Corporate and Business Services Partner, Ian Smith, caught up with Charles Annable of Brockway Carpets on COVID-19 and how they have dealt with lockdown as a business.
Brockway Carpets is a family business which has been privately owned by the Annable family since the 1960’s. They are a well-established manufacturer of flooring within the UK with a strong reputation for high quality carpets, supplying to the likes of John Lewis & Partners.
Charles emphasises how as a company their impact on the environment and being sustainable are hugely important to them, and this, along with being a design-led business, has set them apart from the competition.
A few years back Brockway Carpets acquired The Grosvenor Wilton Company, which is a traditional flooring company dating back to the 1700’s and with a rich heritage in flooring. Now the two companies work side by side.
What plans did you have in place pre COIVD-19 and what were the challenges you faced during lockdown?
Lockdown happened very quickly for us and left little time for planning.
We work on fairly long lead times and were tied into commitments by the time we thought something dramatic might happen to the market. Additionally, we were just about to launch three new product lines, and so had invested heavily in stock, which only added to an already challenging period.
With John Lewis & Partners, an important customer, being the large organisation that they are, they had an insight into what might happen, which resulted in them closing their carpet warehouse a week before lockdown. This gave us additional time to put the business into “hibernation”.
Did you furlough any staff?
With our independent retailers closed from 23 March, sales orders ceased overnight. So there was no need to keep manufacturing running, and so the factory was closed.
We considered what was the bare minimum number of people we needed to keep the business ticking over, and so we furloughed the majority of staff, with the exception of a couple of members of the sales team to answer enquiries.
Also, a few members of the finance team were kept on in order to deal with payments coming in and to pay suppliers.
Myself being the only member of senior management not furloughed, I initially focussed my time on keeping the lines of communication open between customers, suppliers and of course the bank.
Problems in supply chain and bottle necks:
So far so good. Although there are some suppliers and customers that I worry about whether they will survive this.
What this situation has done is strengthen relationships with key suppliers and customers, and this will help our business in the long term as we come out the other side of COVID-19.
How did you find obtaining finance, the bank and the CIBILS process?
We found the process with the bank frustrating, although the CIBILS loan was something we wanted to take advantage of, mainly due to the large investment we had made in stock. We thought this was an important intervention by the government.
We faced challenges from the bank when applying for the CIBILS loan and didn’t feel the bank were following in the spirit of how the loans were intended, such as, initially they wanted personal guarantees as well as charges over the properties and assets of the business.
You’ve previously mentioned that once the security from the bank had been obtained and the business had effectively been put into ‘moth balls’, this allowed for some blue sky thinking.
Once the initial processes had been carried out, I was able to sit back from the normal day-to-day running of the business and, with the luxury of time, able to think about its long term future.
Not knowing what the future looked like focussed the mind on the key values of the business.
One area of focus during this time was to develop a new product line in rugs.
The business had broadly only been dedicated to fitted carpets, but we now believe there is scope in the business to be able to develop a portfolio of rugs. These are easily produced from what we already do, and cut out the need for a fitter, which can be off-putting for customers.
During this time we have not only been able to understand how the manufacturing of rugs might be carried out, but also to put together a marketing plan.
Due to the new environment in which we find ourselves, we have thought hard about the challenges facing the high street as well as the new development in rugs and carpets selling online.
What was your reaction to the announcement that John Lewis & Partners is closing some of their stores? As they have a large online presence, have you thought about how their dealing with the current situation might provide you with ideas on how to adapt in the future?
They are working on how these big-ticket items, such as carpets, can successfully be sold online, and there is a lot of activity going on behind the scenes there.
It is interesting and it will change the whole way the product is sold and presented. I envisage a much more focussed product portfolio going forward. The reason being people browse online in a very different way to how they do in the shops.
Part of the way we have developed products in the past has been focussed on how it will present in the shops, so this will have some really interesting consequences. The people who are agile enough to do something about this will be the ones who succeed.
We are thinking very hard at the moment about how we will adapt going forwards.
Talk us through the factory and the warehouse opening back up?
The first thing we did was to carry out a COVID-19 secure risk assessment to ensure we could safely reopen.
We have implemented new procedures, such as staggered start times and using floor tape to ensure people are socially distancing.
Fortunately, it is not a working environment where people need to work next to each other.
Presumably, a lot of the changes you have been making in the last 12-18 months such as redesigning the factory and making the processes more up to date, has helped as well?
Yes, absolutely we have done a lot of work in reorganising the factory and making the workflow more logical, and handling materials more efficiently which has coincidently been a great help in procedures post lockdown, and making the business COVID-19 safe.
What proportion of staff are back in now and are you back manufacturing carpets again?
By the middle of May we found that we were starting to get orders coming through and so at this point
we brought back a skeleton workforce in the factory just to focus on despatching carpets. We also had the admin staff we needed set up to be able to work from home and keep the business ticking over and take orders coming in.
Since then the orders have ramped up and we have slowly been introducing more and more staff back off furlough and into work. Both from home and into the factory.
About 3-4 weeks ago we started to manufacture carpets again and are currently operating at a reduced capacity, which we think will continue for a while.
June and July have been pretty busy which we think is pent-up demand. In addition, people are at home, so they are spending more on refurbishing their houses rather than spending the money on a holiday this year.
The furlough scheme has been useful as we are able to bring back people slowly and gradually as required.
With October and November historically being the busiest period, we are hoping it will continue to be the case this year, and this will give us a good idea about what the ongoing level of business is going to be.
How are the new carpets lines getting promoted?
With our business being fairly traditional with sales reps visiting shops to promote new carpet lines, retailers have not wanted additional people in the shop, so we have been unable to operate in the usual way. But this is where our online platform will become increasingly important going forward, changing the way our products are sold.
We will be adding more interviews over the coming weeks.
Check out our Business after COVID-19: Transition Knowledge Hub for more guidance and advice on managing the pandemic.