BQ Yorkshire Issue 01 by We Are UMi

www.bq-magazine.co.uk

ISSUE ONE: SUMMER 2009

SEE THE LIGHT Yorkshire business Harvard illuminates the world NO BOATS TO CHINA Just Tray’s Paul Crossley on why he won’t be outsourcing East RIDERS ON THE STORM Yorkshire’s financial industry: making a case for recovery PLANE SPEAKING Jet2’s Philip Meeson on mixing business with pleasure

ON-TREND

Why Julie Lingard’s very individual blend of fashion entrepreneurialism is very much at the cutting edge

ISSUE ONE: SUMMER 2009: YORKSHIRE EDITION

BUSINESS NEWS: COMMERCE: FASHION: INTERVIEWS: MOTORS: EVENTS

YORKSHIRE EDITION

Business Quarter Magazine

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WELCOME

BUSINESS QUARTER: SUMMER 09: ISSUE ONE Entrepreneurs, as any business guru worth half their salt will tell you, are the catalysts that keep our economy. Of course, we have large corporations too, but every vibrant economy needs an entrepreneur to find that new way of doing things to take us forward. It’s surprising then, how the UK - which once was world renowned for producing entrepreneurs - now seems in many quarters almost to sneer at them. No one will say it out loud of course, but how many parents, for example, would be really happy if their 16-year-old son or daughter were to come back home one day and say they didn’t see the point of school, but had this fantastic business idea to start right away? I suspect phrases such as: “Are you sure?”, “wouldn’t you rather go to university first and then decide?” or even “why not see the world first?” would be echoing around most living rooms. Even many business magazines, it would appear, do not seem particularly comfortable with entrepreneurs. Certainly not comfortable enough to have them on the front cover. So on that note, welcome to the first issue of BQ in Yorkshire. Entrepreneurs are our lifeblood. Every quarter, we aim to bring to business owners around the region stories of successful businesses that will inspire you and motivate you. Not just small businesses, but successful sectors and industries too. And because we know that everyone who works hard also likes to play hard, every quarter we include a little bit of leisure – cars you might try, wines you might buy, and top-end fashion to spend your hard-earned cash on. You might not have heard of BQ if your business keeps you within the confines of Yorkshire, but if you have been up to the North East in recent months you should have seen how our sister title up there has, in just 18 months and five issues, become required reading. We hope to achieve the same down here, and this issue you will find interviews with the likes of Philip Meeson, whose Jet2 creation would

probably win the prize for best Yorkshire launch of the past decade, if such a prize existed. How does he see the future for his airline panning out? Find out here. We also speak to Grimsby lass Julie Lingard, whose fashion empire, having grown too big for Leeds’ Corn Exchange, could now be on the verge of going global. The same could apply to John McDonnell in the world of street lighting – one sector that for once the UK leads the world in. We are not just focused on Leeds. Richard Jackson, who we invited to our business lunch, is a Harrogate man through and through, and a real success in having managed to launch two successful businesses on top of being born into one. Nor are we restricted to talking to Yorkshire folk. Paul Crossley originally hales from Chipping Sodbury, but his achievements at Just Trays gives the lie to the idea that the UK is no longer a base for successful manufacturing. Finally, we wouldn’t be a news magazine if we weren’t aware of the ravaging that has taken place within Yorkshire’s financial services and property in recent months. So, we’ve spoken to some of the survivors, to see what has pulled them through. We’re not just stopping here, so if you have ideas for people you would like to see profiled – including your good self – do drop us a line at peterb@bq-magazine.co.uk We look forward to hearing from you.

CONTACTS ROOM501 LTD Christopher March Managing Director e: chris@room501.co.uk George Cheung Director e: george@room501.co.uk Euan Underwood Director e: euan@room501.co.uk Bryan Hoare Director e: bryan@room501.co.uk Mark Anderson Business Development e: mark@room501.co.uk Debi Coldwell Senior Sales e: debi@room501.co.uk ADVERTISING For advertising call Mark Anderson 0191 419 3221 EDITORIAL Peter Baber Editor e: peterb@room501.co.uk Jane Pikett Sub Editor e: jane@thecreationgroup.co.uk Mike Clark Contributor e: mike@mediagiants.tv DESIGN & PRODUCTION Euan Underwood e: studio@room501.co.uk PHOTOGRAPHY KG Photography e: info@kgphotography.co.uk room501 Contract Publishing Ltd, 10 Baird Close, Stephenson Ind Est, Washington, Tyne & Wear NE37 3HL www.room501.co.uk

THE LIFE AND SOUL OF BUSINESS

room501 was formed from a partnership of directors who, combined, have many years of experience in contract publishing, print, marketing, sales and advertising and distribution. We are a passionate, dedicated company that strives to help you to meet your overall business needs and requirements. All contents copyright © 2009 room501 Ltd. All rights reserved. While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All information is correct at time of going to print, July 2009.

YORKSHIRE EDITION

BUSINESS QUARTER |SUMMER 09

BUSINESS QUARTER: SUMMER 09 NO BOATS TO CHINA

Features

36 PLANE SPEAKING Jet2 will keep mixing business with pleasure, says chief exec Philip Meeson

60 LONDON, PARIS, LEEDS

30 PLANE SPEAKING

Fashionista Julie Lingard on why entrepreneurialism is always on-trend

16 LIGHTING THE WAY John McDonnell on the way forward for lighting technology firm Harvard

30 NO BOATS TO CHINA Just Trays’ Paul Crossley on why he won’t be outsourcing East anytime soon

BUSINESS QUARTER | SUMMER 09

66 RIDERS ON THE STORM The finance industry success stories making a strong case for recovery

72 BUILDING THE FUTURE The region’s property scene, and the canny developers riding the recession

YORKSHIRE EDITION

26 AS I SEE IT Tom Riordan’s case for carbon capture

MOFFATT ON WINE

40 BUSINESS LUNCH Richard Jackson enjoys the service - or at least most of it - at Hotel du Vin

46 WINE

Regulars

KPMG’s Iain Moffatt enjoys a sporting weekend with two fine Burgundy wines

48 FASHION Beautiful knitwear ... no sweat

ON THE RECORD Business making the news in Q2/09

NEWS Who’s doing what, when, where and why, here in Yorkshire

20 COMMERCIAL PROPERTY The landmark developments building the region’s industrial landscape

52 EQUIPMENT Fountain pens with flair

46 NO SWEAT

56 MOTORING Sue Blake swaps her sporty soft-top for the award-winning Volvo XC60 SUV

80 FRANK TOCK Gripping gossip from our backroom boy

82 EVENTS The best events this coming quarter

48 BUSINESS QUARTER |SUMMER 09

ON THE RECORD

SUMMER 09

Yorkshire International Business Convention proves a hit, Bradford’s film industry wins worldwide recognition, and the Institute of Directors gets a new regional head - it’s all on the record this quarter >> Cleese and Stewart show that Yorkshire ‘can do’ The organisers of the Yorkshire International Business Convention (YIBC) say they have already got several hundred bookings in for next year’s event, after introducing a ‘can do’ theme at this year’s event which proved a real hit with delegates. Highlights of the show included speakers John Cleese, who apart from his TV and film career is also visiting professor of business psychology at Cornell University, and Dave Stewart, one half of pop duo Eurythmics. The latter got audiences at the main show in Harrogate and the spin-off show in Bridlington to come up with the words for a song which matched the theme of the convention – which he then performed on stage. This can now be heard on the Convention’s website, www.yibc.biz YIBC chief executive Mike Firth said: “The idea of the song not only captured the imagination of all our delegates, it also summed up what this year’s convention was all about, which was getting people to think outside their comfort zones, something we all need to do to get through this current recession.” The YIBC was also the culmination of Leeds Business Week, which saw a range of events taking place at Leeds Metropolitan University’s Rose Bowl; the new home of Leeds Business School. Key speakers at the event, which was organised by Marketing Leeds and sponsored by Yorkshire Bank, included Innocent Drinks co-founder Richard Reed. He addressed an audience of 13 to 15-year-old would-be entrepreneurs at Innocently Enterprising, an event funded by Yorkshire Forward. “The job of the entrepreneur is to prove the doubters wrong and to think ‘I can’ not ‘can I?’,” said Reed, who counts Leeds as his home town. “I thoroughly enjoyed taking part.” Next year’s event will be on June 11.

>> Bradford the new Hollywood Bradford has recovered from seeing the demise of its regeneration company by winning the accolade UNESCO City of Film. The campaign to win recognition for the city where Billy Liar, The Railway Children and Yanks was filmed was organised by the National Media Museum, Screen Yorkshire and Bradford Metropolitan District Council, and chaired by Steve Abott, the Bradford-born producer of the hit films A Fish Called Wanda and Brassed Off. While the designation brings no funding in its own right, the campaign has already been backing local filmmakers to produce films about the city. Abbott said: “I am confident we can bring further credit to both Bradford and UNESCO with our ongoing City of Film project.” The news comes just a month after Bradford council announced that urban regeneration company Bradford Centre Regeneration (BCR), would be wound up in 2010 and all its regeneration activities taken back within the council. BCR, founded in 2004, had started off with impressive plans including a proposed ‘mirror pool’ in the centre of the city. But this failed to win Lottery funding, and other projects, including a new shopping centre developed by Westfield, have been put on hold because of the economic climate.

>> New group sees SME optimism

Inspiration: Stewart (above) and Reed

BUSINESS QUARTER | SUMMER 09

Small businesses in Yorkshire are significantly more optimistic than their larger cousins, a survey has discovered. A survey carried out for The Alternative Board (TAB) - an American mentoring group which is launching in Yorkshire this year - found that 67% of business with a turnover of between £1m and £10m were ‘more optimistic’, while

SUMMER 09

exactly the same number of businesses with a turnover of between £50m and £250m were ‘less optimistic’. TAB UK chairman Martin Allison said the survey, which was based on around 100 responses, appeared to fly in the face of current wisdom that small businesses have been hardest hit by the credit crunch because they rely more on securing bank funding. Allison, who has a background in banking, said the founders of TAB, who are using Yorkshire as a springboard for launching into Europe, had been, “overawed by how many well-managed, third-generation businesses there are here”. TAB, which is aiming to roll out across the UK on a franchise model, works by inviting members to join. Members are then invited to monthly board meetings made up of a group of other owner managers who can review their progress on peer-group basis. They also get one-to-one coaching delivered by each franchisee. Depending on their level of membership, which costs between £50 and £750 a month, they can also get IT support, including business planning, and access to a global network of advice which includes more than 4,000 online articles. Allison, who is also Dean of Leeds Business School, admitted that such a model relied heavily on the ability of each individual franchisee being recruiting now. “They will be the glue,” he said. The first Yorkshire TAB group has already been up and running for a couple of months, and includes Jonathan Whiteley from ProAktive Risk Group, Ian Thompson from Thompson Brand Partners and James Cain from Harrogate Spa Water. But TAB already has considerable competition in Yorkshire from Vistage International, another American peer-topeer mentoring organisation. It has been operating in the region and across the UK for several years and has several groups in Yorkshire already. Its members include John McDonnell, who is interviewed in this magazine (see p14). Chris Gilroy, Vistage International’s UK

ON THE RECORD

chief executive, said: “Vistage has a 20-year history in the UK, and we do not use franchising. We select our group chairmen carefully, and do not offer this role to anyone who can simply pay a franchise fee. “Vistage also provides world-class speakers and a world-class, members-only web resource.”

Change over: Wood and Thompson

>> Wood is new IOD chair

>> East Coast operator “walking away” Transport minister Lord Adonis has hit out at National Express for “walking away” from its long-term contract to run the East Coast main rail line. The company is insisting that it is still running the East Coast service over the summer, but in a trading statement said it would no longer be funding National Express East Coast, the subsidiary specifically set up to run the line when it took over from GNER two years ago. That means the Government will be stepping in to take over the running of the route some time later this year. Adonis said: “It is simply unacceptable to reap the benefits of contracts when times are good, only to walk away from them when times become more challenging.” He has appointed Elaine Holt, until recently managing director of First Capital Connect, to run the new Government-funded East Coast Main Line Company when it takes back the contract. But despite protests from many local MPs, including Hugh Bayley, MP for York, he said the Government will be re-tendering the contract later this year.

A woman who founded her specialist glazing company following the death of her husband has been named the new regional chairman of the Institute of Directors (IoD) in Yorkshire and the Humber, replacing outgoing chair Nimble Thompson. Margaret Wood founded specialist engineering and manufacturing firm ICW Modular Glazing in 1991 following the death of her husband Tony. Faced with the challenge of supporting her children, she founded ICW and has guided the Wakefield business from a small niche firm to a company that has a worldwide customer base ranging from Formula 1 teams to Kew Gardens. Wood, who is also chairman of Wakefield First, said: “One of my chief aims will be to ensure that Yorkshire retains and develops its young talent. This will maintain and secure our position as a major force in the UK economy.”

My chief aim will be to retain and develop Yorkshire’s young talent

BUSINESS QUARTER |SUMMER 09

NEWS

SUMMER 09

Yorkshire’s business women meet up with their Indonesian counterparts, Leeds University unveils revolutionary washing technology, and Wolseley pulls out of Ripon >> New head sought Science City York, which aims to boost the knowledge economy in York and North Yorkshire by encouraging more high-tech and science-based companies to locate and grow there, is looking for a new chief executive. The company hopes to make the appointment ahead of a planned extension of its activities to include nationally significant development projects in emerging sectors such as low carbon futures, advising on a new Science City York property strategy for the city, and an application to secure in excess of £20m from the European Regional Development Fund to help stimulate growth in the city’s knowledge economy.

>> Extra Spice Utility outsourcing company Spice has appointed two new non-executive directors. Martin Towers was most recently finance director for Kelda Group and is also non-executive director at RPC Group and KCOM. Former senior Accenture partner Julie Baddeley is a non-executive director at Greggs, Camelot and the Department of Health and also lectures in business at Oxford University.

company £511m in the long run. The company’s £72m profit for the nine months to the end of April was down 88 per cent on a constant currency basis compared with a similar period the year before.

>> Boost for Mark Mark Firmin, the head of restructuring at KPMG in Newcastle and currently administrator for ScS Upholstery, has been promoted to the role of head of restructuring for KPMG right across the North. This follows the promotion of Richard Fleming, previous northern head, to be KPMG’s national head of restructuring.

>> Wolseley slims down in Ripon Wolseley, once one of Ripon’s biggest employers, is to close its distribution centre in the town in the light of continuing deterioration in almost all of the building and plumbing supplier’s key markets. Centres are also closing at Didcot, Chorley and Henfield with the total loss of some 270 jobs. Redundancies in its French and US operations have been more severe, with 557 going in France and more than 1,000 jobs cuts in the USA, which has seen the sharpest drop in market performance. The company says restructuring costs of £336m will save the

BUSINESS QUARTER | SUMMER 09

Mark Firmin

>> Access back in the black York-based Access Intelligence is back in profit in its first half results, although it has changed its mind on selling two of the three non-core businesses it put up for sale last year. The software company made a £199,000 pre-tax profit in the six months to the end of May 2009, compared with a £1.2m loss for the same period the year before. Turnover was also up from £1.8m to £2.6m. In that time it managed to sell off Marketing Guild, one of its subsidiaries. But now with a changed board headed by former Sage boss Michael Jackson it plans to hold on to Wired-Gov, its PR and media relations business which has been bolstered by the acquisition of Solcara. It also plans to develop its Willow Starcom business, despite the fact that it admits it does not fit into its core business areas.

>> Not Wolseley quite slims shining down in Ripon through Leeds-based Wolseley, once jewellery one of supplier Ripon’s biggest employers, is Abbeycrest says to close it has its successfully distribution centre in the completed the town first in phase the light of much-vaunted of continuing deterioration restructuring programme,inbut almost the cost all ofof the building doing so hasand led to plumbing the group supplier’s having key to markets. post a full-year Centres loss areofalso £7.1m, closing compared at Didcot, Chorley with £1.1m and last Henfield year. The withcompany, the total loss which of somepreviously had 270 jobs.focused Redundancies on low-margin, in its French and US operations high-volume unbranded have been products, morehas severe, with 557 its changed going UK supply in France chain andsoover that1,000 it now jobs cutsdirect supplies in thefrom USA,itswhich Thailand has seen factory, the sharpest some brought drop in third market partyperformance. manufacturing Thein

Dortech says the action by many glass manufacturers, none of whom are UK-owned, would drive many glass suppliers out of business

SUMMER 09

house, and company says cutrestructuring 150 jobs. It iscosts nowoffocusing £336m willhigher on save the volume company branded £511m products, in the long and run.already has The company’s launchedprofit threeofnew £72m lines for– the nine months Gorgeous Gold, to the Fluid end and ofOsare. April was down 88 per cent However, while on athe constant company currency has agreed basis compared most of its with refinancing, a similaritperiod still has the toyear agree abefore. further £1.7m in working capital, and is applying to repay a liability to HM Customs in instalments. Should either of these bids not prove successful by September, it admits it could have trouble continuing as a going concern. Abbeycrest has made a loss every year bar one since 2003.

>> Shattering news A Huddersfield-based curtain walling and door supplier has launched a petition on the Downing Street website calling on business secretary Peter Mandelson to

investigate what it claims are “extraordinary” attempts by dominant glass manufacturers in the UK to raise prices by 50 per cent. James Sutherland, managing director of Dortech, says the action by the manufacturers, none of whom are UK-owned, would drive many suppliers out of business and significantly increase UK construction costs. So far more than 700 people have signed the petition.

>> High hopes for new cleaning A Leeds University spin-out company which is developing new technology for what it claims is virtually waterless clothes washing has attracted investment of £920,000 from a syndicate led by Enterprise Ventures. Xeros has used 30 years of research at the university to patent

NEWS

a polymer-based cleaning alternative that uses recyclable plastic beads to clean the clothes. Because it uses 90 per cent less water than conventional cleaning, the company claims it could have a huge impact on the cost and environmental damage caused by conventional washing. As part of a strategy to target the commercial washing market initially, it has signed a deal with GreenEarth cleaning, an environmentally friendly dry cleaning business, to sell the technology across North America.

>> Severfield looks up Structural steel company Severfield Rowen says it now expects its full year results to be ahead of market expectations thanks to strong trading in the first five months of 2009. But at the same time it is warning that prospects >>

© 2009 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.

Be better informed In these turbulent times, how solid is your business? Say a main supplier collapses. Or a major client. Are your eyes open to every eventuality? Are you prepared for the unexpected? KPMG is here to help you do this – with the experience to understand the potential risks your business faces, and the specialist skills to help you prepare for them. To find out more, visit kpmg.com/succeeding Iain Moffatt Office Senior Partner iain.moffatt@kpmg.co.uk 0113 231 3231

BUSINESS QUARTER |SUMMER 09

NEWS

SUMMER 09

>> are continuing to fade some way below most industry predictions. It says it is also beginning to see demand falling away in the UK construction market, so while its order book currently stands at £267m, this will increasingly be fed by export sales. It says 2010 is looking less certain than 2009 and so it is seeking to make further cost reductions. But it hopes for a return to form in 2011, particularly in its joint venture in India.

Links: Josh Wong with Joanna Lavan of Connect China (right) and David Shepherd and Susana Cordoba from Yorkshire Forward

>> Premier Farnell sees green shoots Electronic and industrial product supplier Premier Farnell says it has started to see sales improve again in April and May this year, although first quarter results released in June showed a continuing sales slide. In the three months to the end of April, pre-tax profit dropped 63 per cent to £9m as the sales slide seen in the final quarter of the previous year continued. But the company says that since the end of the reporting period, year-onyear group sales in April and May showed a distinct improvement on March. The Leeds-based company has focused much of its recent restructuring effort on web sales, and these have particularly taken off in its European division, with Farnell Europe accounting for 53 per cent of all sales via eChannels. Markets in developing countries have also been strong – Eastern Europe sales were up 67 per cent, while sales in India were up 167 per cent.

