Executive Hire News › Archives › January/February 2009 › Executive Report : Phoenix rises
Executive Report : Phoenix rises
Five years after he sold his original business, Gary Derraven is developing another hire operation in Cwmbran, south Wales. Robert Aplin reports.
Having joined a local Cwmbran-based tool hirer as a YTS trainee when he left school in 1978, Gary Derraven spent the next 10 years learning his trade in hire. In 1988, he joined Kingfisher, a fledgling construction equipment sales company, and opened its first tool hire outlet in early 1989. By the time I interviewed Gary for an article published in March 2002, he had built Kingfisher Hire & Sales Ltd into a significant hire operation in south Wales with six outlets from Newport to Bridgend.
In June 2003, however, Gary sold Kingfisher to Speedy because “they made me an offer I couldn’t refuse” and spent the next three years with the national hirer. “I worked with a good team of people, was impressed by their enthusiasm and professionalism and left amicably in June 2006, with no intention of getting back into hire, preferring to set up an asset finance business. “After 18 months, however, I was bored as there was no ‘buzz’ and at Christmas 2007, I decided to get back into tool hire. Retaining the bird theme, I settled on the name of Phoenix, the mythical firebird that rises from the ashes, as an appropriate metaphor for the new venture and, in January last year, started looking for premises in my home town
of Cwmbran, which was the centre of my previous hire experience.”
Ready-made tool hire outlet
“I drove around the town looking for a suitable location on an industrial estate and found a ready-made 3,500ft2 unit, with a 1,000ft2 mezzanine level, that fits our purpose perfectly. We moved in on 15 March and opened for business on 7 April. I approached Jason Gray to become Manager and he was happy to renew our relationship, having worked for Kingfisher for six years. Mark Sanders, who is Workshop Manager, had worked for Kingfisher for five years, and was also prepared to join the new venture. Their experience is the best around in south Wales. Our third full-time member of the team is my son, Jason, and we plan to add a driver during February.” Gary invested £25,000 on its opening stock, which rose to £110,000 by the end of 2008. He envisages that this will double during this year. One of Phoenix’s key ranges is Youngman towers. “Whilst we struggled to open accounts with some previous suppliers, we were delighted at the response of others, including Youngman, which gave us a reasonable credit limit, consignment stock and prompt deliveries. More importantly, customers love Boss towers. We have standardised on narrow and standard width towers, which have interchangeable parts, and these satisfy all our needs. “Bosch was another supplier that was happy to deal with us again. Other key ranges are Belle mixers and compaction equipment, with Norton our preferred supplier of floor and bench saws. At Kingfisher we specialised in diamond blade sales and, having met Premier Diamond Products at last year’s Executive Hire Show, we were impressed with their friendliness and willingness to do business with us. As a result, we have appointed PDP as sole supplier.”
Developing new opportunities
In response to the changing times in hire, with, for example, low-cost tools being purchased by many builders and DIY enthusiasts, Phoenix has developed new opportunities in the form of equipment sales and customer repair. “Power tool sales had always been part of the Kingfisher offering and, at Phoenix, we have now added the very acceptable Portwest range of hi-visibilty clothing and safety boots to support our power tool sales activity. In the past, we had wanted to undertake customer repairs, and we are now developing this niche market. Not many other hirers offer repairs and power tool dealers normally have to send tools away, resulting in a slow service for customers. We provide clients with a quote for repairs within 48 hours and, subject to the availability of spares, we complete the job within 48 hours. We can also undertake this work on-site, as well as in our own workshops. Our approach to customers is to let us become your ‘plant manager’. Rather than deal with a dozen different contacts in three national hirers, you can channel all your business to one point.”
Repairs now account for 20% of Phoenix’s turnover, with hire and sales each representing 40%. Nine months into Phoenix, Gary is “extremely confident about the prospects for 2009. We went into profit last July, compared against our predicted month of this February. We are opening new accounts at the rate of five per week and plan to open a second outlet in the Cardiff area, hopefully by April, once we have identified premises. This will greatly increase our credibility with our customer base in south Wales. We are increasing turnover each month even in this downturn and we look forward to greater growth as the economy comes out of recession.” •
www.phoenix-hire-sales.co.uk |
