Interesting times for Builders Merchants as investment grows    

by BMF CEO John Newcomb
10 April 2018

John NewcombThere are signs that we could be at the start of such a period right now, with the announcement that Parkers, currently number 18* in the builders’ merchant top 20 by turnover, has been acquired by Cairngorm Capital Partners who have already announced ambitious growth goals for the next five years.  With no family members coming through to take over from him, it made sense for Tom Parker to sell the business he founded and we wish the new owners and Parkers’ management team every success.   

I suspect many are wondering if this is the beginning of a wider trend, as venture capital actively targets a thriving merchant industry with significant future growth prospects.  Several other leading independent merchants are also looking to private investment companies to help them grow their businesses.  Huws Gray, the 6th* largest group, is among the latest to put a significant shareholding up for sale to fund major expansion plans, while MKM, the largest independent builders merchant, has been working with private investment partners for some time.  

There are likely to be more announcements like this, but it won’t be a path that every independent will choose to take.  Fortunately, there is space for merchants of all sizes, and ownership, within the market place.  As the BMF celebrates its own landmark anniversaries (110 years as a trade association and 40 as a Federation), some of our members are beating us hands down in the longevity stakes.  For example, Elliott’s has remained a family-run business for more than 175 years, or six generations.  Others, like Chandler Material Supplies who were named Independent Merchant of the Year (1-10 branches) in last year’s BMN Awards, now have the fourth generation of the family on board. At the same Awards, Lauren Penney, daughter of current MD, Julie Chandler, won Trainee of the Year.  

'Developing Future Merchant Leaders'

Investing in their people is key to the success of any business.  Our industry is constantly developing and more than ever we need the drive, ambition, imagination and skills of the next generation of merchants to carry it forward.  The BMF plays an important role here, not just through the formal management and leadership courses we offer, but also through the informal support network of the BMF Young Merchants Group.  

Formed some 25 years ago, the Group was established to nurture the development of young merchants and suppliers by providing a forum for ideas and expertise to be shared, to help individuals and businesses grow.  Many of its early members now hold director or MD positions, with one, Knauf Insulation’s John Sinfield, having also chaired the Construction Products Association.  

The Group’s core purpose remains the same today, providing opportunities to build long-lasting business relationships, join in open debates, receive presentations from a wide variety of business speakers and take a wealth of knowledge back to their companies – and, of course, there is also a social element!  Not surprisingly, the value placed on the Group by former and current members is unanimously positive.   

On 11 October, during UK Construction Week at the NEC, we will be holding our very first Young Merchants Conference; confirmation that the Group has not only come of age but will continue to play a crucial role in supporting future generations as they move the business of merchanting forward.  

Register now for the Young Merchants Conference or view our other events here.   

* Source: PBM UK Merchant Sector Top 20 January 2018

This article appeared in the April edition of BMN