>> Northern slims down in Hull Northern Foods is to close its ready meals manufacturing plant in Hull, once its home city, after its major customer terminated the contract with the now Leeds-based company. In the year to the end of March, the food and ready meals supplier saw total group revenues increase from £931.9m to £971.2m. Total pre-tax profit, however, dipped from £50.1m to £47.5m, although the company blames this fall on a reduced pension credit: it says underlying profit before tax grew by 13.4 per

BUSINESS QUARTER | SUMMER 09

>> Yorkshire in China Yorkshire Forward chairman Terry Hodgkinson has just returned from leading a tour of five cities in China to promote Chinese investment into the region. Hodgkinson and Josh Wong, an associate at DLA Piper who helped organise the tour, both spoke at the launch event where Yorkshire was one of only three regions in the world to present to the Zhejiang Trade and Investment Symposium, one of the largest investment shows in China attended by more than 10,000 delegates. The tour also included meeting officials in Wuxi, Chengdu, Beijing and Liyang. “Chinese companies are still looking to expand in new markets overseas, encouraged by the Chinese Government’s call to globalise,” said Wong. “Rather than being discouraged by the worldwide economic downturn, they are sensing new opportunities and are more determined than ever to pursue these as domestic growth slows.”

cent, despite the strength of the euro. The company says it is finding increasing business with the value retailing sector. Although sales to its top five customers by value – Marks & Spencer, Tesco, Sainsbury’s, Asda and Morrison’s still stand at 77 per cent, the value sector now accounts for around a fifth of its business. Chief executive Stefan Barden said: “Northern Foods has delivered a resilient performance in challenging economic conditions. Next year will be equally challenging, with the continuation of food inflation and competitive pressures. Our operational and financial strengths position us well to benefit when markets recover.”

>> Straight win down south Straight, the Leeds-based supplier of recycling bins and other environmental products, has won a £150,000 contract to provide kitchen caddy food waste containers to more than 150,000 households in Hertfordshire for approximately £150,000. The five and seven-litre kitchen caddies, which are manufactured for Straight in Hull, encourage householders to separate food waste in their kitchens for collection at the kerbside and subsequent composting.

SUMMER 09

>> New man in at Pace Set-top box manufacturer Pace, perhaps best known for operating out of Salts Mill in Saltaire, has appointed Scott Sheldon as Chief Strategy Officer. Scott will join the Pace executive team to drive development of the group’s future strategy in the global market for digital TV technology. He joins Pace from N M Rothschild & Sons where he was a director and global head of technology investment banking covering hardware, software, services and semi-conductor clients on a global basis. Before joining Rothschild, Scott was founder and chief executive of eMed, a leading US provider of network-based electronic medical image management software and internet services.

>> Talks end on Infoserve Infoserve, the local search directory company, says talks with an interested party about a possible takeover have ceased with no result. The AIM-listed company, founded by Pace co-founder David Hood and others, was due to announce its full-year results as BQ was going to press.

new farming programme we are investing in taking a leading role in applied farm research and making a contribution to helping the long-term sustainability of British farming.”

>> Pork Pie saviour for Allerton Allerton Group, the bridge manufacturer and steel fabricator based at Northallerton, has been bought out of administration by a man who makes pork pies. The group had been trading since administrators Hunter Kelly and John Sumpton from Ernst & Young were called in in April. Although it had been suffering cash flow problems, the administrators felt its underlying business was good. Now John Gatenby, who has owned pork pie manufacturer Vale of Mowbray based in Leeming Bar since a management buyout in the 1990s, has stepped in to buy

NEWS

the company, saving 117 jobs. Before it went into administration Allerton had been involved in prestigious projects, including the re-development of Lansdowne Road Stadium in Dublin.

>> Weak sterling helps Leeds The Leeds Group appears to have benefited from the weakness of sterling, posting a 16.7 per cent jump in revenues for the six months to the end of March, despite pre-tax profits more than halving to £134,000. The textile company, which is based in Leeds but has its main focus of operations in Germany, says much of this growth was down to increased sales in the European market of Hemmers-Itex, its sole operating subsidiary. But its recently established Chinese subsidiary is also already contributing to the bottom line. The company says that given European markets are unlikely to improve in the short term, the outcome for the next six months remains challenging. >>

Merger: Burton (right) with Viv Hallam of Braveheart

>> Morrison’s goes farming Morrison’s is breaking into farming by helping run 700 acres on the Great Steward of Scotland’s Dumfries House estate, mainly for research purposes. The estate was saved from demolition by a consortium led by Prince Charles in 2007. The Morrison’s farm on the estate is one of two the supermarket chain eventually hopes to be operating. It aims to research how farming efficiency and sustainability can be improved. The project has the support of both the Scottish Agricultural College and the National Farmer’s Union for Scotland. The farm is part of Morrison’s wider farming programme which also aims to encourage farmers to deal with the supermarket more online, to improve supply chain efficiency. The programme is already running one research project looking at the breeding of cattle which should be completed in August. Morrison’s chief executive Marc Bolland said: “Through our

>> Scots snap up Yorkshire investment firm Inkopo, the Wakefield-based investment firm which operates the Viking Fund aimed at early growth businesses, has been bought by Braveheart, an AIM-listed technology commercialisation and investment company, in a deal worth £1.31m, depending on how well Inkopo performs in the next few months. Perth-based Braveheart sees the acquisition as a key way to drive its business in the north of England, particularly by tapping into the relationships with academics and the public sector which Inkopo has built up since it was founded by Andrew Burton in 2002. Burton said: “Being part of a larger organisation gives us access to additional resources and means that we can grow the business at a faster rate than would otherwise be possible.”

BUSINESS QUARTER |SUMMER 09

NEWS

SUMMER 09

Vincent (front centre) and the RAI

>> Scoop for the Armouries The Royal Armouries has become only the second venue in Leeds to win the GOLD Accredited in Meetings (AIM) certification, something London’s Excel, Manchester’s GMEX, the Harrogate Conference Centre and the SECC in Glasgow have yet to win. The accreditation, organised by the Meetings Industry Association, aims to identify those venues which consistently deliver exceptional levels of service in arranging conferences and meetings. Royal Armouries International managing director Jim Vincent said the award, “recognises the breadth and standard of our services, facilities and total dedication to customer satisfaction”. Nicola Lockwood, Manager of Conference Leeds, said: “It further demonstrates the excellent quality conference buyers can expect when they host their events in the city of Leeds. RAI plc has been providing an excellent offering for all types of events, from fine dining for a dozen people to magnificent gala dinners for 1,000, for a long time and this award recognises their commitment to quality at all levels of their operation.”

>> WYG warns on costs White Young Green is warning that it will face ‘significant’ exceptional costs in the year to the end of June, mainly due to its current restructure, which has already led to the closure of some of its international offices. However, the multidisciplinary consultancy, which parted company with is former chief executive Lawrie Haynes in January after just 18 months and has seen significant board

BUSINESS QUARTER | SUMMER 09

changes since then, says the restructuring is now largely complete. In a pre-close statement it says new contracts include a deal with the London Borough of Merton to project manage £7.5m-worth of new school sixth form buildings ahead of a Building Schools for the Future programme, the appointment of the company as construction design and management co-ordinator in a £1.25bn consortium deal to widen key sections of the M25, and a €4.9m deal to support the European Commission on a three-year development programme in Serbia.

>> Sweet taste goes sour Shares in Glisten fell by more than a quarter at the end of June after the Harewood-based sweet and health food producer revealed that full-year results would be significantly lower than previously suggested. The company said an internal audit started earlier in the month had uncovered accounting and management failures at its Halo Foods subsidiary in Wales. This had led to higher materials and operating costs not being accounted for in it second-half results. Glisten insists Halo remains cash generative and profitable; total group profits for the full year to the end of June will be £5.8m, compared with £8.0m in 2008. Halo’s finance and managing directors have been suspended pending an investigation.

>> Howard drops role

Growth: Geoff Whiteley with Stewart Henchie of Kew Gardens

>> University couple get Kew endorsement A husband and wife team who gave up an academic and administrative post at Leeds University to launch a business selling a peat alternative made from mineralised wheat have already won repeat orders from Kew Gardens and had their product – called Strulch – endorsed by the Eden Project in Cornwall. Geoff and Jackie Whiteley say Strulch reduces weed growth by 95 per cent, but also has strong water retention properties. The company is already on a six-figure turnover and new products are in the pipeline. Mr Whiteley was a former soil scientist and biology lecturer at the University and, under an intellectual property licensing agreement, the university takes a cut from the sales.

Former Tory leader Michael Howard has stepped down as a non-executive director of imJack, the Leeds-based communication software provider for the education sector. The company recently took on a new management team with Len Sanderson stepping in as chief executive, and changed its name from Amteus. In its half-year results for the six months to the end of March, posted in May, it came in with a loss of just under £1m (down from £1.6m the year before) on revenues of £172,585.

>> Western Garage changes hands One of Harrogate’s longest-established vehicle service and MOT testing centres has been acquired in a management buy-out. Western Garage, Valley Mount, Harrogate, which is thought to date back to before World War I, has been acquired by its manager of the last 11 years, Paul Atkinson, and mechanic Andy Barker in a deal backed by Yorkshire Bank. The two new directors have acquired the business from previous owner John Greenwood for an undisclosed sum. Local solicitors McCormicks and Berwins and Knaresborough-based accountants Hayward & Co advised on the deal. >>

SUMMER 09

COMPANY PROFILE

ONLY FIRMS THAT LOOK BEYOND THE RECESSION WILL THRIVE

EADLINES over the past months have made grim reading and some very good firms have fallen by the wayside, but for the fittest and most agile businesses, new opportunities are opening up. Weaker or more exposed firms continue to suffer and this offers both survivors and entrepreneurs a greater potential to grow and flourish while looking to a future beyond recession and towards improved market conditions. In the first half of this year, Appeal PR has seen its clients change the way they do business and, more importantly, think about how to meet the challenges of current conditions. This is the time when businesses not crippled by the current markets should be looking to the future and planning for a time when the negative trends have stopped. It is a time to look beyond the recession, invest in initiatives and take advantage of the opportunities thrown up by the turmoil. Smart management of PR and marketing budgets this year should deliver more return than ever before as markets thin out and there is less competition for your messages. Even maintaining a reduced marketing or PR spend could deliver significant increases in share of profile as the more short-sighted cut budgets and lose momentum. With firms reviewing almost every expense and renegotiating with suppliers, itâ&#x20AC;&#x2122;s vital that you give yourself the best chance to be considered for new work and make pitch lists. Refresh your key messages; keep your name prominent in the media; smarten up your internet presence; network subtly through existing clients and in new circles. Expect your PR and profile advisers to think differently, give more value and keep you abreast

business change, with confidence and sensitivity to battered markets, has never been more crucial. Shrewd businesses are using the current situation to best advantage by differentiating themselves from the competition and making the most of the positives. As much of the regional media has turned its attention to highlighting success and celebrating businesses that grow, and with fewer voices competing to be heard, despite the challenges, now is the time to invest in your profile. Relatively modest profile budgets can now make the difference between simply surviving, or truly thriving in a few years time. Lay the foundations now and take advantage of the huge potential gains for your business in the next five years. Itâ&#x20AC;&#x2122;s never been truer that cash is king, but confidence is definitely next in line to the throne. Above: Paul Snape, managing director, Appeal PR

SMART MANAGEMENT OF PR AND MARKETING BUDGETS THIS YEAR SHOULD DELIVER MORE RETURN ... AS MARKETS THIN OUT AND THERE IS LESS COMPETITION FOR YOUR MESSAGES of the opportunities and developments in key media (such as the launch of this magazine). The adaptability of Yorkshire businesses is well recognised, having been tested in previous recessions, but considered communication of

Appeal PR Chatsworth House 6a Montpellier Street Harrogate North Yorkshire HG1 2TQ Tel : 01423 569 999 www.appealpr.com

BUSINESS QUARTER |SUMMER 09

NEWS

SUMMER 09

>> Good year for Engage Engage Mutual saw its customer base increase by 18 per cent over 2008, while the launch of a new health insurance subsidiary and the acquisition of Premier Health Benefits added an extra 30,000 health cash plan customers. The Harrogatebased mutual says tight control over expenses and a “careful” approach to risk helped it weather the financial storms of the year. It maintained its position as the UK’s third largest provider of life insurance for the over-50s market, while an extra 24,000 child trust funds were opened, bringing the total managed by Engage to just under 200,000. The mutual has also extended its sponsorship of the Super League for another two years. Chief executive Andrew Haigh said: “The market conditions experienced in 2008 meant that investment returns were impacted across the industry. We took steps wherever possible to protect them from the worst effects of the market volatility. Looking forward to our next trading year, we anticipate continued market challenges, but plan for cautious business growth in areas where we have identified potential.

Andrew Haigh

>> VP beats downturn Harrogate-based equipment rental company VP managed to increase both profit and turnover last year, despite the economic downturn. Pre-tax profit for the year to the end of March came in at £21.7m, up 8 per cent on the previous year’ s £20.2m, while turnover increased by 1 per cent to £150.1m. Operating margins were also up, from

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15.6 % to 16.8%. Chief executive Jeremy Pilkington said the group had seen a particular falling off in demand among the private housing and privately funded construction sector, and this had been reflected in the company’s UK Forks division coming in with the poorest performance and a near-£3m drop in revenue to £13.2m. However, he said infrastructure and regulated markets held up well throughout the year covered by the figures, although they have started to soften since then. Total investment in the rental fleet was reduced by a third over the year because of the worsening economic situation.

>> PHP expands with acquisition Baildon-based Private Health Partnership (PHP) has acquired consultancy Health Care Matters for an undisclosed sum as its founder George Connelly is retiring. Founded in 1993, Health Care Matters has an annual premium income of £1.2m. PHP, part of the Skipton Group, provides advice on private medial, dental and travel insurance for companies and individuals. This acquisition is PHP’s ninth since it became part of Skipton.

based company has had some success in attracting new business, including winning a six-year contract with the Department of Children, Schools and Families and a five-year contract to provide print procurement and data analysis services for T-Mobile.

>> Printing monster arrives in Bramley Bramley-based printing firm Digital Plus claims it is the first in the country to take possession of a flat-bed printer that can handle 3050 x 2500mm in a single panel, and print directly onto aluminium, glass, sheet metal, PVC and soft furnishings. The £200,000 Oce Arizona 350 XT had to be specially flown in from Canada. The company is also celebrating its tenth birthday by launching a new graphic design division.

Craig Squelch (infront) and guests

>> Communisis hit by FSA rule Communisis says its continuing focus on higher value marketing services is paying off, with strong demand continuing despite the downturn in its technology and services business. In an interim management statement it says Absolute Intuistic, the data services company it acquired in December, is already beginning to win business from existing Communisis customers. But the group’s transactional print business has been hit by a FSA ruling substantially restricting the use of promotional cheque mailshots, which Communisis had been building a strong market in producing. Demand is also weaker for its direct mail services, particularly from financial services companies, and to a lesser extent for commodity printing. The Leeds-

>> Woodlands celebrates five years Woodlands Hotel in Leeds held a reception with local businesses in June to mark its fifth birthday. The boutique hotel off Gelderd Road was the first to be launched by the locally owned Tomahawk Group, which has since taken on and revamped both the Great Victoria Hotel in the centre of Bradford and Aston Hall near Sheffield. Woodlands general manager Craig Squelch said: “One of the ways we wanted to mark our anniversary was to host a drinks party to say thank you to our loyal corporate clients, many of whom return to us time and again.”

SUMMER 09

NEWS

>> Renew focuses on value Specialist engineering group Renew Holdings says it is continuing to focus on quality of earnings rather than revenue growth as its operating margin for the six months to the end of March rose from 1.7% to 1.8%. Revenue over the same period, however, dropped from £192.9m to £171.6m, and pre-tax profit dipped slightly from £3.9m to £3.5m. The company says it is continuing to scale down its exposure to the specialist building market in the light of market conditions, and 40 per cent of its work is currently taken up by specialist engineering. Although smaller revenues have led to its cash balance dropping from £25.7m to £17.5m as it makes more use of working capital, the group says its balance sheet remains debt-free. Projects it has secured over the period include building the memorial to the victims of the 7 July London bombings in Hyde Park.

>> Expat store expands to Cyprus Thomas Green’s, the Ripon-based international retail franchise business aimed at the UK expat community in Europe, has opened its most easterly branch in Cyprus. The company, which aims to sell well-known British brands to homesick expats and curious Continentals, already has branches in France, the Netherlands, Ibiza and Portugal. The latest venture in Derynia near Famagusta in the

Getting to know you: Forward Ladies and the Indonesian delegation

>> Business women link up Leeds-based networking group Forward Ladies, one of the north’s fastest growing women’s networking and business support organisations, has been building relationships with a group of high powered women from Indonesia. Members of Muslimat Nahdlatul Ulama – the women’s branch of NU, the national Islamic organisation in Indonesia which has more than 15 million members – were in Leeds for a flying visit organised by the international office of the University of Leeds. Led by doctor and group co-ordinator Nedra Binti Ali, the group included a former minister for women’s affairs and heads of education and economics. Among topis discussed at the meeting were quality control and developing export opportunities from Indonesia. Forward Ladies board member Margaret Wood, managing director of engineering firm ICW UK, said: “Today’s meeting was an important step in building relations with organisations overseas. Despite geographical differences, we are bonded by our desire to empower women in business.”

south east of Cyprus is being run by Terry Ward, who has run a successful hardware shop in Buckingham for 30 years but wanted to move overseas with his wife. The shop will stock around 1,500 brands, which, as with all Thomas Green’s shops, will be available both in store and online for delivery locally.

>> PEEL gets into hotels PEEL, the Skipton-based company that provides entertainment packages for a

wide range of cruise liners, has won a contract with Warner Leisure to do the same for its Thoresby Hall Hotel and Spa in Nottinghamshire. Warner has outsourced all its entertainment at Thoresby Hall to PEEL, including the repertoire, casting and an in-house entertainment director to oversee activity. Susannah Daley, managing director of PEEL, said: “The partnership marks a new beginning in the field of hotel entertainment and it’s an area we are looking to develop further.”

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BUSINESS QUARTER |SUMMER 09

ENTREPRENEUR

SUMMER 09

LIGHTING THE WAY FORWARD Constantly striving for innovation keeps lighting technology firm Harvard at the forefront, its director John McDonnell tells Peter Baber

Next time you’re wandering home late at night and stop to check where you’re going or to wait for your straggling companions, consider the street light you may have chosen to stop beneath. There are six million of them in this country; roughly one for every ten people. Many of them burn away right the way through the night, often providing a service for little more than a carousing alley cat. Why, you may ask, when industries like aviation have been lambasted for their carbon footprint, do we still allow vast areas of our country to be lit up so brilliantly for so long in

BUSINESS QUARTER | SUMMER 09

such a costly and environmentally unfriendly manner? It’s a question that is beginning to impress many councils around the country, not least because of the rising cost of electricity. Powys Council, for example, announced last autumn that it would be turning off all except the most essential street lights in the small hours of the morning to save money. And despite the minor furore that announcement caused, the Welsh media suggest other councils may be following suit. If they do, that will be grist to the mill for John

McDonnell, managing director of Leeds-based Harvard Engineering; one of Yorkshire’s fastest growing companies. Unlike the entrepreneurs who stumble on the product that makes them rich after several false starts, McDonnell lives and breathes lighting, low-energy lighting in particular literally in fact, as every light in his house is low energy. He did a degree in electrical engineering, and then a thesis on the products he sells now – ballasts. But don’t think that these ballasts are anything to do with keeping a ship afloat. And

SUMMER 09

certainly don’t make the mistake, as I did, of referring to these light fittings as bulbs. “Bulbs grow in the ground,” he retorts, pointing out, quite rightly, that the tungsten filaments that many of us imagine when we use that word were actually phased out in the commercial and retail worlds in which Harvard operates more than 20 years ago. The ballasts Harvard makes essentially regulate what replaced them, as McDonnell explains. “Many fluorescent tubes are run from the normal mains,” he says. “Normal mains is 50Hz. The lamp comes on, gets bright and

ENTREPRENEUR

goes out 50 times a second.” At this frequency, conventional tubes are prone to flicker as the light goes on and off, and produce the buzzing sound that many people find unacceptable. “With an electronic ballast,” says McDonnell, “the lamp runs at 30,000Hz, so the lamp doesn’t have time to go out before it gets another burst of energy. It’s a lot smoother, so you don’t get flicker. And it doesn’t buzz. We know that what we first produced was 15 per cent more efficient than previous technology, and it made the lamps last longer.”

