that was also problematic as staff wouldn’t want to move too far.

The lack of stock was a massive problem though. “We had stock here, there and everywhere, and we were losing orders left right and centre” recalled Silverman. “Some of the national accounts fined us because we couldn’t fulfil the order and some of them cancelled altogether. You can argue with your insurance all you like, but once you’ve lost an order, you’ve lost it and they let someone else in”.

However, in the modern North-West decent logistics space is at a premium. Fortunately, and at the last minute, Silverman found a warehouse in Manchester and the race was on to get it racked out before a large shipment of stock arrived.

To say that the transition was straightforward would be inaccurate, however the current property offers a number of advantages over the old place – and not just because of the reduced flood risk. First of all, wide loading bays and the brand-new racking meant it was easier and quicker to move goods in and out. Secondly, brighter and roomier offices on site meant the sales and buying teams could get on with their work. Finally, the site had a large upstairs room that leant itself well to being set up as a mock accessory shop.

The race was on to refill the stock room and the order book – and this led the company in a new direction. For some time, Streetwize had offered a range of camping and leisure products, but now it was in a position to expand on this. “I had a customer that was into mail order that opened a door for me for a national account, who wanted garden products” explained Silverman. These were easily sourced from the firm’s list of factory contacts, as were a number of caravan products. “We went to the shows and added an electric caravan mover to range” he said. “I knew the maker of old, so I asked him about securing the UK rights and it has been big business for us”.

Dale Silverman, Murray Silverman and Dave Davis

Leisure products, now sold under the sub-brand Leisurewize is now the fastest growing area of the company, though this hasn’t been without challenges. In a market that is dominated with the likes of Amazon and eBay, the firm has struggled with ‘substitute sellers’. Simply put, these sellers will use a picture of a Streetwize branded product, but actually send a generic unbranded item that the sellers have imported themselves. The team at Streetwize joined with other (mostly leisure) accessory distributors to have these sellers taken down – but it has been an uphill battle as the way that the nation buys and sells has changed. “I remember the days of Gordon Spice, Regor, G&M and Maccess – there were loads of cash and carry’s” said Silverman wistfully. “They’ve all gone now… The internet has changed the world” adding that the company has never supplied consumers directly and certainly hasn’t sold directly on Amazon.

Another new direction after the flood was to try exporting Streetwize branded products. “It was difficult, because no-one was waiting for Streetwize to turn up” admits Silverman. However, after going to a few trade shows he found buyers that were willing to listen to his message that while it might be easy to buy directly from China, it is much harder to buy consistently or well. For that you need long-established contacts as Streetwize has. “If they buy from us, they get the opportunity to buy good products with a strong brand” he says, adding that he loves sticking another pin in the map when he picks up a new international client.

A surprisingly strong market has been New Zealand and there is even an accessory shop on the tiny island of St Helena that is decked out with the firm’s wares.

On our visit, the peak season for wholesale buying leisure products was nearing an end, and the warehouse was full of water rollers, tow hitch locks, electric caravan movers and many other products that we weren’t familiar with. Dale Silverman and Dave Davis pop by to say hello, in between both of them sorting out complex deals on their permanently busy phones. The mock shop, which also doubles as a boardroom, is a fantastic size, but even this can’t display every product that the team imports.

Silverman started in the aftermarket by buying a job lot of ‘Grand Prix’ brand steering wheels that used an interchangeable boss to fit most cars on the road at the time. Today, the businesses’ fastest moving lines are various hands free accessories and dashcams, as well as the afore mentioned caravan mover. As Silverman says, the world has changed and so have the things people buy as well as the way in which they buy them, but you can be sure that the team from Manchester will be on the phone, constantly looking for the next big opportunity – whatever the weather throws at them.

Silverman’s thoughts on five great products from the last 30 years:

Fluffy dice

“These are essentially useless, but at one time we couldn’t stock enough of them”

‘Grand Prix’ steering wheels

“We tried to sell them to the likes of Maccess, but they said: ‘No way! You are a thorn in our side!’”

Max Power merchandise

“For a time, anything with Max Power on it would sell – absolutely anything. Funnily enough Fast and the Furious merchandise was a comparative disaster”.

Spitting Image merchandise

“I realised there was a market for this, so we got the licence and straight away sold 50,000 keyrings to Asda”.

Light-up washer jets

“I came back from Taiwan and told everybody about these. Without exception, they thought I was crazy…but I knew there was a market for them!”

Posted in CAT Features, Factor & Supplier News, NewsComments (0)

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