Fires and floods have wreaked havoc on some aftermarket businesses, but how have they fared since their ordeals?
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”.
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.
J S AUTOS
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.