Such technology is possible, of course, because the ballast is controlled by a microprocessor, and while that microprocessor isn’t busy maintaining the 30,000Hz cycle, for example, it can be busy doing other things such as dimming street lighting in the early hours of the morning when it’s not needed. Or letting the local authority or contractor know when a light fitting, or luminaire, is about to fail. Such is the thinking behind Leafnut, Harvard’s latest flagship product. It’s a system that aims to let those in charge of maintaining a lighting system do so from any computer. A web centre which John describes as “a faceless building in Leeds”, keeps in touch through a network with every individual luminaire in the system. “The user can produce reports on power consumption, predicted failures and actual failures,” he says. “They can even send data to the work team’s PDA, so they don’t have to come into an office to pick up a work card.” Leafnut currently accounts for about 5 per cent of Harvard’s turnover, but John hopes it could easily increase to account for 25 per cent next year – and he hopes it could represent 40 per cent of a £20m turnover in five years. He says the system’s success is being driven partly by councils’ desire to save money. “And to cut their carbon footprint,” he says. “But nowadays that is saving money.” But the real boost has come from PFI. Recent PFI contracts for lighting have put much more emphasis on the need to conserve energy. “Kirklees has written its specification now so that all new installations have Leafnut control,” says John. “Warrington and Westminster have done the same. We have won, with our PFI contractor, two major contracts which will be about 100,000 units going in, and we have 300,000 units to play for yet. That’s only 400,000 out of 6m streetlights in the UK, and 54 million in Europe.” John insists the system can pay for itself within two to five years. And Leafnut’s reputation is certainly spreading far and wide. That same faceless building in Leeds also currently controls street lighting in the Australian capital Canberra. An eight-hour time difference is >>

BUSINESS QUARTER |SUMMER 09

ENTREPRENEUR no problem. The Austrian ski resort of Lech benefits from Leafnut, as do several places in Germany. But if the system hasn’t penetrated further – it has yet to enter the USA, for example – that’s because John claims the UK is actually the world leader in street lighting technology, largely thanks to the impact of PFI. Which makes John’s decision to focus on this kind of technology back in the early 1990s all the more visionary, and all the more supportive for British industry. Almost everything Harvard produces is produced in the UK, mostly at the firm’s headquarters in Beeston. But it wasn’t all smooth going at first. One of Harvard’s earliest ventures was to produce ballasts for a sunbed manufacturer. “I used outworkers outside my house in Kingston-onThames,” says John. But just at the point when the product was about to be launched, the sunbed manufacturer took fright at the adverse press such technology had been generating in the media, and decided to abandon the project. “I had made £30,000 of kit that hadn’t been paid for, and was in danger of not getting paid for,” says John. “But luckily they did pay.” Fortunately, more orders soon started coming in, and John set up his first factory in Stanningley in 1995 – taking just 13 days from the moment he decided to do so to turning the assembly line on. What impressed his new customers, including Marlin Lighting, whose first order with Harvard pushed production up from 300 to 4,000 a month in one go, was the innovation Harvard displayed. “Our product was unique in that it was a direct replacement for old technology,” he says. “Nobody had been able to make a ballast that was small enough to fit on the same footprint as the old technology.” The same forward thinking permeated the firm’s decision to move from just doing commercial lighting to doing retail spotlighting in 1998. “It was a new market, but we were one of the first to do it,” says McDonnell. “Phillips had a product, but we came up with one whose design was more suited to retailers, and was smaller than the Phillips model. It became a big product line for us, which we sold into John Lewis and Marks & Spencer. We were replacing 100W lamps with a 35W lamp, with the lamp life increased by three times.

BUSINESS QUARTER | SUMMER 09

SUMMER 09

I spent the night driving up and down the motorway, looking at the streetlights and trying to work out a cost model

That became our bread and butter business, taking us up from £2m to £7m in turnover.” The story repeated itself again when the company moved into street lighting for the first time in 2001, shortly after it moved to Beeston. “Previous attempts to make electronic ballasts for that market had failed,”

he says. “The ballasts had been poor. We took our experience in retail to create an elegant, low-cost design that was highly reliable. We adapted the design to make it suitable for outdoor use in a relatively harsh environment.” Leafnut, too, was the result of John thinking forward after a local authority engineer asked him why the streetlights he produced couldn’t be monitored. He believed they could be. “I spent the night driving up and down the motorway, looking at the streetlights and trying to work out a cost model for it,” he says. “At the time, there were a few attempts to monitor street lighting. One in Leeds had failed and the company had gone bust. The system didn’t work because they were sending messages down the mains wires, and that is inherently unreliable. So we invented a radio network and sent messages wirelessly to those streetlights.” Another innovation in Leafnut was the relative ease with which it could be installed. “Other technology that was around at the time required a commissioning crew,” he says. “You needed a team of engineers to commission each light, and you needed a lot of equipment to get the message back into a computer system. “I could see that was going to be difficult for local authority engineers to handle, so I decided we would make it very simple. The radio systems plug directly into the ballast and take their power from there. The control hub - or BranchNode in LeafNutspeak - sits on top of the streetlight, so you don’t have to have a pavement-mounted feeder pillar. We had to make it possible for the guy in the van to install and commission it. The system more or less commissions itself automatically.” He admits that innovation, and always striving to see how ideas can be developed, is a key driving force behind his way of doing business. Nearly 20 per cent of his workforce of 106 is employed in R&D. “That’s only because I am paranoid about products going obsolete and being stuck with them,” he says. “The first ballast was the biggest product when we started with it, and now it’s only 5% of the sales. We are in the electronics business. We don’t move as fast as the computer business, which is scary, but 70 per cent of our products have been designed in the last two years.”

SUMMER 09

The forward thinking that moved the company onto Leafnut also helped dramatically when the retail lighting market fell away at the beginning of 2008. “Two years ago, 70 per cent of our business was retail display,” says McDonnell. “A year ago, that market dropped by two thirds. If we hadn’t got into street lighting, we would have been in a very serious position.” Now the aisles devoted to retail lighting in the Harvard factory stand virtually empty. But it’s clear too that what drives a lot of McDonnell’s thinking is his attention to what the customer wants, something he says many people with his engineering background find hard to grasp. He certainly had experience of that in the early 1990s, when he was made redundant twice in the space of a year. The second time, he says, was when the company he was then working for, Advanced Lighting Industries, went under.

ENTREPRENEUR

“The company had great ideas,” he says. “They were manufacturing offshore before anyone had thought of it, and they had gone into all sorts of new and exciting lighting technologies. But they had poor implementation. I was the engineering

manager, and every product I looked at in the short period that I was there had a pretty serious problem with it. They didn’t know how to look after customers – they didn’t support them, and denied that there were any problems.” Luckily for him, following its collapse the company left behind some customers and John felt he could still service them. It’s evidence of their belief in his abilities that they allowed him to do so, and from that Harvard was born. “I am lucky because I studied to be an engineer,” he says, “but I was very well trained as a sales rep in my first job at Thorn lighting immediately after that. “For the first four years of my career, I was a sales guy, and only got into manufacturing after that. Many people still say to me, ‘How do you get started in business?’ I say the first thing you have to do is find a customer.” n

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BUSINESS QUARTER |SUMMER 09

COMMERCIAL PROPERTY

SUMMER 09

The commercial property sector in the region continues to make its mark with a series of prestigious new developments now released for sale and to let and re-developments at some prime landmark sites is on offer, with the size of possible units ranging from 2,000 to 180,000 sq ft. “We’ve already had one inquiry for 180,000 sq ft,” he said. “We aim to get some anchor tenants in with units of between 20,000 and 50,000 sq ft, but once that has been achieved we can also offer much smaller units. We can also offer freehold, leasehold, and design and build - so a range of options.” Rents for the industrial units should range between £4.75 and £6 per sq ft, depending on size, while office rents should come in at £16 to £17 per sq ft. Landmark Development Projects is the company behind Leeds’ Bridgewater Place.

Seeing green: The new £5.1m agricultural centre in Harrogate has been built on sustainable principles

>> Harrogate gets £5.1m agricultural centre A £5.1m sustainably built agricultural centre that aims to inject new life into Yorkshire’s rural economy and support local farmers has been opened by the Yorkshire Agricultural Society, the organiser of the Great Yorkshire Show. The Regional Agricultural Centre, sited on the edge of the Great Yorkshire Showground, will be home to Fodder, a new food shop and cafe set up and championed by the YAS, as well as Growing Routes, the Society’s initiative which supports entrepreneurial farmers. The Food and Farming Forum, which aims to deliver the region’s response to Department for Energy Food and Rural Affairs’ Strategy for Sustainable Farming and Food (SSFF) and the Yorkshire Rural Support Network will also be based in the building. The centre, built by Harrogate-based Houseman and Falshaw, has a range of sustainable features including rainwater harvesting, a ground-source heat pump to provide heating, solar thermal roof panels, sheep’s wool insulation and a roof made of sedum that is being grown by an Otley farmer who has diversified. Blended wool from British sheep provides insulation for the offices and the timber frame uses 75 tonnes of wood, all harvested from sustainable sources.

>> Landmark at Junction 27 Landmark Development Projects is starting work on a 22-acre mixed office and light industrial development near Junction 27 of the M62 south of Leeds. Hub62 is located on the A650 a mile from the junction in Morley and will offer both light

BUSINESS QUARTER | SUMMER 09

industrial units and offices – some with a frontage onto the M62 – on a freehold and leasehold basis. The site is being promoted by joint agents Carter Jonas and Knight Frank, and according to John Webster, a partner at Carter Jonas, the developers can be extremely flexible with what

>> Westwood makes base at Flaxby Country Resort The Skelwith Group has appointed Ryder Cup legend Lee Westwood to re-design the 27-hole golf course and set up an academy at the £100m country resort it is building at Flaxby. Skelwith Group is developing the Troon Golf-run course into a resort featuring bars, restaurants, luxury spa and gym, boutiques and 300 rooms. Located between York and Harrogate, the course originally designed by David Hemstock has been open since 2005 and already has nearly 700 members. Skelwith Group managing director Paul Ellis said: “Lee is a Ryder Cup legend and will be involved in bringing the biggest events in the sport to the course. The Academy will be for all abilities – from budding Lee Westwoods to the many local schools that currently use the facilities on a weekly basis.” Westwood, who will be working with golf designer Cabell Robinson, said: “This is a great opportunity to help improve the Flaxby course and bring it up to the highest standards to host the best golf events in

SUMMER 09

COMMERCIAL PROPERTY

the world.” Skelwith will be bidding to host the Solheim Cup in 2015 at the course and is also in talks to bring other major events there in partnership with Yorkshire Forward and Welcome to Yorkshire.

>> Harrison takes new stake York-based S Harrison Developments Ltd has acquired a 50% stake in the business that owns York’s West Offices complex. The investment in York Investors is the latest step in the plan to regenerate the former railway station and original station hotel buildings. The site is one of two being considered by City of York Council as home for its new headquarters and customer centre. Harrison will partner with Tarras Park Properties, part of the Buccleuch Group, to deliver the development if the council chooses West Offices as its new home. The two companies have been working closely, together with York-based architects Crease Strickland Parkin, to prepare their plans for the building’s future.

Martin (middle back)and Connell join Wendy Sockett (right) and Sue Hibberd

>> New planning team at Colliers CRE

New ownership: Tower Court

>> Tower Court changes hands A subsidiary of Doncaster-based Lazarus Properties has bought Tower Court, at Clifton Moor near York, for over £3m. The 48,000 sq ft mixed-use development, previously owned by Falcon Property Trust, and managed by CBRE Investors, provides a neighbourhood shopping centre alongside with a busy medical practice. The rent roll is in excess of £400,000 a year. Rebecca Farnsworth of the Leeds office of Knight Frank advised Falcon Property Trust.

Colliers CRE’s Leeds office has made two new senior appointments to bolster its planning team. Graham Connell has been appointed as a director and head of planning and Rachael Martin as associate director. They join Wendy Sockett and will cover the Yorkshire and North East regions. Both have joined from Sanderson Weatherall where Connell, who has more than 30 years experience as a planner, was national director of its planning team, and Martin, who has 10 years experience, was associate director. The team is currently looking at various proposals, including a major leisure scheme in Halifax for The Gregory Group, a large residential development for KeyLand in Harrogate and new and redevelopment opportunities for Netto across the UK.

>> City holds firm on rents Office rents in Leeds held firm in the first quarter of 2009 thanks partly to a shortage of new builds in central locations, a Knight Frank survey suggests. The agency’s latest regional office market presentation (ROMP) shows prime rents in Leeds in the first quarter staying at the same level they were in the last quarter of 2008 £27 per sq ft. This contrasts sharply with Manchester which has seen a 5% slide in prime rents to £28.50 per sq ft. Guy Cooke, a partner in Knight Frank’s Leeds

agency, warned: “There is now an over-supply in less established locations which will clearly put pressure on Grade A rents across the city.” Eamon Fox, an associate director at DTZ, said that while rents may have stabilised, take-up across the city in the same period has dramatically fallen. “We have seen a take-up of 50,000 sq ft in the last quarter,” he said, “when normally it would be something like 125,000 sq ft.” However he put his faith in clever refurbishments. “DTZ has recently >>

BUSINESS QUARTER |SUMMER 09

COMMERCIAL PROPERTY

SUMMER 09

There is now an over-supply in less established locations which will put pressure on Grade A rents Filling a need: Yorvale Business Park has units which are to let or for sale now

>> York scheme goes through Around 13,000 sq ft of new commercial space has been created in York city centre with the completion of a speculative industrial or warehousing scheme. Yorvale Investments’ £1.5m Yorvale Business Park, at Hazel Court, James Street, includes seven new units on land acquired from York City Council and is designed to meet a city centre shortage of modern small industrial and warehouse units. It was built by Brighouse-based Ashcroft Construction. Units at the scheme, which is built in two terraces, are for sale as well as for lease. They range from 1,520 sq ft to 2,520 sq ft with shared service access and parking for up to 16 vehicles. For larger businesses, Units 1 to 4 could be combined to provide a unit of up to 7,850 sq ft while Units 5 to 7 could provide space of up to 4,940 sq ft. The park adds to an established industrial and trade counter area of the city occupied by well-known businesses including Plumb Center, Pickfords Business Removals, Morrison’s, Howdens Joinery and Minster Coachworks. Yorvale Investments’ director, Jeremy Binnian, who lives in York, said: “We’ve always had faith in this scheme because of its specification and location. Small businesses are the backbone of the economy and Yorvale Business Park provides the facilities they need to prosper and remain competitive as things pick up over the coming months.” Matthew Tootell, a partner at Leeds-based property consultants Peter Lund & Partners said: “Yorvale has been forward thinking in progressing the scheme at a difficult time in the economic cycle, but we are receiving an encouraging level of enquiries and know that the eventual occupiers, and York city centre’s economy, will benefit as a result.”

>> purchased Crusader House on South Parade for Wilton Developments, identifying a need for well positioned, high quality accommodation within the city core,” he said. “Crusader House comprises 35,000 sq ft and, once refurbished, will see the delivery of a high-profile offering, central in location, with an ability to cater a vast range of office occupiers.” Jeff Pearey, head of the office agency team at Jones Lang LaSalle (JLL) in Leeds, said he was “beginning to see shafts of light”. JLL is joint

BUSINESS QUARTER | SUMMER 09

agent with DTZ on Wellington Place in Leeds, and, because work has slowed on much of MEPC’s development, some of the land has even been let out for corporate allotments. But Pearey is also advising on the second phase of development at Thorpe Park. “The first phase of 750,00 sq ft has clearly been delivered there,” he said. “We are now taking a masterplan approach on the second phase.” Recently JLL also advised Welcome to Yorkshire on its move to the Dry Sand Foundry building at the Round Foundry development in Leeds.

Spring Ram: right location leads to sale

>> Retail lives for another day Spring Ram Retail Park, part of a collection of retail parks just off junction 27 of the M62, has been sold for more than £8m. The park, whose tenants are Borders and Habitat, has been bought by Leeds and London Investment from NPI, part of the Pearl Group. The deal represents a net initial yield of 8.5%. There is a 15-year lease on the property, with an annual rental income of £726,000. The capital value is £367 per sq ft. Alex Munro, head of commercial agency development at the Leeds office of Knight Frank, advised Leeds and London Investments. He said: “This transaction, involving one of the M62’s best-known retail parks, proves that deals can be done in this challenging climate, if the product is right.” London-based agent Morgan Williams advised NPI. >>

A Winning Team

Peter Lund & Partners

www.peterlundpartners.com

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Peter Lund and Partners, Chartered Surveyors, Princes Exchange, Princes Square, Leeds LS1 4HY

COMMERCIAL PROPERTY Move: The R H Group team

>> Truck signing for Business Living International freight and logistics company R H Group is the latest to move into the £5m Evans Business Living Scheme in Leeds.

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The company’s Leeds office, which was formerly located at the Roadway Container Logistics Park in Stourton, has moved into a first floor, 4,100 sq ft space at the centre in Millshaw. With 16 offices around the UK, the company had been looking for larger premises. Managing director Ian Baxter said: “The Evans Business Living scheme is larger than the previous premises, has a far better image and is more in line with where we are in the market place.” The site comprises seven self-contained, two–storey units of between 1,300 sq ft and 6,100 sq ft in a landscaped and secure setting. Other occupiers of the Millshaw scheme, for

Aspire: All sold in three weeks, and now to include Skelwith Group HQ

>> Aspire all sold Developer the Skelwith Group has sold all the office units at its York city centre mixed use development Aspire. The company offered small units to investors as serviced offices with a guaranteed return and all 20 units were sold in less than three weeks. The units range from 300 sq ft to 800 sq ft with prices of £80,000 to £120,000 and a 10 per cent yield guaranteed for three years and then a return of 50 per cent of the office income. The ground floor of Aspire will be a Sainsbury’s Local store, the second and third floors will be office space and the top floor will comprise six apartments. Managing director Paul Ellis said: “The interest in the offices has been tremendous and it shows that, despite the current economic climate, good quality investments still catch the eye of the savvy investors. Skelwith is moving its headquarters to the development, which is due for completion in September this year.

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which the Leeds offices of property consultants King Sturge and Carter Towler are joint agents, include civil and structural engineers Mason Clark, and the Mortgage Trading Company. Evans Business Living also has two schemes in York.

Sustainable: The Green Building

>> Get your green credentials out Businesses have a new chance to underline their green credentials with the availability of accommodation at Britain’s most sustainable office building. Suites ranging from 2,000 sq ft up to 21,500 sq ft are available at the Green Building, Thorpe Park, Leeds, which has a BREEAM rating of ‘Excellent’. The building features wall tiles made from recycled mobile phones, grey water vacuum flush toilets like those in aircraft, and a vegetation roof. King Sturge in Leeds and Birmingham-based Cushman & Wakefield are joint letting agents. Jonathan Gale, partner in the King Sturge office agency team in Leeds, said: “This is a unique opportunity for businesses to obtain space in the greenest building in the UK, where 40% of structural materials are recycled, and meet their community and social responsibility targets.”

The company offered units to small investors, and all were sold in less than three weeks

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AS I SEE IT

SUMMER 09

CAPTURING THE IMAGINATION Carbon capture makes sense for our future climate, and for our future economy, says Yorkshire Forward chief executive Tom Riordan, whoâ&#x20AC;&#x2122;s happy to see his agency investing in it

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What would you think if I said that right now we at Yorkshire Forward are working on something that could make Yorkshire a world leader in a cutting edge form of technology within the next decade? You might say we’ve been there before – when Yorkshire, with its coal and textile industries, was the epicentre of the Industrial Revolution that made Britain a world leader. You might also add that we are still clearing up from such developments all these years later, with redundant buildings, scarred landscapes, and towns and villages that, perhaps because of their history, don’t always seem best located for 21st Century industry. There is also the ongoing pollution. And yet the technology we have in mind deals specifically with that, and at the same time could make many of these polluted areas the focus of attention and investment as the world and business grapples with climate change. Let me put it to you plainly. Two years ago, Yorkshire Forward formed a carbon capture and storage (CCS) partnership with some of the biggest players in the energy industry

located here, including Conoco Phillips and Powerfuel, to look at the possibilities of building a CO2 transport network across the region. CCS works by separating out the CO2 that is produced by burning fossil fuels into a highly concentrated, liquid-like state. This would then be piped along the south bank of the Humber and under the North Sea, where it could be injected back into redundant gas fields. We could be storing up to 60m tonnes of carbon a year. This technology is proven. It has been used in the USA, Canada, Norway and Algeria. This is not a new silver bullet piece of kit that we have invented that could go wrong. The only thing that is different about what we are proposing is that it is on a much bigger commercial scale than anything that has been done before, and has never been done on this scale underneath the sea. But geologically, there is no difference between such material being trapped under the sea and under the land. If you think about it, we are just putting gas back in where it was taken out.

AS I SEE IT

What’s more, both national and European governments are latching onto this idea. In January, the European Commission unveiled a shortlist of potential CCS demonstration projects which could win its financial backing. An initial project, which would see CCS demonstrated at a new power station Powerfuel is building at Hatfield, was one of them. We will find out before the end of this year whether we have been successful. But why, you may ask, is Yorkshire so suitable for this kind of technology? Well, you can look across Europe, possibly the world, and you probably won’t find anywhere else where there are clusters of big single-point sources of carbon – places like the Corus plant in Scunthorpe, which is the second biggest emitter of carbon in the UK after the Drax power station – in such close proximity to places where you can store it. A lot of the cost of carbon capture is the transportation. There are obvious benefits too: the hydrogen, for example, that is a by-product of the >>

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AS I SEE IT

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process. We could power a whole fleet of buses for a city the size of Sheffield just using hydrogen from the one plant at Hatfield. There are jobs too. Our study suggests this project could create 55,000 of them. Most will be in the construction phase, but that will last 15 years. And the study also suggests that the long-term operational benefit could be worth £31bn to the regional economy because of the many spin-offs that would follow. When you consider that the current scale of the regional economy is about £85bn, that’s a huge amount. Of course, the cost of such a scheme has always been a big question mark. We have been working on a cost model and currently suggest that our proposal could cost up to £4bn. It would be paid for by a carbon trading levy on carbon-intensive businesses. We believe you could generate £1bn of credits a year under the current EU trading scheme. So it’s a relatively quick return. It would be local businesses who would be paying this, of course. But if you are a carbon-intensive business you are currently looking at carbon trading systems that either are, or soon will be, mandatory and that some estimates say could cost you €60 euros per tonne by 2020. We believe our scheme can be viable at half that price, and so could have created a honeypot effect for the local area. Then look also at the alternatives. The 60m tonnes of carbon we will be storing a year represents 10 per

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cent of all UK output; something close to our Kyoto responsibilities. How else are we going to get to this point? Do you price people off the road, build very expensive nuclear power stations, invest more in renewables, or retrofit insulation en masse? All of these will have their place, but CCS now stacks very well against them. There will undoubtedly be some who will question why we should be so focused on this in the current recession. But just because we are, it doesn’t mean we are neglecting our duties to support business. We have shifted our budgets as much as we possibly can to help viable businesses on the ground stay trading, and to save key regeneration schemes. We are also focusing on big ticket items, like working with Lloyds Banking Group to make sure the impact of the merger with HBOS doesn’t have a hugely negative effect on the region. But it would be daft just to concentrate on the here and now. We have to look at when things are going to turn, and make sure we are best placed to take advantage of that. That’s why, for example, along with concentrating on carbon capture and renewables, we have invested in next generation broadband in South Yorkshire. There will also be a small minority who remain to be convinced about whether the predictions on climate change can be relied upon. Whatever the political imperatives, the world has accepted climate change as a reality. When the UN asked the scientific community about climate change action, the majority felt it was fundamental, and that action has to happen sooner rather than later. There will always be a risk that someone will come up

with an answer that solves the problem that isn’t carbon capture. If this did happen, it would actually be private sector judgements that had taken on the investment, not huge amounts of public funding. Yorkshire Forward’s total investment in this project to date is £400,000. We are acting as a facilitator, bringing the consortium together. They previously thought they were competitors, but they can now see that collaboration is important. And China alone is building two coal-fired power stations a week. Whatever the risk, the greater imperative is that we can show the world that you can deal with climate change and still have an energy industry, as we do in Yorkshire. This is what really excites me. There has been criticism in the past that regional development agencies have not focused sufficiently on their strengths and what will give them comparative advantage. This is a prime example of doing that. No one else has a cluster like we do. No one else has the engineering and energy skills, or the topography with proximity to the redundant gas fields. And we are also the only potential project in the UK bidding for money where the project at the heart of it all – Hatfield – has already invested in the preparatory work. That’s why I am happy to say that we can initiate a CCS network in the region by 2014. Most people elsewhere in Europe don’t see this happening on a commercial scale before 2020, so I can’t emphasise enough how this is truly world leading. If this comes off, it will be the most value-for-money piece of intervention any Government agency has done in Yorkshire for the past 30 years. ■ Tom Riordan was speaking to Peter Baber

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NO BOATS TO CHINA Paul Crossley, the man behind a most unusual British manufacturing success story, tells Peter Baber why he will never outsource â&#x20AC;&#x201C; and why he likes to be right first time >>

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ENTREPRENEUR

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ENTREPRENEUR

Oh, Sir Alan Sugar. You may be Gordon Brown’s latest business friend, you may have kept us glued to our screens every Wednesday night this spring to find out who you were next going to fire, but there is one Yorkshire entrepreneur, who was in the running this year to be an Ernst & Young Entrepreneur of the Year, who thinks you have it wrong. And this is someone who knows his stuff. The company he runs grew by at least 35 per cent over a three-year period, made it into the Sunday Times Fast Track 100 (‘we were number 99, but I don’t care,’ he says) and even this year stands to make £2m on a £10m turnover; down from £3.8m on £13m at the height of the boom. It’s exporting too – to Ireland, Italy, Germany, and the Czech Republic. All this from a manufacturer that produces entirely in the UK, and sells pretty much a single product – shower trays. Such companies were long thought to have gone to the wall. Paul Crossley and Just Trays shows that they haven’t. But what did he take exception to from the great ‘Surallan?’ It’s certainly worth hearing, because it informs much of the way Crossley

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My competitors to this day still can’t work out how we’ve managed to become market leader because we’ve always been more expensive. It’s quite sad that I might have to explain it to them runs his business. In the final episode of the latest Apprentice series, Sugar gave the coveted job to Yasmina Siadatan, despite the fact that everyone hated the chocolates she had produced. Sugar said actual product quality didn’t matter at a launch, because you could get it right later. What mattered, he said, was the research and presentation. This is an anathema to Crossley. “I have seen so many disasters,” he says. “I have been handed products that were knee-jerk reactions, or something where even the producer thought, ‘It’s not right, but we’ll launch it anyway’. Why? One man I met had a philosophy that if you had six lumps of clay and threw them against the wall, if three slid

down and three stayed up you would still have three successes. Yes you would, but how bad were the other three? And what would be the impact on your business? No – when you launch something, do it in a measured way, be entrepreneurial, be inventive, but just make sure you get it right first time.” Crossley is proud to say that Just Trays has never had to recall any product it has launched, which might explain why, in an industry not always known for product quality, it went from being fourth largest when Crossley joined nine years ago to market leader in four years, currently with a 28 per cent market share and making 70,000 more shower trays a year than its nearest rival.

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Expertise: Just Trays’ Leeds factory is making excellent products at the right price, without having to out source to outfits in China or India He is fond of pronouncements – you get the feeling they are what motivates him. “Never launch anything that doesn’t solve someone else’s problem,” he says. “If you do, the only thing you have to work with is price. Two of my competitors to this day can’t work out how we’ve managed to become market leader because we’ve always been more expensive. I have always felt it is quite sad that one day I might have to explain it to them.” Certainly, the products Just Trays has most recently launched have been focused on finding solutions. Take the new lightweight Breeze range of shower trays, for example, designed to be lifted and carried by just one worker. “Most building sites don’t have a YTS person any more, but when they need to get a conventional tray upstairs inside a house they need an extra resource because that’s what health and safety says,” he says. “This product overcomes that problem.” Apparently so, as within two weeks of launch, Breeze was specified by two national housebuilders. Another innovation brought in by Crossley, in consultation with Just Trays’ then-directors Nicholas Sharp and Andrew Hirst, really

propelled the company into the big time. “The way we made a shower tray then was quite traditional,” he says. “You had a mould, sprayed it with a gel coat, and then you filled it full of stone resin. But you never knew whether it was right until it came out of the mould, and then the full production cost was there. We had 15 per cent returns, so I thought, why not create an acrylic sheet where we can check the gel mould, and then put the stone in?” This attention to the detail of processes is something that marks Crossley out from many other Yorkshire entrepreneurs. He is not a salesperson who stumbled into manufacturing almost by accident. Nor is he from Yorkshire. Now aged 43, he was born and brought up in Chipping Sodbury in Gloucestershire, and says he only got into engineering because, with big employers like BAE and Rolls Royce nearby, that was what everyone else at school wanted to do. He spent many years in the 1980s as engineering manager for an American-owned tool manufacturer and distributor and only got into selling when his boss asked him to do a presentation to the European board on why

they should use up spare capacity at their UK factory by manufacturing a product they were then sourcing from a German manufacturer. “I got a bug for selling,” he says. “I enjoyed the interaction and not covering people on night shifts. But my wife and mum and dad weren’t sure. ‘You have an engineering degree,’ they said. ‘What are you doing?’” Fortunately, three years of being salesperson of the year at his next company – Hunting Specialised Paint – convinced them otherwise. Crossley says he was lucky to be given Devon and Cornwall as a sales area, because everyone there wanted the Hammerite anti-corrosion paint he was selling. He was also lucky to be given a grounding in selling that he says was “almost like Rank Xerox” in its intensity. That stood him in good stead for his next venture – helping to establish the bathroom division of Bob Murray’s Spring Ram empire. “I went from being area sales manager to key account manager and also helped build up selling by distribution,” he says. “That’s a real skill, because it’s back selling and motivating people to sell on your behalf. If you get it >>

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ENTREPRENEUR right it’s phenomenally successful because your overheads are lower. But you have to motivate people.” Sadly of course Spring Ram eventually – in Crossley’s words – “spontaneously combusted”. But even though he says his school careers adviser would have died if he knew he’d ended up selling bathrooms for a living, he got the bathroom bug. After a short spell helping a friend build up sales in his flues and chimneys business, Crossley eventually found himself invited to a bathroom industry golf day, where on the ‘19th hole’ he met Sharp, who had never heard of him. “But he asked my advice on something and I said, ‘that’s what you need to do,’ and it worked,” he says. And so came a job offer. “He wanted someone to run the sales side,” says Crossley. “They had built the company up to having a £4m turnover, but it was only growing gradually. There was no proper national distribution network, and no route to the market.” Negotiations over him joining took six months, and he realised that this time, unlike when he worked for Spring Ram, he would have to make the move to Yorkshire. “Having driven for seven to eight years from Gloucestershire to Yorkshire,” he says, “I understood that to come in as sales and marketing director you would have to be here at least two days a week, to understand people and look at new products.” He has certainly been understanding. Along with devising the revolutionary new method for manufacturing the trays themselves, in the intervening nine years Crossley has also reshaped the customer base – and the way Just Trays delivered. “I had worked out that if you send a tray to Aberdeen and the next day need one in Redruth, normally it isn’t a good idea for the manufacturer to be involved in distributing that,” he says. “A distributor can do it, and he can add greater value to the product. He can sell Armitage Shanks with my tray, and a whole set of tiles. It’s a lot more cost effective. So we went into every account and said, we’re changing things. It was a fine balance, because you don’t want to alienate the people who get you to where you are. “We also had seven lorries going up and down

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That’s the problem with China and India: do you show them how to make things, knowing they can bite you on the backside?

the motorways. That’s a great bit of PR, but what’s that worth? So we outsourced and we don’t now have trucks coming back from Inverness with nothing on them. Let’s concentrate on what we’re good at.” When Nicholas Sharp and then Andrew Hirst and his wife Val opted to move on, Crossley didn’t have much trouble getting private equity firm Gresham to back him in a management buyout in 2006. Especially when the company managed to achieve in its first year with private equity what it had originally agreed to achieve in three. Crossley is now asked down to London to present to Gresham’s own investors, as an example of what good use their money is being put to. Some of them might be surprised to discover that Just Trays products, even today, are entirely manufactured out of its factory in Farnley, near Leeds, but Crossley himself is committed to it. His reasons for not following the route of so many other UK manufacturers and outsourcing to India or China boil down to three things: cost, cashflow, and the small matter of security. “I have been to China - twice,” he says. “I

managed to get into one factory and took a picture of what was going on with my mobile phone and sent it to the chief executive of a rival company I know who uses that factory. He texted me back, ‘What are you doing in my plant?’ That’s the problem with China and India: do you show them how they can make things to ISO standards, knowing that they can really bite you on the backside, or do you just outsource, buy it cheap, stack it up, make hay while the sun shines? I know one company that spent £500,000 introducing a complex product into a Chinese factory and found that they were making it Monday, Tuesday and Wednesday for them under licence, and then on Thursday and Friday they were still making it, but putting in a blank box and selling it to others. To overcome that, you need to send someone out to be based there, but that costs a huge amount of money.” Crossley says the cashflow problem is also quite straightforward. “You tend to pay for everything at the dockside,” he says. “It takes 12 weeks to come, then most people like 30-day payment terms, then they quibble, so you’re not going to get paid for several months.” And that’s even before you start to worry about currency fluctuations, of course. “One company went out when it was $1.90 to a pound,” he says, “and the finance director said you had to prepare for the worst, so they prepared for $1.48. It went down to $1.32. That is totally outside their control. With outsourcing, what you end up being is just an agent or a distributor.” But what puts him off most of all is the basic cost. Many people, he says, don’t realise just what this will be in the long run. “It costs £9 to get a tray here from China in shipping,” he says, “and in transportation when it gets to the UK. People mistakenly think Felixstowe is the end of the journey. “Then it turns up, and where it was loaded labour is cheap, so it’s all been handballed. So I’ve got three guys unloading it, and that’s another cost.” Instead, having found out how much cheaper his trays might actually be produced in China, Crossley tries to produce them for that cost in the UK, largely by investing significantly in more efficient machinery. Some £3.5m has been invested in the plant since Gresham

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ENTREPRENEUR

Efficient: At Just Trays’ plant, revolutionary manufacturing and lean processes ensure profitability and the production of quality goods came on board. The production line for the new Breeze tray cost £500,000. “But for £500,000, one guy and a robot we can make 30,000 of these a year,” he says. He admits such efficiency doesn’t help in the current recession, because it becomes so much harder to find ways of getting leaner still. Crossley had to cut 20 per cent of the workforce and cancel the nightshift – something that was particularly galling for him because he himself had threatened Sharp with his own resignation if they didn’t introduce the shift to make the company grow faster. But then this recession, he says, is like no other. “Not only is housebuilding down,” he says, “but for the first time ever, home improvements are down. In the last two recessions people didn’t move, but they did spend on what they had.” Nor does he think it’s all over yet. He believes there are still at least two similar businesses out there which will go bust before the worst is over. But Just Trays itself, he says, is resilient. Crossley says his chairman, Ian Stuart from Aqualisa – recommended to him by Gresham,

but not foisted on him - was candid about his performance. “He said, ‘Paul you were two weeks later than everyone else spotting that there was a problem, but you dealt with it in four months less time than anyone else’,” says Crossley. “We did the whole consultancy over redundancy in three weeks. You never want death by a thousand cuts.” He is also glad that his insistence on his whole operation staying UK-based is now paying off. “With other companies,” he says, “you might have had one guy sitting in central Europe ordering a container every week. 80 per cent of that container was the same order, and the remaining 20 per cent was his job – the lower volume but the higher value. He can now no longer fill that container with that 80 per cent. So how does he get the 20 per cent? That costs him a huge amount more.” UK-based, then, but not UK-bound. As a container from the Czech Republic arrives at the factory for a pick-up, Crossley tells me about his latest export venture to the United Arab Emirates. It’s great to hear that all this is being achieved from right here in Leeds. n

Lee & Priestley’s specialist Entrepreneur Team works with clients as a strategic partner, offering a unique blend of legal, business and entrepreneurial expertise. Lee & Priestley acts for businesses across a broad range of industries and has a particular reputation for entrepreneurial expertise in the new media, media, internet, technology, creative, leisure, entertainment and healthcare sectors.

Jonathan Oxley, Managing Partner, Lee & Priestley LLP Tel :0845 129 300 10-12 East Parade, Leeds, LS1 2AJ www.leepriestley.com

BUSINESS QUARTER |SUMMER 09

INSIGHT

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Plane speaking Jet2 is never going to be a fully-fledged business airline, its chief executive tells Peter Baber. But that doesn’t stop it being a business success This magazine is all about success, so as we launch in Yorkshire towards the end of one decade, it seems appropriate to think back on some of the region’s business successes of the past decade. If you do, it’s not long before the name Jet2 comes to mind. In a survey last year, the airline was second only to Yorkshire Forward in terms of Yorkshire brand names that had come to prominence in the past decade. I certainly remember the excitement back in 2003 when word first got out that Yorkshire was going to have its very own version of Easyjet or Ryanair. The airline was - still is - part of the Dart Group, which was based in Bournemouth. But it had specifically targeted Leeds Bradford because at the time it hadn’t been well serviced by low-cost carriers. What’s remarkable is how much the airline has grown since then. From two aeroplanes and six routes in 2003, it now flies to 43 destinations and is adding more all the time; Corfu the latest to be in its sights. The airline, now with a turnover approaching £320m, has also expanded to other airports, though Leeds-Bradford remains its core, with12 of its aircraft based at the airport, compared with three in Edinburgh, two each at Newcastle, Blackpool and Belfast and six at Manchester, which means that for once Leeds gets one over on its supposedly mightier rival across the Pennines. Dart’s headquarters have moved north to Leeds too - and when we say moved we do really mean moved. A group of prefab offices that had previously nestled in Teynham - one of Jet2’s sister company Fowler Welch Coolchain’s depots - was uprooted and moved to a site just off the runway at the airport. Operations for an organisation that now employs up to 2,700 people at the height of

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the summer are now run from here. So it’s not surprising that there are people in the city who are setting great store in the airline and how it might turn what was once a sleepy little airport into a major business destination. Members of the Leeds financial community, for example, didn’t take long to arrange a trade mission to Dusseldorf as soon as Jet2 started flying there. Such hopes, however, are likely to be somewhat deflated when you get to meet Philip Meeson, the former aerobatic pilot sponsored by Marlboro cigarettes, the chief executive who founded Channel Express, which eventually became Dart and thus Jet2, way back in 1983. Jet2 is first and foremost, he says, an airline for the leisure traveller. “We are building a leisure airline oriented to people’s holiday destinations,” he says, adding that Dusseldorf is probably the only primarily business destination the airline flies to. “Although most of our city routes probably have about between 30 or 40 per cent business on them,” he adds. Such routes include Paris, to which Jet2 flies twice daily, as well as Amsterdam, Budapest, Milan and Rome. But that is why Jet2 will not, for example, be following the example of its rival Flybe, which in June reopened the route between Leeds Bradford and Gatwick with a twice-daily service. Jet2 used to fly to Gatwick from

Manchester and from Leeds Bradford to London, says Meeson, but you can’t compete with the trains, whoever happens to be running them. “I am not saying they are on a hiding to nothing,” he says, “but if you’re in London or in the north of London, the service from St Pancras is fantastic. The size of aircraft we’re operating need to have the volume of leisure passengers. Business passengers want frequency, so they can jump on an earlier plane if a meeting finishes early. Smaller planes can deliver that frequency, but we’re really in a volume business, which means leisure. We’re targeting leisure routes on which we welcome business people.” It’s also why he dismisses any comparison with Michael O’Leary’s Ryanair, and in particular with the latter’s ambitions to take over a national airline. “He is running a point-topoint city airline,” he says. “We’re not.” Dart Group as a whole is set to make a profit of £28m this year, and Jet2’s load factor – a key measure of success in the airline industry – having started at around 79 per cent, now stands at 87 per cent. “On some routes, it’s 95 per cent,” says Meeson. In contrast, in June this year British Airways’ load factor was 75.1 per cent, a drop of 1.0 per cent on last year. For the past two years, Jet2 has also been building up its own holidays business, Jet2 Holidays. The amount it contributes to the

We’re able to get from Leeds to New York or Sharm-El-Sheikh non-stop, and are very efficient with low emissions

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business, Meeson says, “is quite small at the moment – about 70,000 packages this year, but we’re aiming to build that over the next few years,” he adds. “We’ve spent £8m on marketing the holidays, with a marketing team of 13 people, plus a little bit on PR.” That, he says, will expand the choice for Jet2 customers. They can go for what he calls a ‘seat-only product’ – in other words, a flight – or choose from one of the hotels mentioned on the company’s website, or go for the full holiday package. The airline is also unique among the low-cost sector in the UK in using Boeing 757s, which carry around 230 passengers compared with the 145 carried by the more conventional Boeing 737-300s. Meeson is clearly impressed with these beasts, and the airline is buying three more of them this year. “They have tremendous operational performance,” he says, “being able to get from Leeds to New York or Sharm-El-Sheikh non-stop, and are very efficient, with very low emissions. None of the other low-cost airlines use them. I suppose it’s because they are quite large, and you have to have a catchment area able to support them. But we always believed in the Leeds and Manchester catchment area.” So how then, is Jet2 managing to do so well? There were all sorts of rumours in the press over the winter that it was going to be a victim of what were then shocking oil price hikes. The price of oil has since come down, and is now on the way up again, and a key question in the airline industry is to what extent you have hedged the price of oil. Meeson won’t talk about such issues because of their sensitivity, except to say: “We do hedge, but we are careful.” He thinks Jet2’s success lies in careful planning. “We carefully tailor the frequencies of our routes to passenger demand,” he says. “For example, we fly to Sharm-El-Sheikh, but only once a week from Leeds Bradford and once a week from Manchester. We fly twice a week to Cyprus. We’re careful with our frequencies, and our destinations. Expansion has been a constant problem in the airline industry. We have expanded carefully and are committed to expanding, but at a sustainable rate.” Meeson is similarly protective about the airline’s brand. The tagline, ‘Friendly low >>

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INSIGHT

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fares’ appears as often on the company’s aircraft as the Yorkshire rose. And yes, it does charge for hold baggage. “If people are just going to carry a handbag, we welcome that and don’t need to charge them,” he says. “But if they are going to check it in, there is a cost in that, and why should people who are not checking baggage in pay for it? But we welcome both. We are a friendly airline.” It’s why he will not be following in the most talked-about new development in the low-cost sector this spring – Michael O’Leary’s plan to start charging Ryanair passengers for using the toilet. “Certainly, we have no intention of charging people for using loos,” says Meeson. “I don’t actually believe Ryanair will either. But what he does, he does. We know where we are. The whole company is out to make the start of the holiday a real pleasure for people.” That includes making sure you pick them up and drop them off at a friendly time. “If you are going to Cyprus, we take off at half past eight or nine in the morning, not three in the morning,” he says. “And we come back at a decent time. People don’t want to be dumped at some airport at 3am. That’s part of our success. It doesn’t really limit us. Maybe we don’t get quite as much out of our aeroplanes as some other people do, but it’s a great way to build our business and give people a great experience.” Of course, no matter how well you’re doing, it always helps to be part of a larger organisation. Jet2’s sister company, Fowler Welch Coolchain, can also trace its roots back to Channel Express, the company Meeson founded in 1983. That company flew fresh flowers from the Channel Islands to Bournemouth Airport. The airside part of the business grew first with charter flights: Dart still runs a joint venture with Titan airways which runs delivery flights for Royal Mail, and Jet2 itself ran 1,100 charter flights last year. It was rumoured to be the airline behind Take That’s comeback tour. Meanwhile, the truckside of the business went on to become what is now the largest supplier of temperature-controlled produce to Tesco. The company has three depots – a headquarters in Spalding and a site in Washington, Tyne & Wear, in addition to the site in Teynham from which the Leeds Bradford

BUSINESS QUARTER | SUMMER 09

Passengers numbers are static here ... The airport doesn’t need extra facilities, and new facilities mean extra cost

office originated. Both Spalding and Teynham are legacy sites, because unlike Jet2 the £125m company has grown by acquisition. Meeson, who still spends around two days a week on the Fowler Welch Coolchain business, says there are obvious advantages to running two companies in this way. “Although Jet2’s passenger numbers are very good this summer,” he says, “and we are going to be slightly ahead of predictions, there will still be people staying at home this summer, and that is good for Fowler Welch Coolchain, because people will be eating salads and having barbecues. It will have a very good year.” Meeson says the friendliness he sees in Jet2 also explains why it went for airports like Leeds Bradford and Blackpool. “We love these small local airports, where you can park reasonably conveniently, and ten minutes after you check in you can be sitting in the departure lounge and just walk out to the aeroplane,” he says. For that reason he is not bothered about Leeds Bradford’s new owner’s expansion plans being

put on hold. “Passenger numbers are static here,” he says. “and the growth has been our growth. The airport doesn’t need new facilities, and new facilities mean extra cost.” But every airline will tell you, at least in public, that along with trying to convince as many Yorkshire folk as possible to take a short break in Europe, they are equally committed to enticing the Continentals to come and experience our delights. Is Jet2 as committed to inbound tourism? Meeson insists it is, and says his company is an enthusiastic supporter of Welcome to Yorkshire, the newly named Yorkshire Tourist Board, led by Gary Verity, who he says is doing ‘a great job’. But he is a little more vague about what his own role is within Welcome to Yorkshire. And when I ask which is harder persuading Yorkshire folk to go to Spain or persuading Spaniards to come to Yorkshire, he stares at me and says: “Did you do any O-Levels? What do you think?” Nevertheless, he wheels in one of his marketing team leaders to tell me exactly how

SUMMER 09

much they are supporting promoting Yorkshire overseas. They run joint campaigns with Welcome to Yorkshire, particularly at the start of the summer season, and have discovered through research that Dusseldorf is their most popular starting-off point for inbound tourism, with on average 35 per cent of the flight taken up with that. That’s followed by Amsterdam with 30 per cent, and Paris with 20. per cent. Spain is still some way behind. Then Meeson jumps in with an explanation for some of this - onward connections from the airport. “Once you get here, the station is a 20-minute trek, and the road is crowded,” he says. “Foreigners coming here must feel lost when they get to this airport.” He is much more keen, as are most of the airline industry these days, to tell me about the other way his company is being friendly – by trying to limit his aircrafts’ carbon footprint.

He even rings me the next day to tell me more about it, insisting it is not just a problem for the aviation industry. “Airliners only produce two per cent of the CO2 in the world,” he says, “but we have to be environmentally aware. We have 149 different points that we have been looking at for a critical view of how to reduce our emissions. Fuel efficiency is better for us as an airline and for the planet, but it comes down to planning.” This is the one area where he does appear to get heated, suggesting that there has in the past been a problem with Manchester Airport air traffic control – which controls much of the air space around Leeds Bradford – allowing too many aeroplanes to circle for too long. So the airline has been in discussions with them about how to improve the situation. Other action it is taking on its own includes fitting winglets to its 757s – at a cost of $1m

INSIGHT

per aeroplane. “That gives a 5 per cent fuel saving,” he says. Unlike some airlines, Jet2 has a policy of not turning on the auxiliary power unit which powers the internal workings of the aeroplane when it is stationery at a gate. Instead, it relies on each airport’s own power supply. But perhaps the most striking change comes in flying itself. “We are looking at flying at the most fuel-efficient altitude and the most fuel-efficient speed,” he says, “so we have actually slowed our top speeds down by 8 per cent.” That, he says, shouldn’t be enough for most people to notice. But it’s a thought that, if you ever feel you are running late on a Jet2 plane - an experience which should be a rarity, as it has one of the best punctuality records in the low cost sector - you can relax in the knowledge that there may be a very green reason for your delay. n

Where can I ﬁnd help generating new ideas for my business?

At Business Link we understand that the difficult economic climate means we’re living in uncertain times. That’s why, whether you’re struggling with financial concerns, trying to cope with slow sales, dealing with staffing issues or maybe thinking of starting up on your own, you can get FREE advice at Business Link.

BUSINESS QUARTER |SUMMER 09

BUSINESS LUNCH

SUMMER 09

ALL PART OF THE SERVICE

Whether it’s cars, menswear, or a doctor’s surgery, Richard Jackson tells Peter Baber that the key to a successful business comes down to one thing and one thing only – the quality of service

The Hotel du Vin in Harrogate is not the most ostentatious venue, but everyone in town knows what to expect once you get inside the four Georgian terraces that have been knocked together to make the hotel. There’s the décor that makes the place somewhere you would want to stay, rather than just spend a night. There is, as ever, an excellent wine list prepared by an in-house sommelier, offering not just your standard Merlots and Riojas but also a particularly memorable (for this writer) sparkling rose from an English – yes, English – vineyard. There is also a formidable menu to

BUSINESS QUARTER | SUMMER 09

match, and patrons can relax in the knowledge that, once inside, they will receive service that’s understated, and only there when you want it. At least, conventional patrons can. When, however, you have run and successfully sold on two customer-facing businesses, and now at the age of 58 are busy building up your third, you might pay a little more attention to what’s going on. Richard Jackson, our interviewee today, does. As our waiter retreats after leaving a cup of latte on the table, he is more than ready to pass comment. “That fellow wouldn’t have a job with me. >>

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BUSINESS LUNCH

BUSINESS QUARTER |SUMMER 09

BUSINESS LUNCH Why put the coffee there,” he mutters, moving the cup across to the other side of the table, “when it’s for someone over there?” I point out that there are sound reasons for doing so. The latte in question is for our hard-working photographer, who is still taking up most of the other side of the table with the kind of paraphernalia that would probably not take too kindly to a sudden splash of coffee. Anyway, the cup would get in the way of the photo. He concedes I have a point, but this gets him quickly on to his pet subject as he tucks into a fine rainbow trout. “My whole focus is the customer,” he says. I had guessed this – five minutes earlier he had opened the front door of the hotel and welcomed me, coming in slightly late thanks to the Harrogate lunchtime traffic, as if he were the hotel manager. Putting the customer first, he says, is the essential ingredient to making a great business, whatever line you’re in. It applied when he was helping to run the family menswear business Centaur, he says, just as much as it did when he was expanding Nidd Vale Motors or building up Mercedes Benz of North Yorkshire. It also applies now in the new medical centre business he is running. Great customer service is what makes the difference, whoever the customer is. “The same customer skills apply across the board,” he says. “If you’re going in to buy a Vauxhall Corsa, to you it’s as important as if you were someone buying a £100,000 Mercedes. In fact, it’s probably more important. In Centaur, we were the biggest suppliers of made-to-measure suits, supplying all the independent retailers right across the

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country. We ran a fantastic service: a made-to-measure suit in 14 days, and a seven-day express service. And if you were a shopkeeper in Huddersfield and you had a customer with a wedding on Saturday and the suit hadn’t arrived, you could ring me and I would look on the shop floor, and if we needed to deliver it Red Star to Huddersfield station the next morning, we would do it.” He is someone who can back up what he says. Centaur proved an attractive enough proposition for mighty William Baird to snap it up in 1988. And for a time before he sold it on in 2006, Mercedes Benz of North Yorkshire was the fastest-growing company in the region. To be fair, business has been in Jackson’s blood almost since the year dot. Centaur was a family-owned business. “I used to go round the cloth mills with my father from the age of seven,” he says. “Before my brother John got married, there was no conversation over dinner that wasn’t to do with business.” He did initially have a yearning to go to university when he left school to study textile engineering. “But my father had a heart attack in my last term at school,” he says, “so there was immense pressure to go straight into the business and work with my brother John, who was running it at the time.” Elder brother John (who has an impressive business career himself, having been president of the Leeds Chamber of Commerce, and a big noise in the Leeds Development Corporation) is some 17 years older than Richard, and the eldest in a line of what were five siblings, of which Richard is the youngest. “I might not have come along, had the one in

I thought, ‘how do I achieve anything in my own right if I just carry on running the family business?’ I very nearly left to go and do accountancy

BUSINESS QUARTER | SUMMER 09

the middle not passed away,” he says. John could, of course, have put pressure on the older siblings to join the business - on their sister, for example, or their middle brother, who instead went into antiquarian bookdealing. But no, he chose Richard to be sales director and urged him to stay on in the business even when Richard had plenty of other diversions, and when John himself was taking something of a back seat. “We grew the business very quickly,” says Richard. “We had a three-year earn-out after we sold to Baird, but John wanted me to stay because, he said, ‘if something happens to me, at least you are still here to protect the family’s interest’.” By that time, Richard had proved himself, not just in the family business, but externally too. In fact, once he had started work, he says, it didn’t take him long to want to do something more. “I regretted not going to university and having a bit of fun like all my pals,” he says. “I also thought, ‘How do I achieve anything in my own right if I just carry on running the family business?’ I very nearly left to go and do accountancy.” Many sons of family businesses have similar concerns and yet do nothing, happy to keep taking the money. But Jackson was quick to spot an opening, thanks in part to a new hobby he had taken up: car rallying. “I thought maybe I could buy and sell a few cars,” he says. “I had been rallying for about six years. I did that from home from 1976, but then the business grew and it became an embarrassment, what with people coming to the house all the time, including evenings and weekends.” So in 1979 he bought what he says was then, ‘a very sleepy little Opel dealership in Knaresborough called Nidd Vale Motors’. It is hard to imagine these days, considering how often you see the name Nidd Vale on the car in front of you in a Yorkshire traffic jam, but at the time Nidd Vale was selling about 80 new and used cars a year. By the time Jackson sold it to management in 2003, that number had grown to at least 6,000. And, even more remarkably, for 12 of those intervening years Jackson was in effect doing two separate jobs. “I said to John I would probably need to leave,” he says. “He said:

SUMMER 09

BUSINESS LUNCH

Forthright: Richard Jackson’s strongly customer-oriented ethos pervades his businesses ‘Why don’t you do both jobs?’ So I did. I used to go into the Centaur factory at 8am and we would have our director’s post meeting and discuss all the stuff that helps you sense what is going on. Then I would speak to whatever customer I needed to speak to, deal with all the sales reps I needed to, and then I would scoot over to Knaresborough to Nidd Vale. If I needed to come back, I did. I did have a ‘Centaur first, car thing later’ attitude. I regarded that mail meeting as sacrosanct.” Few business people would have the stomach

for such a life, or if they did, they would probably leave one business ticking over. But Centaur grew and so did Nidd Vale – although Jackson admits that the sale of Centaur in 1991 coincided with Nidd Vale moving to a much surer footing by taking over a former bus depot in Westmoreland Street in Harrogate. That allowed it to have a 70-car showroom with bigger workshops, and to go multi-franchise. Nevertheless, customer service still came to the fore under Jackson’s ownership. He rigorously

introduced a customer contact system that few in the garage business at the time would have bothered with. “I used to make sure the sales team followed all our customers up, and I checked them,” he says. “I looked at their sheets every week to see all the calls they had made to my customers. It couldn’t be just platitudes. If they just said, ‘everything’s OK’, that wasn’t acceptable. We needed to know how many miles the customer had done, whether we had made an offer to them, their email addresss and so on, so there was a proper line of communication. I checked everything every week, and every customer would be looked at at least once a year. It was pretty sophisticated when I started in 1979, but they still do it today and have massive repeat business.” And Jackson should know. Since the buyout in 2003, when he retained a small interest in the business, a second management buyout in 2007 saw him return as a non-executive director. Jackson insists this was not because the business has gone awry in his absence. It was just that the managing director in the intervening period, “didn’t really want non-executives around him,” he says, adding, “the current team are happy to use the grey hair and experience.” The possibility of staying in touch with the business was one of the reasons he went for an MBO, he says. “We still had a bit of control,” he says, “and it wasn’t selling out to a big Plc.” At the time of the first buyout, he said he wanted to pursue other options – both the Mercedes business he had been building up since 1998, and other specialist makes of car. The latter never came to anything, but he managed to beat Mercedes at retailing. Eighteen months after he took on the Mercedes franchise, Mercedes terminated contracts with all 130 UK dealers, and having taken back under their own control sales areas in London, Birmingham and Manchester, invited just 50 dealers – of whom Mercedes Benz of North Yorkshire was one – to re-apply for the remaining areas. To most people that would look like offering crumbs off a table, but Jackson, who had started off selling Mercedes in out-of-the-way Grimsby, still managed to beat Mercedes in total sales. >>

BUSINESS QUARTER |SUMMER 09

BUSINESS LUNCH He is not surprised by this. “A hands-on owner-operator will always do better than a manufacturer’s employee,” he says. He eventually sold Mercedes Benz on to Rybrook - a medium-sized but still privately owned dealership - for whom he is regional chairman. Support for the little guy is all very well, however, but the fact remains that Nidd Vale is a mass market operator, and a Vauxhall dealer to boot. Jackson admits it has been “slightly concerning”, given the current situation with Vauxhall’s American owner General Motors. “GM in America have been shaking the shilling forever,” he says. “I have been surprised they haven’t gone into Chapter 11 the whole time I have been a franchisee. Their cost base has been too high. But GM Europe, on the other hand, have been building fantastically at quite good prices. “The manufacturing units, like the one at Ellesmere Port, have been very good. I hope the UK business does survive, because it deserves to. The question is, will this Government throw enough money at it compared to what they are prepared to do in Germany and Belgium?” Jackson clearly does not have a great deal of faith in big government. He mocks the Government’s car scrappage scheme, for example, saying it is a more confusing, watered-down version of a similar plan in Germany that is really only going to benefit cheap Far Eastern car manufacturers, because those are the marques that appeal to people who own 10-year-old bangers. So it is perhaps surprising to hear about his latest business venture, bidding to open so-called ‘Darzi centres’ – open-all-hours medical centres first proposed by health minister Lord Darzi – all over the UK. Jackson set up investment vehicle Yorkshire Ventures with former Arthur Anderson senior partner Mike Beverley and Ross Pullan – a scion of the Pullan family that owns the construction business - with a view to making deals in property. But within a few years they had taken a 50 per cent stake in Lincoln-based United Health, which specialises in running care homes and medical centres. A recent opening was a new medical centre in The Light shopping centre in Leeds, a medical facility which is something of a rarity in the

BUSINESS QUARTER | SUMMER 09

SUMMER 09

A place to linger: Hotel du Vin, Prospect Place, Harrogate provided a superb business lunch and an excellent wine list when Richard Jackson and Peter Baber visited. For information, see www.hotelduvin.co.uk or contact 01423 856 800

A hands-on owner-operator will always do better than a manufacturer’s employee

city centre. “From a standing start 18 months ago, we now have 4,500 patients,” says Jackson. But does he not find dealing with a huge organisation like the NHS frustrating? Surely its values are not always as customercentred as his? Jackson shrugs off the suggestion. “Doctors got a fantastic deal when they got fewer hours and more money and didn’t have to work weekends any more,” he says. “Then all of a sudden patients want more hours to see a doctor at their convenience, not the doctor’s. Some doctors may have battened down the hatches, but they have now woken up to the fact that they may lose patients and income.” So, he has at least three businesses on the go, in two different sectors, and that’s not forgetting the charity work. Jackson is probably most widely known for his work with the Prince’s Trust. He has just agreed to a third term as chairman of the Trust’s Yorkshire & Humber development forum. This is something he has been able to mould himself, because before he was recruited, fundraising for the Trust had been organised entirely out of its London headquarters. “I had a blank sheet of paper,” he says. “But we need to raise £2.5m each year in the region, even if £1.4m of that comes from Yorkshire Forward and public authorities.” He is not averse to raising a good part of that money himself, having run six marathons for charity, with his best time a very commendable 3 hours 43 minutes, and the largest amount he has raised £108,000. But how does he find the time? And how does he relax? “You mean before my wife started making me go on more holidays?” he quips. I happen to know from a previous conversation that a former wife was not so patient, however. Jackson says he is helped by having a driver, so he can get work done when he is on the move. “But I like being busy,” he says. “It suits me. If I did less work I would do more charity stuff. It’s a nice way of putting something back. If you have had a fortunate life, which I regard I have, that’s important.” A fortunate life, yes, but a life that shows you can still build on good fortune when you are so skilled an operator. n

MOFFATT ON WINE

SUMMER 09

SPORTING BLEND BUSINESS QUARTER | SUMMER 09

SUMMER 09

MOFFATT ON WINE

Iain Moffatt, Senior Partner at KPMG in Leeds, savours a couple of Burgundies during a relaxed summer weekend at his home in North Yorkshire Being asked to take home a couple of bottles of wine on a Friday afternoon and ensure they were drunk by Sunday night certainly stood out as a bit of gem on my weekend to-do list. In fact, with a little help, I managed to complete the task a full 24 hours ahead of deadline and, in doing so, a quiet day with the family took on a rather decadent feel. Saturday dawned warm and bright, which was a lovely surprise and made it automatically feel like a special weekend. My plan to spend the afternoon watching my son play cricket looked even more attractive and, while a little unorthodox, I took along the nicely chilled white - Viré-Clessé, Grand Vin De Bourgogne 2006 - and shared it with some other non-driving parents. In contrast to the gentle unfolding of the innings in front of us, the wine was polished off quickly and with appreciation. It was a little sweeter than I would choose, but its succulence and fruit flavours, particularly gooseberry, meant it was a most enjoyable refreshment and we all appreciated its crisp finish (just like the flourishing off-drives on the pitch). The leather on willow, sunny countryside and white Burgundy was a wonderful combination and very relaxing; indeed, the effect was a little soporific. So much so, it was made clear to me that the fact our team won was not perhaps as important to me as my now rather pleased son felt it should have been. Arriving home, I lit a bonfire to complete the tidying I had previously done in the garden. With the falling temperature as afternoon turned to evening and the smoky aroma from the fire, I started to anticipate the red wine that I knew awaited my attention.

She who must be obeyed was preparing roast lamb, new potatoes and mint sauce for dinner, leaving me with two roles in order to keep the household running smoothly. The first, and most important, it has to be said, was to enthuse about the splendour of the meal which later I duly did. The second was to open and serve the wine, a Bourgogne Pinot Noir 2006, which turned out to be a perfect accompaniment to dinner. It was a strong, spicy and aromatic red with deep fruit flavours of raspberries and blackcurrants that were quite intense, but we both agreed the lamb could take it. Crucially, I had managed to get through the afternoon without hearing the Lions rugby score in the second test, which the cricket had taken precedence over earlier, so I retired to the living room with the bottle to watch the re-run. The wine was just right to ease the tension, but unfortunately had to prove itself as a means of drowning sorrows as the Lions were beaten with the last kick, as I was with the last few drops. The day had certainly worked out well and I felt I had tackled this least arduous of chores in the correct way - white to while away the afternoon on its own, red with a roast to really enjoy the full flavour. ■

The facts: White: Vire-Clesse 2006, £12.00 Red: Bourgogne Pinot Noir 2006, £13.50. Iain Moffat’s wine was selected by Harvey Nichols Leeds, 107-111 Briggate, Leeds, LS1 6AZ,tel 0113 204 8888. See www.harveynichols.com for further information and to find your local store.

The wine ... had to prove itself as a means of drowning sorrows as the Lions were beaten with the last kick

BUSINESS QUARTER |SUMMER 09

FASHION

SUMMER 09

STILL A HIGH FLYER After 225 years producing fine knits in Derbyshire, classic designs from John Smedley remain a wardrobe staple Clothing entrepreneur Ian Maclean has dozens of sweaters (“all of which I paid for, of course ...”), but a piece of history about the family firm that made these garments still surprised him when he joined as its new chairman last year. Back in 1771, when Richard Arkwright invented the ‘spinning frame’ knitting machine and opened what can claim to be the world’s first factory, three other textile entrepreneurs one of them Maclean’s direct ancestor emulated him. Only one of these businesses survived, at Lea Mills, Matlock in Derbyshire, and this is now known as the knitwear brand John Smedley. And so it transpires that Maclean, at 41, finds himself head of the world’s oldest, continually operating manufacturing business, which is now 225 years old. That’s some responsibility. “Two things have been on my mind since joining,” he says. “One, I don’t want to be the man who ends up turning all the lights out, and two, what a great opportunity I have. It’s only a small business, but it has a dream balance sheet thanks to my predecessors, who took great decisions.” These decisions included huge investment in factory sites, buying up the surrounding land

BUSINESS QUARTER | SUMMER 09

to have sole access to the spring water necessary for the making of fine knitwear, plus continued investment in the latest machinery, and an ability to persuade shareholders (who number about 70, owning 30% of the business) not to take back all their money in dividends; “to put off that decision to lie on a beach forever,” as Maclean puts it. They are also decisions that in some cases go back more than two centuries and heritage can be a millstone, holding companies back from vital progress, but right now it seems to be in demand. Increasingly, the recession is driving consumers to look for brands with certain key characteristics. These include traceability - and the buyer of each Smedley garment can trace its wool to the particular sheep farm in New Zealand that supplied it. We also like provenance - and this company manufactures only in England - and longevity, which Smedley clearly has in spades. “I remember being told once that the customer doesn’t care where a Chanel shoe is made, just so long as it has the logo on it. But customers are looking beyond the surface of everything they buy now and are regarding different qualities as desirable,” says Maclean, who comes to Smedley - its seventh >>

SUMMER 09

FASHION

BUSINESS QUARTER |SUMMER 09

FASHION

SUMMER 09

One aspect of the business needing more work than others ... is image. We need to be better at the customerfacing stuff. We’re aware that few products can survive without the right image now

Fine knitwear: John Smedley knits remain a classic staple of any man’s wardrobe; equally versatile at work and at play

generation chairman - after spells with 3i and the outdoorsy clothing company Orvis. “If fitting into a renewed interest in provenance hits the zeitgeist, then I’m more than happy, but there’s always something new to do.” That may seem an odd statement for a company that, superficially at least, has not done much new for a lifetime, but that has underpinned the brand, which recently won the Gold Export Award and the British Knitting and Clothing Export Council’s new Heritage Award. At heart, it is known for making one product - the plain, resolutely logo-free, finest gauge wool or Sea Island cotton knitted shirt - and doing so exceptionally well. Even its employees seem part of a long tradition, with some having worked for the company for 40

BUSINESS QUARTER | SUMMER 09

years or more, with their children following in their footsteps. That is just as well - a major problem Smedley is likely to face in the longer term is how best to attract young, aspirational people into training to fix a trim or collar to a shirt with the kind of instinctive hand-eye co-ordination that only comes with years of experience. The company recently snapped up nine ‘linkers’ from a small competitor that closed, but it will increasingly have to develop its skills base itself. No wonder if, in the meantime, the ‘if it ain’t broke, don’t fix it’ mentality is a tempting one to relax into. Certainly, Maclean shies away from re-framing the company as part of fashion, as if that were some newfangled concept an established

manufacturer in the north would little concern itself with. “Fashion, to my mind, suggests boom or bust, something you’re either in or out of,” he says. Yet fashion has, to be fair, somewhat assisted the brand of late, with the gradual casualisation of the workplace meaning that the wearing of fine gauge knitwear with trousers or under a suit jacket is an increasingly acceptable alternative to the shirt and tie. Maclean, however, thinks of John Smedley as part of the broader style industry, albeit in a specialist way. “We’re known for a single product and I think that if we tried to produce other kinds of clothing, as we could have done, we’d suddenly have to narrow our appeal to one

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FASHION

Classic look: The John Smedley brand is firmly rooted in classic quality, and there remains a determination within the business to keep doing what it does best, without trying to diversify into more products that might force a shift into a more strictly defined sector of the market

end of the customer spectrum or the other, and at the moment that covers everyone from 18 to 65, depending on how you wear it,” says Maclean. “Does that mean we’re limited? I really don’t know.” It certainly does not mean that John Smedley has failed to move forward. While its classic, simple knitwear, many designs dating to the 1930s, remain the brand’s bread and butter, design director Dawne Stubbs has introduced more colour and variety, such that the brand has picked up considerable attention from (whisper it ...) fashion followers. These will no doubt be drawn to the special-edition ‘225’ collection launching later this year to celebrate the anniversary. Indeed, over the last year the company has undergone

a minor face-lift that has seen the refurbishment of its single flagship store on London’s Brook Street, an updated website and the gentle modernisation of its corporate identity. It may not be dragging the company into the cold light of the 21st Century, but nor it is leaving it in the 18th. “The last few heads of John Smedley have been production-led in their thinking, and if one aspect of the business needed more work than the others, it would be the company image,” Maclean concedes. “We need to be better at the customer-facing stuff. We’re aware that few products can survive without the right image. We can still sell a lot more of the core product, and when we have a cushion of money we can do more risky

things. I just want John Smedley to be in business for another 225 years.” The factory floor at Lea Mills provides an apt analogy for the company’s position between the allure and quality assurances of yesteryear and the need to prepare for tomorrow. On one side the company has the most advanced, Japanese-made ‘whole garment’ machines capable of knitting a shirt from spool of thread to finished garment and ideal for the more complex designs that John Smedley is now producing. But on the other side stand ranks of clunking, whirring, Heath Robinson machines. Each has been producing fine knitwear for generations, and, most likely, they will continue to do so for many more to come. n

BUSINESS QUARTER |SUMMER 09

EQUIPMENT

SUMMER 09

SIGNATURE STYLE The fountain pen is making a welcome comeback in the boardrooms and cabinet rooms of the world, where the status of a truly stylish pen affords the owner a certain cachet, asserts Chris Porter

BUSINESS QUARTER | SUMMER 09

SUMMER 09

You see it at the signing of international peace agreements and big business deals. It’s used to sign books of condolence and very large cheques, in the passing of laws and the creation of presidents. It is not a Biro; no matter how convenient, lightweight, leakproof (most of the time at least), maintenance-free and readily discarded one may be. It is the fountain pen, most typically in these situations the Mont Blanc Meisterstuck, the daddy of prestige pens, if only because of big-money marketing and the fact it is one of the largest pens on the market. Indeed, with texting, emailing and now the widespread use of chip and pin making any kind of physical writing look almost obsolete, fountain pens look increasingly anachronistic, barely a step from the quill. And yet, over the past five years, sales have increased by nearly a fifth, with fine stationery also now selling well. “With every advance in technology there tends to be a backlash, in this

EQUIPMENT

case back to the written word,” argues Nicola Leadley, international marketing manager for Cross, which later this year launches its new super-premium Apogee line of gold pens. “People want to write with pen and ink because it’s more personal, and because it’s the practise of a skill - schools are even encouraging children to write with fountain pens again now because you have to take more care forming your letters.” Writing with a fountain pen is undoubtedly a forgotten physical pleasure - the rediscovery of one’s true handwriting via the medium of unforced, steadily flowing ink combined with a sense that one is committing something of significance to paper, even if it is just your shopping list. Not for nothing did Goethe refer to ink as ‘liquid thoughts’ - using a fountain pen encourages more ponderous, deeper thinking about the written word. The pen’s revival is also a reflection of a growing appreciation of >>

BUSINESS QUARTER |SUMMER 09

EQUIPMENT

SUMMER 09

craftsmanship over convenience, of the kind that has seen the renaissance of mechanical watches in the face of cheaper, more robust and more accurate quartz digital watches. This is something the booming collectors’ market most keenly recognises: high quality pens in lacquer, gold or silver from the 1920s to 1940s are now especially sought, with the world record for the sale of a fountain pen at auction standing at some £183,000 (in 2000). And, unlike gadgetry, the fountain pen really is personal - and not just as a consequence of the diverse models that have characterised the industry’s new adventurousness in design over recent years, from Omas’s pens, enamelled with Japanese manga artwork, to FaberCastel’s, made from fossilised mammoth ivory, and the likes of Caran d’Ache’s design by Mario Botta, a Bauhaus-inspired pen capped with a peacock feather. Through use the nib actually shapes itself to reflect the owner’s grip, which is one reason why a fountain pen should not be shared (the other being that you may never see it again). Certainly, although larger models by the likes of Montblanc and Pelikan offer a greater ink capacity (an important consideration for those who write a lot), and the size of the pen needs to be comfortable for sustained use, it is really in the nib that the difference lies. Modern nibs may be more rigid than their vintage counterparts, which is good for the heavy-handed who were brought up using ballpoint pens - but they are also much smoother, the scratchiness that some may associate with them a thing of the past. Nor, according to Patrick Rudomino, brand director for the Italian pen brand Montegrappa, which last year opened its first western European store in London, is that the modern fountain pen’s only improvement. Smoother pistons means loading a pen with ink is easier; the ink itself has been refined to be more free-flowing; barrels are made from reinforced resin or, in pricier models, celluloid, which gives a warmer handle; and ink feeders made from ebonite (a rubber and sulphur compound) feed the ink to the nib as fluidly as that from a rollerball. Those worries of ruining

BUSINESS QUARTER | SUMMER 09

Works of art: Dunhill’s luxury range includes the Sentryman Alligator limited edition (above left) and the limited-edition Sidecar Victorian in burgundy lacquer (second left) with platinum-plated brass cap

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your shirts with ink blots are generally unfounded too. “It used to be the case that a fountain pen had too much personality of its own and did what it wanted,” jokes Rudomino. “But while it may not have changed much in substance, technology has produced a much more advanced product that can, for instance, cope with the pressures of air travel without leaving you covered in blue blotches.” But for all that, it is more the pen’s symbolic power that has ensured its return. The fountain pen is an item of accessible luxury, but also a serious product suggesting a certain station in life. This is why more affordable versions with stainless steel nibs but much the same writing quality as more expensive pens, are often given to mark the transition from youth to adulthood, or why more prestigious pens become family heirlooms. It is also why, 25 to 35-year-olds are the most resistant to taking up the fountain pen - one needs a certain sophistication that perhaps only comes with maturity. One also needs a certain sense of style. That’s why the boardroom player about to sign an important deal knows they are making a statement about themselves and their rank by their pen, be it one of the aforementioned brands, one of the growing number of ‘boutique’ brands like Conway Stewart or Nakata, or a classic Parker, Dunhill or a Waterman - named for Lewis Edson Waterman, who invented the fountain pen in 1884. “There’s a sensory experience in using a fountain pen - the sound of the nib across paper, the click of the cap - an experience you also get with a quality car,” says Jean-Marc Pontroue, executive vice president for Mont Blanc, a brand which, in its recent extension into watches and other luxury goods, perhaps further suggests the widening appeal of the fountain pen. “But when someone uses a fountain pen it also speaks of power and suggests that they have taken their time and thought about what they’re writing. The fountain pen is as romantic as any mechanical watch. In fact, a fountain pen isn’t just a pen - it’s a writing instrument.” ■

EQUIPMENT Montegrappa’s Invito a la Traviata fountain pen in sterling silver and red celluloid, £1,850 (also available in yellow gold, £10,500, or yellow gold and diamonds, £14,000) For stockists, see www.montegrappa.com

BUSINESS QUARTER |SUMMER 09

MOTORING

SUMMER 09

SWEDISH SPORT STYLE

Sue Blake, director of Berwins Solicitors, Harrogate, swaps her sporty soft-top for sports utility with Volvoâ&#x20AC;&#x2122;s new award-winning XC60

BUSINESS QUARTER | SUMMER 09

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“Do you fancy doing a test drive in a Volvo XC60 Diesel D5 SE?” I was asked. Yes, of course, I’d be delighted, I replied, not having a clue what sort of vehicle it was and never having driven any sort of Volvo before. Having worked my way through a fairly boring car history majoring in sensible familyorientated economical and cheap-to-insure estate cars, perfect for ferrying kids and stuff to and from school, university, music festivals, etc, I finally have a not-very sensible, but fun sporty soft-top, albeit a fairly comfortable four-seater one. So, the next step was to turn to Google, where I discovered that the Volvo

XC60 Diesel D5 SE is What Car? magazine’s SUV of the Year 2009 and boasts impressive comfort, durability, safety and class-leading refinement, which, in addition to the fact that I thought it looked good too, meant I was really looking forward to having a blast in it. My first impressions were that it looked sleek and stylish, which was good, though I wasn’t entirely convinced by the lime green metallic paintwork. Ever onward, however, I decided it would probably grow on me, unlike the interior yellow and black leather. I know I’m being picky, but you know what they say about

MOTORING

first impressions - they really do count, and that includes the trim in a car’s interior. Fortunately, I really did like the shape – smooth, very aerodynamic, no sharp angles, with a nice cat-like slope from back to front, which is quite sexy really. Shame about the radiator grille though, which somehow doesn’t look quite right, but I digress. For an automatic, it was responsive and very smooth going up through the register, with no nasty lurches when accelerating hard. It’s quiet too, and having driven through town at a fairly sedate pace, I took it out onto open road and got from 0 to 60 mph in a satisfyingly short >>

BUSINESS QUARTER |SUMMER 09

MOTORING

SUMMER 09

count, though I felt I’d hardly scratched the surface of its capabilities. However, common sense had to prevail, so having gone a good few miles on the A1, I turned off to test it round the country lanes. Easy to handle and good round tight corners, the ride was firm and positive and, with quick acceleration, lots of fun. The conditions were dry, so I’ve no idea how it handles in the wet, but being a Volvo, with the marque’s reputation for safety first, I’m sure they have that covered. I didn’t get the opportunity to try the ‘City Safety’ technology, so will leave you to find out what Jeremy Clarkson has to say about his experience. For my part, I liked being fairly high off the road; a position that offers great visibility all round and isn’t so high that it presents a mountaineering effort to climb into the driver’s seat. On a practical level, there’s masses of boot space, though it struck me that it might be a bit of a squeeze to fit three big adults in the back seat. There’s also a slight shortage of space in the door pockets, and I thought it was a bit stingy only giving the driver an

BUSINESS QUARTER | SUMMER 09

electrically adjustable seat. What about the passengers? It had a great sound system, however, and decent-sized courtesy mirrors for those essential lipstick moments, but I missed the parking sensors? Yes, there is good rear vision for judging where the back of the car is, but I did think that rear sensors would be

SUV style: Sue Blake with the SUV that very nearly stole her heart, and may well have done so, were it not for her muchloved soft-top at home

standard on this model. I’m no coward when it comes to parking, but I admit that I’ve got used to having such little luxuries. On a cooler note, the air conditioning was incredibly efficient, and having hit the heatwave it was positively wonderful to be wafted by cool air within seconds of starting the engine. The driver’s seat was very comfortable with great lumbar support and I really felt I could have driven all day. I also loved the automatic fold-away wing mirrors which operate when you lock the car. There are also nice little touches like the LED display on the rear-view mirror telling you which direction you are heading (the pub was South West…) and all in all, it was comfortable, very quick off the mark, easy on the eye and a pleasure to drive. I remain devoted to my sporty soft-top, but this sports utility certainly made an impression. n Sue’s Volvo XC60 D5 SE, priced £30,945, was provided by Mill Volvo Harrogate, Grimbald Crag Rd, St James Retail Park, Knaresborough, HG5 8PY, tel 01423 798 600, www.millvolvo.co.uk

SIMPLY STUNNING OFFER FROM MILL VOLV0 VOLVO XC60 DRIVE S £350 A MONTH

SPEC

£21, 495

Life is better lived together

IAL M

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RICE

VOLVO XC60 DRIVE S THE XC60 SPLICES TOGETHER THE VERY BEST OF BOTH WORLDS. CROSSOVER SIGNALS LIKE 20-INCH WHEELS, ACCENTUATED WHEEL HOUSINGS AND ALUMINIUM SCUFF-PLATES EMPHASISE UNMISTAKABLE XC MUSCULARITY. WHILE ABOVE THE WAISTLINE, SLEEK WINDOWS AND A DRAMATIC ROOF LINE TRACE THE PROFILE AND SPORTY CHARISMA OF AN ELEGANT, SEXY COUPE. IT HAS THE LOOKS TO STOP TRAFFIC BUT IT’S ALSO A CAR THAT STOPS ITSELF THANKS TO CITY SAFETY, AN INGENIOUS LASER-BASED SYSTEM THAT APPLIES THE BRAKES TO HELP YOU AVOID LOW SPEED COLLISIONS. ARRANGE AN XC60 TEST DRIVE AT ANY MILL VOLVO DEALERSHIP.

VOLVO XC60 DRIVE S 5 DOOR ESTATE 2.4 MANUAL 175PS DIESEL

Special Mill Volvo price on the road

£21,495.00

Customer Part Exchange/Deposit †

£1,437.29

Mill Deposit Contribution

£1,000.00

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£19,057.71

36 Monthly Payments of

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£349.98

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MILL GARAGES about Customer Service Mill Hexham Bridge End, Hexham NE46 4JH. Tel: 01434 605 303

Mill Sunderland Wessington Way, Sunderland SR5 3HR. Tel: 0844 470 4364

Mill Newcastle Scotswood Road, Newcastle NE15 6BZ. Tel: 0844 470 4393

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Mill Harrogate Grimbald Crag Road, St James Retail Park HG5 8PY. Tel: 0844 470 4373

FUEL CONSUMPTION FOR THE VOLVO XC60 RANGE IN MPG (L/100KM): URBAN 28.8 (9.8) TO 16.5 (17.1), EXTRA URBAN 45.6 (6.2) TO 31.7 (8.9), COMBINED 37.7 (7.5) TO 23.7 (11.9), CO2 EMISSIONS 199 TO 284G/KM Finance subject to status. Guarantees/Indemnities may be required. *Payable with your first monthly payment. **Payable with the GMFV if you wish to own the vehicle at the end of the agreement. Further charges may be made subject to the condition of the vehicle, if the vehicle is returned at the end of the finance agreement. *** Payable if you wish to return the vehicle at the end of the finance agreement and the agreed mileage has been exceeded. Volvo Car Finance SL7 1YQ.

www.millvolvo.co.uk www.driveavolvocompanycar.com

103248_BQ_06_09_XC60

ENTREPRENEUR

BUSINESS QUARTER | SUMMER 09

SUMMER 09

ENTREPRENEUR

NEW YORK, LONDON, PARIS ... LEEDS? Aqua Couture plans to be the next ultra-hip fashion brand. Its creator, Julie Lingard, tells Peter Baber how cutting-edge chic from Leeds can make its mark on the world stage ...

BUSINESS QUARTER |SUMMER 09

ENTREPRENEUR

The Victoria Quarter was - some would say still is - probably the main reason why for so many years Leeds has managed to get away with calling itself the ‘Knightsbridge of the North’. Just about every TV programme about the city includes copious footage of its elegant Victorian interior, which many fashion boutiques see as an essential backdrop to highlight the quality of their wares. Small wonder that Harvey Nichols chose to latch onto the Victoria Quarter to open its first store outside London in 1994. But Harvey Nicks, of course, isn’t Leeds-born and bred, and if you take a closer look at some of the Victoria Quarter’s other current tenants you’ll see they aren’t either. Take Brora, for example – from Scotland. Ted Baker? Hardly. And Vivienne Westwood – a barometer for all that’s chic and hip, but still emanating very much from London. Is there any shop in here, you might begin to wonder, that can

BUSINESS QUARTER | SUMMER 09

SUMMER 09

genuinely be said to be successfully showcasing Leeds and Yorkshire talent? Well since 2006, yes there is. Walk down to the end of the gallery nearest to Harvey Nichols, just opposite All Saints (another London import) and you’ll find Aqua Couture. It’s a boutique that, after ten years on the scene, not all of those years in the Victoria Quarter, is already well known and liked among the fashion cognoscenti and nightclubbing crowd in Leeds and its environs. And now it’s beginning to attract attention from London and abroad. Managing director Julie Lingard says the store’s mens and womenswear has been quietly selling on ASOS - the fashion website that’s a must for all designers, particularly those cutting-edge names clamouring to make their name - for the past two seasons. This season, the label is about to be given an increased push on the website after the singer Alesha

Dixon chose to wear an Aqua dress on the front cover of Company magazine, bringing the brand the sort of all-important celebrity endorsement that can make a fashion label. “Getting Alesha in that dress was huge,” says Julie. “They put that magazine out, and ASOS sold out within two days.” Aqua is currently looking for a site to open a new branch in London, and there is an agent down there ‘itching’ to take the label on, says Lingard. Then there are the designers who have come out of the shop to make their own name. These include James Steward, twice Yorkshire bridal designer of the year, and Natalie Incarnita. “Natalie came to me as an independent six years ago,” says Lingard. “We started doing a little range of her pieces, and now she sells to Los Angeles, New York, Australia, with 35 shops all over the country. She has a fantastic brand. She designs Natalie

SUMMER 09

Incarnita for Top Shop and ASOS.” Lingard has come a long way for someone who originally started out running a successful hair and beauty business in Grimsby – hardly, it has to be said, the style capital of the world. In the mid 1990s she decided to sell up and move to Australia, where she worked for three years. “When I was there I really got into the fashion retail business in Sydney,” she says. “I loved the business. But then in 1999 I came back to the UK for my sister’s wedding. At the reception, one of her friends told me that she was selling her clothes shop, and I bought it that night.” The shop in question - which she bought for £10,000 from an inheritance – was in Savile Street in Hull; a step up, fashion-wise, from Grimsby, but still nothing particularly startling. But right from the start she knew that this had to be a boutique with a difference. “It was a new concept in that, rather than buying

ENTREPRENEUR

designs from people, we wanted to get designers to design for us,” she says. “So we started supporting independent designers in the North. Our first one was James Steward. We started supporting them through manufacturing and so on, because all these designers in the North aren’t really in the key

locations to attract the backers they need.” The reputation of the shop, which still exists today, quickly grew. “Within three years, we had got ourselves known as independent designers you could buy one-off pieces from,” says Lingard. “We started getting girls who were at college saying we should open in Leeds. So we came to the Corn Exchange. From the day we opened in 2002, the business just boomed. James Steward had girls queuing outside the door to have dresses made for them.” There was still very much a focus on the store being a collective, rather than a shop with a traditional hierarchy. Lingard says she had good reason for this, and was willing to risk seeing designers she had supported move on to bigger things. “Most independent designers want their own business, but can’t afford it,” she says. “Initially, I was funding them, but now they are earning fees themselves. It’s definitely a business where everyone flourishes. It’s not one where people are thinking: ‘The boss has done really well’, and then they aren’t happy. If you stifle talent they move on anyway.” As for the shop, by now a lot of young men were coming in with their girlfriends and asking why she didn’t stock menswear. That, she says, was a major turning point. Few of the people she worked with had done menswear before, and she certainly hadn’t, but the time had come. She also noticed something else. “We realised that we were starting to be a brand,” she says. “People were coming in looking specifically for Aqua pieces. For instance, after we launched menswear, we started getting the Aqua >>

Most independent designers want their own business, but can’t afford it. Initially, I was funding them, but now they are earning fees themselves. It’s definitely a business where everyone flourishes

BUSINESS QUARTER |SUMMER 09

ENTREPRENEUR boys coming in. We were getting a cult following. Our drop-crotch men’s jeans have become staple pieces in Leeds. We’ve sold thousands of them.” Launching a label clearly requires considerably more back-up than just retailing, and Lingard is proud to assert that Aqua is a brand that is created almost entirely in the UK. She found a site for a design room in Bridge Street in Leeds and opened a small factory in Bradford. Keen to carry on supporting local design talent, most of the designers Lingard has used over the years have come from Leeds, Wakefield and Bradford. “I did a lot with the Leeds local media,” she says, “because everyone thought they had to move to London to make their name, but I have showed them that they could make a success here.” She says, however, that people often ask her why she doesn’t move south. “My boyfriend lives in London, and I’m going to open a shop down there, so it’s natural they would ask,” she says. “But I love Leeds. Okay, you haven’t got 15 theatres, but you still have gorgeous restaurants and lovely parks. I’m really into hiking and walking and I can drive for 10 minutes and be in the Dales. I love the diversity here - being in the city and still being so close to the country.” Recently, she has even enticed a northern designer who had moved to London to come back and work for her again. She also says that even now there is a difference in what people wear – and therefore in what fashion designers get them to wear – between London and Leeds. “When you’re in London the fashion is all ‘too cool for school’,” she says. “It’s all dress down. All the Londoners are walking around in flat heels and casual tailored pieces, whereas in Leeds the girls still love getting dressed up in high heels and sexy dresses.” The designs Aqua produces are certainly cutting edge, and probably not the kind of thing you could reasonably leave to the foreman of a factory in Cambodia to get on with. Aqua womenswear includes much use of high-tech materials and funky, asymmetric silhouettes, while the menswear range also reflects this idea and introduces designs that are probably entirely new to most men’s

BUSINESS QUARTER | SUMMER 09

SUMMER 09

wardrobes – such as tops with cowl necks. Lingard laughs at the mention of them because, she says, even All Saints, which thinks itself pretty cutting edge, was taken aback when they appeared. “The guys from All Saints were up in Leeds visiting their store and having lunch in Antony’s Patisserie next door when they saw them in the window. They really bought it. They were thinking, ‘Wow! Aqua is a year ahead of us!’” She says that much of the edginess in the collections she sells is down to her menswear designer, Ryan Holliday Stevens. “Yes, it is way out,” she says, “but Ryan is really into the Leeds gay scene, and that’s really edgy. We weren’t sure at first, but we thought we would run with it, and gay guys have got such a great dress sense. What has happened from that is that now a lot of the other guys feel they want to dress like that too. I suppose it’s

the metrosexual market that we’re after.” Cutting edge is probably where Aqua is going to stay. Lingard says that, unlike All Saints, which she says plans to move out of the Victoria Quarter and into one of Leeds’ main shopping streets as it establishes itself as a mass market brand, she wants Aqua to remain in a niche market. “I’m not saying everybody gets our fashion, but we like to lead fashion rather than follow it,” she says. Lingard has been approached by an investor, but for the time being she isn’t interested. “I definitely want to keep it in-house,” she says. “I’m opening with Ryan as a partnership in London and I want to continue to work with people I have worked with for ten years. It sounds a cliché, but we aren’t just business partners, we’re all best friends. We all work so hard together. As long as we get what we all want, no one’ll leave. Ryan could move to

SUMMER 09

ENTREPRENEUR

We don’t ever want to saturate our market. As independent designers, I don’t think we could ... We want to stay as a concept store

London, but he doesn’t want to do that.” She has a business plan: in five years, she wants to see Aqua Stores in four more cities – London and Manchester (where they are already looking), followed by Liverpool and Newcastle. “All Saints have 57 stores now,” she says. “They’re in Ibiza, and well done to them, but we don’t ever want to saturate our market. As independent designers, I don’t think we could. We always want to stay as a concept store.” But this is a concept store that has done well enough to move out of the Corn Exchange into three floors in the Victoria Quarter – two for retailing, one for the agency side of the business. Since Aqua moved in here, of course, the Corn Exchange has been transformed, with many of the small fashion businesses that Lingard would have been close to forced out. She regrets that happened, but she understands why the Corn Exchange had to

change. “It started having this big Gothic scene,” she says, “and they were all hanging around outside on Saturdays. It became really not very nice. So of course the owners decided to close it all down, spend £2m on it, revamp it all and put air conditioning in. They’ve reopened it now and it’s a beautiful building. Antony’s is on the main floor, but they will still have fashion on the top floor. “It’s a shame for lots of the small independents who were here and disappeared as a result of the changes. The Corn Exchange did showcase them because loads of people could open a shop for £16,000 a year rent and make a good little business from that. “I was lucky to get out of The Corn Exchange early and I didn’t lose my business. I know many of my friends did. But we wanted to expand anyway, and we spoke to the Corn Exchange owners about expanding in there and they told us what they were doing, so we

were lucky in that we were a year or so ahead of all the rest.” Even then, the initial move into the Victoria Quarter wasn’t easy. She says the business ‘troughed’ in 2007, five years after the initial euphoria, though it is booming now. And is she satisfied still? After all, this is a woman who spent a year of her time in Australia working as a diving instructor on the Whitsunday Islands. Sitting even in the elegant surroundings of the Victoria Quarter on a cold and soggy morning, doesn’t she regret coming back? Not at all, she says. “When I was abroad I missed English people and English humour. Australian people are lovely, but they don’t have that humour. I was in Australia for three years and came away with two English friends.” And so it seems, in the hectic world of fashion, humour always helps, and having fun in Leeds is this brand’s winning formula. n

BUSINESS QUARTER |SUMMER 09

INTERVIEW

SUMMER 09

riders oN the storm There’s no doubt about it – the financial downturn has hit Yorkshire harder than most regions. But there are success stories within the sector even now. Peter Baber talks to the survivors “It’s an established fact,” Ian Ward, chief executive of the Leeds Building Society insists, “that most people who borrow money pay it back. It’s a media myth that they don’t. When we say our bad debt has gone from 0.5 per cent to 2 per cent, that still means 98 per cent of our people are paying us.” That may be so, but the sudden slump in confidence that everyone in the business of lending money seems to have suffered since August 2007 has by now certainly led to a heavy toll on the financial services industry. Even

BUSINESS QUARTER | SUMMER 09

Ward points out that total net lending in the UK in the first quarter was just £84m – compared with £16.45bn the year before, when credit was already crunching. “We are talking about a mortgage market that has shrunk so much you can’t even work out the percentage easily,” he says. Such shocks have certainly been felt in Yorkshire, which up until the credit crunch started prided itself as a real focus for the industry. The region which housed the UK’s first phone banking service – First Direct in 1989 – also included heavyweight names not just in banking and building >>

SUMMER 09

INTERVIEW

Heavy toll: Ian Ward, chief executive of Leeds Building Society, says the mortgage market has shrunk so much it is difficult to quantify it in percentage terms

BUSINESS QUARTER |SUMMER 09

INTERVIEW

SUMMER 09

societies, but also in insurance and assurance (Aviva is one of York’s most significant employers), and a strong showing from the country’s leading accountancy and particularly legal firms, not to mention numerous back office operations. But then came HBOS’s hurried merger with Lloyds TSB, the disappearance of Bradford & Bingley and at least 350 jobs as its retailing arm was taken over by the Spanish bank Santander and the rest was nationalised, the hurried merger of the Barnsley and Yorkshire building societies, and the Scarborough Building Society with the Skipton. This last merger happened just weeks after Scarborough had announced its new chief executive. The newly merged Skipton was hit further in March this year when the ratings agency Moody’s downgraded it to just one level above junk bond status. Moody’s cited both the costs of the merger for doing this, and the societies’ higher-than-average exposure to the housing market. Given that the UK had already seen “a double digit price decline”, it said, it had to prepare for a worst case scenario of peak-to-trough fall of 40 per cent in UK house prices. Not surprisingly, such a shock to the system has got more than just industry insiders busy working on some kind of rescue plan. Shortly after the announcement of the HBOS merger with Leeds, a special Financial Services Task Group was set up, chaired by Yorkshire Forward chief executive Tom Riordan and including Rosie Winterton, Minister for Yorkshire. They have subsequently been meeting with directors from Lloyds TSB to lobby hard to make sure Yorkshire is not hit too hard by any job losses coming out of the merger. The recent announcement that Lloyds TSB’s own Cheltenham & Gloucester brand would be disappearing from the high street, rather than the Halifax, was not altogether unexpected – Halifax was a much larger operation. But speaking before Lloyds TSB had announced its latest tranche of 2,100 job cuts, and acknowledging that it might still have some job shedding to do, Riordan says the region – and particularly the town of Halifax itself, which stood to lose most - can take a sigh of relief. “I am cautiously optimistic that there won’t be an impact on Halifax,” he said. “I am confident that we have made a very strong case for the region and for the people of Halifax.” What then, of those who have – for the moment at least – survived the carnage so far? Leeds Building Society was not downgraded in the latest Moody’s ratings. “Our level of profit was down in 2008,” says Ward, “but on a pro rata

BUSINESS QUARTER | SUMMER 09

Cautiously optimistic: Despite the crunch, Ian Ward expects pre-tax and operating profit at Leeds Building Society to rise this year

Our level of profit was down in 2008, but on a pro rata basis, we achieved a higher level of profits than any other building society

basis we achieved a higher level of profits than any other building society. We expect pre-tax profit and operating profit to rise this year.” He believes his society has weathered the storm largely by being cautious. This includes not splashing out on unnecessary expenses. No one at Leeds Building Society travels first class – not even Ward himself. “Our cost >>

IT’S ALL ABOUT THE PEOPLE. www.nigelwright.com

INTERVIEW

SUMMER 09

to income ratio is 40,” he says. “For every £1 we earn, we spend 40p. With most other societies it’s massive. The average is over 60p. That 20p is worth £30m a year to us.” Caution also applies to where the society gets its money from that doesn’t come from savers. Ward is proud of his society’s figures for supplementary capital – how much money they borrow on the open market. In 2008, supplementary income amounted to just 12.78 per cent of free capital. That means the society is not having to pay huge amounts of interest on money borrowed, says Ward. And when you consider the trouble that the West Bromwich Building Society had to go to in recent months, having to get creditors to take an equity stake in the business, you can see he may have a point. West Bromwich’s supplementary income to free capital ratio in the same year was 52.24 per cent. “We put more away for rainy days in the good times than most of our competitors,” says Ward. It also steered clear of the more left-field mortgage lending. It didn’t do self-certified mortgages at all, for example, and while it did offer buy-to-let mortgages, this was nothing like on the scale of Bradford & Bingley. “We lent up to 70 per cent and demanded 130 per cent rental cover,” says Ward. “What you will probably have seen elsewhere is a lot of people who hadn’t got very much experience gearing up, wanting to borrow 90 per cent without having 130 per cent rental cover. That’s not to say the Leeds’ performance so far has been flawless. Another ratings agency, Fitch, has drawn attention to the society’s record on commercial lending, claiming it perhaps over-exposed itself to too few borrowers. Ward says commercial lending only ever amounted to about 6 per cent of total business, and has pretty much dried up now. “We have a small number that are in arrears and there is the potential for small losses,” he says. But a cautious approach is also one that has benefited even less conventional lenders like Bradford-based Provident Financial. The doorstep lender has certainly seen its results improve in recent months as people who have now been turned away by newly chastened banks look elsewhere for funds. Customer numbers have grown by 5 per cent every year for the past three years, and the company reckons only half of this is down to natural organic growth. But a spokesperson insisted that that doesn’t mean Provident Financial is taking on risks that others have rejected. Some 60 per cent of applications were turned down in 2008. “Our agents are paid

BUSINESS QUARTER | SUMMER 09

based on the amount they collect, not on the amount they lend,” the spokesperson said, “so it is not in their interests to lend more than customers can afford to repay. Our loans are also for short periods, typically around a year, so the period in which a customer’s circumstances can change is relatively short. The weekly face-to-face service in the customer's home allows the agents – 71 per cent of whom are women to judge what a customer can afford to borrow.” It all sounds perfect – until you remember that three years ago this was the company that was forced to close down its Yes Car Credit subsidiary, partly because of adverse media reports about its style of business. Yorkshire Bank – no longer Yorkshire-owned, but with a strong Yorkshire presence – also claims that a cautious approach is one that has served it well. Over the last six months, it has seen customer numbers grow by 43,000, and business lending rise by 14 per cent. Director Dean Cutbill says: “Across our business we have 10 savers for every borrower. In fact in the last reported six months deposit volumes were up 15 per cent to £20.1bn, almost five times the industry average, giving us a very strong deposit base. A key part of our strategy is the model that we operate in our business banking arm, where each local centre operates its own P&L and local deposits are used to fund local lending.” But another key to the success of those Yorkshire financial institutions that appear to be going the distance would be diversification – not into risky new types of lending, but into other areas of business that aren’t so strictly tied to the process of borrowing and lending. “We are fortunate in that we are not as exposed as others to lending,” says David Cutter, chief executive of the Skipton Building Society. His organisation has in fact noticed the first signs of recovery from, of all things, Connells, the estate agency chain it owns. “There are definite signs of recovery there,” he says. “For three months now we have seen that division surpass all expectations. That gives us confidence that our financial performance this year will enable us to pay higher rates to attract retail customers.” Then there’s the Call Credit business too. For many years one of Yorkshire’s fastest growing individual companies, Cutter says it has been given a boost because of its open debtors initiative. “This is a conduit used by all lenders where they are provided with an individual’s turnover – not just his current account – so you can take a holistic view of an individual customer from all lenders, and this can be used by lenders to

SUMMER 09

INTERVIEW

Right now, there will be people gathered around coffee machines at HBOS wondering whether they might group together to start new business. We should be encouraging them determine their strategy in managing arrears or granting further credit,” he says. “The likes of Experian do not have such customer turnover data.” The IT infrastructure that underpins a large organisation like a building society is clearly one of Cutter’s pet projects. He prides himself that, thanks to Skipton’s slick operation, former Scarborough customers were able to access every part of the service from the first day after the merger in March. But the organisation also exports such expertise: its subsidiary, Bailey Computer Services, runs systems for five other building societies – all from the office in Skipton. So what does he make of Moody’s downgrading his organisation – and the implications their judgement has for the mutual sector as a whole? Cutter is particularly aggrieved that the agency – which he points out his industry effectively pays for – gave Skipton just an hour’s notice that it was being downgraded. Both he and Ward also argue that Moody’s assumptions about a 40 per cent fall in house prices are misguided at best. “In the light of recent evidence we see from our estate agency network, that is nonsensical,” he says, “and if it did happen, there would be more than just building societies affected.” The Scarborough merger, he says, has actually gone smoothly. “Three months on, I am delighted that there are no surprises,” he says. “Ratings agencies got it wrong on the way up, and over corrected on the way down.” But in fact it’s not Moody’s troubling either Ward or Cutter. They are far more concerned with the implications of the Government taking over Northern Rock and National Savings (NSI). “Some 70 per cent of net retail receipts in the UK in the second half of 2008 went to Northern Rock and NSI,” says Ward. “So we have an organisation that failed like Northern Rock that is now getting a guarantee.” He also has concerns about what he sees as disproportionately unfair terms for mutuals in accessing the Government’s Financial Services Compensation Scheme, aimed at freeing up the wholesale lending market. Both these issues are something the mutual sector will have to lobby hard on – although he admits that on the retail side at least they have already met with some success. NSI, he says, “will have a zero target this year”. On a wider scale, however, lobbying both for the mutuals and more widely for the whole financial sector in Yorkshire is something very much on the mind of Howard Kew, recently installed chief executive of the

Leeds Financial Services Initiative (LFSI). In the past year this organisation has finally won financial support to the tune of £3.2m from Yorkshire Forward, after many years of lobbying. So it has moved from being an organisation with one part-time chief executive paid for through subscriptions to an organisation with its own office and a seven-strong team. But Kew says the organisation could have its work cut out. A Deloitte report into the future of Yorkshire’s financial services commissioned by LFSI earlier this year suggests that, despite reassurances from Riordan that the industry has “a very bright future”, the fall-out from the past year means there could be serious problems ahead. In particular, there is a danger that unemployment in the sector could rise more than 5 per cent above the scenario being predicted. That could mean an extra 17,300 jobs being lost, with the sector unlikely to recover to its 2008 levels until 2018 at the earliest. Kew says his organisation is taking seriously the report’s suggestion that some work should be undertaken to help people who have worked in the financial sector who may be made redundant spread their skills to another sector. But he also believes there are opportunities out there within the sector itself, particularly given the impact of the Retail Distribution Review, which aims to make entry qualifications for people wanting to become an independent financial adviser not dissimilar to the first year of a university degree. That might put off people who are not far from retiring anyway, he says, and in there lies an opportunity. “Right now, there will be groups of people gathered around coffee machines at HBOS,” he says, “wondering whether they might group together to start up new business. “We should be encouraging them to do so. We could talk to existing businesses about whether such groups could all be let go at once. There might be some good news potential for the companies from that. Staged exits – for new beginnings”. n

BUSINESS QUARTER |SUMMER 09

INTERVIEW

BUSINESS QUARTER | SUMMER 09

SUMMER 09

INTERVIEW

COMING OUT THE OTHER SIDE Some big names may have gone, but others have survived. Mike Clarke assesses the Yorkshire property scene as it emerges from the credit crunch >>

BUSINESS QUARTER |SUMMER 09

INTERVIEW

SUMMER 09

All over Yorkshire and throughout industry, the chill wind of recession is bringing tough and unwelcome change. As in any downturn, there may be some winners, but property companies are among the hardest hit and most visible victims of what chancellor Alistair Darling’s April Budget confirmed as the sharpest slow down since the Second World War. Where once the skylines of Yorkshire’s cities were raked by high-rise cranes and the clatter of structural steel echoed amid the constant urban buzz, many prestigious schemes have now been mothballed and sites earmarked for landmark buildings lie silent, edged by anonymous hoardings as the world awaits economic recovery. The 12-year property boom which followed the 1990s recession came to epitomise economic strength, progress and innovation, with former industrial sites and vast tracts of land regenerated into city living schemes, business parks, retail and mixed-use developments and homes to meet the changing demographics of a country with a soaring divorce rate and rising numbers of independent elderly people. All this has helped change how property professionals are perceived. No longer just builders or developers, they are now seen as property entrepreneurs - some of them almost as iconic as the buildings they create - and, in an economy increasingly fuelled by speculative development, as barometers of business strength and acumen. But the rapid pace of economic decline since Lehman Brothers’ collapse meant many developers were caught on site with schemes rising from their foundations as the plans of potential occupiers and investors collapsed around them as credit markets seized up. Yorkshire’s developers and construction companies were hit badly throughout 2008 with one of North Yorkshire’s highest-profile developers, York House, Richmond, going under in November 2008. Then matters got worse, and according to a PricewaterhouseCoopers analysis into corporate insolvencies, 123 construction companies became insolvent in the first quarter of this year. Among Leeds’ best-known casualties has been

BUSINESS QUARTER | SUMMER 09

Long term: Irving Weaver says Strata has benefited from building up a strong balance sheet city centre developer KW Linfoot, which went into administration in February, blaming banks for `strangling’ the business. The company’s Lumiere scheme in Leeds and Manyoo Towers, Salford Quays, Manchester, are said to be unaffected by the decision and will be taken over by its joint venture partners. So, as UK unemployment continues to rise at about 70,000 a month and, with few exceptions, banks still not lending, how are Yorkshire’s property professionals weathering the recession, and what are they planning to do when the economy finally clambers out of the pit it fell into at the end of 2008? As the first confused messages about a potential credit crunch crossed the Atlantic in the wet summer of 2007, Doncaster-based Strata Homes, which was founded in 1989,

had an £80m turnover, 80 staff and was building about 600 homes a year throughout Yorkshire and the East Midlands. “From the mid 1990s, there was a strong housing market, we traded well and built up a balance sheet and a brand,” says Strata Homes chairman Irving Weaver, “and we were still on a growth span, right up until the Northern Rock crisis. “Like the rest of the world, we did not foresee the banking crisis, but we did know that affordability was out of line. There was a pause in the housing market in 2005 and, if lenders had stayed with their traditional principles at that time, the market would have had a correction, but not the catastrophic collapse which was to follow. “Through the next two years, the housing

When bad economic news came through in April, the economy just fell off a cliff. Then the demise of Lehman Brothers carved up the market

SUMMER 09

market was clearly showing the strain. Unrealistic land prices were a clear sign of overheating. We started missing out on competitive land acquisitions as we could not match some of the majors, although this has ultimately served us quite well.” Ironically, after a slow final quarter of 2007 following the Northern Rock crisis, Strata Homes enjoyed a recovery in the first quarter of 2008. “Then, when bad economic news came through in April, the economy just fell off a cliff. We started to see a bit of recovery in July and August last year, but the demise of Lehman Brothers just carved up the market.” At the start of the credit crunch, Strata Homes had 22 active developments. As the economy worsened, the company mothballed six and put them into storage, coming off site and stopping all costs. Revised sales targets meant budgeting for 20 sales per site rather than the usual 36. “We felt we could trade better

INTERVIEW

Weathering the storm: Strata Homes’ landmark headquarters at Quay Point, Doncaster under less pressure” Weaver says, and it became clear to Strata Homes, as with many other developers, that after Lehman Brothers’ collapse, the immediate future was about survival. “Between April and December 2008, we cut our business in half. We reduced

operating and building costs and overheads, including some redundancies, right down to re-using un-franked postage stamps. We established our immediate objectives as stopping all development spending with no cash going on land and urgently de-risking >>

FIRMS COULD SAVE MILLIONS WITH PROPER PROPERTY MANAGEMENT

ORKSHIRE and Humberside’s small firms could collectively save millions of pounds a year by managing their property assets better and achieving vital efficiencies in today’s challenging economic times. RICS (Royal Institution of Chartered Surveyors) says that property is a major outgoing for businesses and getting the right advice could significantly reduce that cost. “Otherwise, firms are almost certainly wasting large amounts of money unnecessarily,” says Colin Harrop, chair of the RICS Yorkshire and Humber regional board. “Property is the biggest business outgoing after staff and can be a major drain for firms if not managed effectively. We believe that, with small businesses in particular, property arrangements don’t effectively meet their needs, which is leading to resources being wasted. Employing experts and putting in place a tailor-made strategy for their property could save firms a

significant amount of money.” There are many ways that better management of property could optimise the use of space available, for instance by sub-letting or selling off unused space; renting premises rather than buying when market and funding conditions are difficult; negotiating advantageous rents at rent reviews and lease renewals; or challenging expensive service charges. Mr Harrop says: “RICS has campaigned for a number of years to raise awareness of the importance of property in business and to urge firms to get serious about their business premises. In the current challenging climate, when efficiency is uppermost in many business owners’ minds, getting serious about business premises has never been more important.” A survey carried out for RICS almost 10 years ago estimated that UK businesses were wasting £18 billion a year and could, on average, improve a business’s profitability by up to 13% through efficient management of property.

“We don’t think that situation has changed much,” added Mr Harrop, a chartered surveyor with King Sturge based in Leeds. “Some bosses are under the false impression that bringing in an expert will be expensive. In reality, the savings that a chartered surveyor can achieve by challenging the landlord and working on the business’s behalf will be far in excess of what are often only modest charges.” ,

To find a chartered surveyor in your area use the RICS online member directory at www.ricsfirms.co.uk, call the contact centre 0870 333 1600 or email contactrics@rics.org

BUSINESS QUARTER |SUMMER 09

INTERVIEW

SUMMER 09

We plan to sit tight and see where it unfolds. We fear it will get much worse before it gets better

our entire operation.” Now, Strata Homes’ target market of home buyers between their late 20s and 40s is facing short-time working, pay freezes, job insecurity and a tougher lending regime, all of which hinder househunting. Even so, Irving Weaver says Strata Homes is well placed to take advantage of steady growth when it returns. Among its active schemes are 50 homes at Barnsley and Retford, 230 at Mexborough, a 40-home regeneration scheme in Derby and a six-year development at Featherstone in partnership with Wakefield Council. “We have a three-year land bank with planning permission and lots in the pipeline through creating joint ventures with land owners rather than buying land, and sharing profitability as sales occur as the market improves,” says Weaver. “We fully support Government moves to prevent repossessions where possible and believe that ultimately, this will lead to a housing shortage, particularly as, even during

BUSINESS QUARTER | SUMMER 09

the boom years, development was falling short of agreed national figures in the industry as to what was required. The rest of this year and 2010 will be a very long haul, but at last we are seeing some stability.” Meanwhile, developers in North Yorkshire fared no better. “We were very busy and profitable at the start of the credit crunch,” says John Reeves, chairman of York-based Helmsley Group. His company has been behind scores of developments in York and North Yorkshire, most recently the innovative Eco Business Centre at Amy Johnson Way, Clifton Moor, which has brought sustainability into the budget of small ventures, and Sigma, a new headquarters for the Insurance Partnership, York. “We had seen some sort of downturn coming through the credit crunch and expected a reduction in development, but had not anticipated the ferocity of what has occurred. Development funding and property loans have totally dried up for us and our customers.”

Prepared: John Reeves’ Helmsley Group had been expecting the downturn Reeves adds that, while Helmsley has a healthy land bank, current market conditions make it unwise to develop speculatively, although a few small schemes which are pre-let or pre-sold are progressing. The swiftness of the economic decline was such that the company could not halt one scheme which has fallen victim to the Government policy of demanding rates instantly on empty commercial properties, although it is now under offer. So, what will Helmsley Group’s approach to the next 12 months be? “We plan to sit tight to see what unfolds. We fear it will get much worse before it gets better and now is not the time to be foolhardy. This is a time for preserving cash rather than spending. “Also, the empty rates policy is a killer for commercial development, even if times were better and, in our view, the ridiculous affordable housing quotas will stop residential development even when the better times return. We urge the Labour Government to open its eyes and see what damage these policies are doing if it wants to kick start the property markets.” Meanwhile in Leeds, Advent Developments, which was founded three years ago and has exploited opportunities created by buying vacant, often Victorian school buildings to refurbish as homes when PFI has funded new school premises was on the cusp of a growth phase when the credit crunch hit. >>

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INTERVIEW

SUMMER 09

Managing director Tim Reeve says: “While we expected the market to weaken, we underestimated, like everyone else, the severity and depth of this downturn. We had, however, set a key tenet in our business plan that we would develop high-quality, competitively-priced properties designed to appeal to owner occupiers rather than the investment market. “This has clearly helped our sales during this challenging period and enabled us to secure more than our share of the limited local sales activity. The key issue is lack of available finance and we are keeping our development programme under close review. The high barriers to entry placed on first-time buyers by the banks and building societies isn’t helping.” Tim Reeve believes that Advent Developments, which has a £20m development programme, is well placed to survive with its low cost base (only five staff) and a good land bank to be developed on a phased basis, although this has inevitably slowed down. He adds: “The market is currently very tough all round. Property suffered from the start of the downturn due to its reliance on capital markets, but it is essential that the housing market in particular continues to function. “The credit crunch does not stop families growing and needing to move, nor the elderly retiring and downsizing - particularly when we are told we face a decade of austerity. All this means there will be huge pent-up demand to be released when the market stabilises. “There is currently an unprecedented low level of new housing starts and all the indicators are that there is a national under provision of housing and this will have to be addressed at some point.” Advent’s policy for the next 12 months, he adds, is one of caution. “That said, we are optimistic that the market is improving, albeit tentatively. We are developers and we need to keep developing. Our programme will be driven in response to market sentiment, demand and the availability of finance.” At the time of going to press it was reported that insolvency specialist Paul Stanley, of Begbies Traynor, was investigating the collapse of KW Linfoot after it was claimed that the Peel subsidiary, Peel Investments (North) Ltd sought to force KW Linfoot into liquidation to

BUSINESS QUARTER | SUMMER 09

We are optimistic that the market is improving. We are developers and we need to keep developing

recover cash it claimed to be owed from a land deal at Salford Quays before the business went into administration in February. Founder of the business Kevin Linfoot declined to be interviewed by BQ. Latest reports suggest that various government rescue packages have averted a global financial meltdown, with independent economists, as well as the Chancellor Alistair Darling, predicting a return to tentative growth in the closing months of 2009. How strong and durable this will be, and how soon the UK will return to the 3.5 per cent growth Alistair Darling has predicted is open to debate, but clearly it will be too late for scores of schemes and hundreds of jobs in a region which has prided itself on the strength of its property sector. As those in the business say, the key is to sit tight and ride the storm. n

Developer: Tim Reeve’s Advent has benefited from converting old schools

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BIT OF A CHAT

SUMMER 09

going to brave Leeds traffic and cycle to work? - might actually finally have a use.

>> Green, green grass of property

with Frank Tock >> Eyup for t’gooseberry I was getting all excited about the Great Yorkshire Show as this launch edition was first going to press. Why? Because among the many items being launched this year is Yorkshire’s own Curry Cuisine’s Hot Gooseberry Pickle. Apparently, this has been devised as an alternative to traditional lime pickle, and I say full marks for that. Why bother going off to those fancy countries to pick a lime when you can pick a good old gooseberry instead? It’s high time we started eating more of them. Even our kids grow up nowadays fully exposed to the taste of mango and papaya - ever seen one of them growing on t’moors?

>> Allotted time Speaking of gooseberries, they might even come in useful in some parts of Leeds city centre these days. As you might have read in our commercial property news section this edition, work on much of the proposed West End development in Leeds has slowed so much that parts of the site are now being let out as corporate allotments. Full marks to those everresourceful guys in property (it’s Jeff Pearey from Jones Lang LaSalle, needless to say) for coming up with the idea - just think of the fun you could have in your lunch hour; just roll up your suit trousers, and off you go. And if you come back muddy and smelly, why, those nice office showers - you know, the ones the planners insisted on including for people who are apparently

BUSINESS QUARTER | SUMMER 09

It was good to hear so many property professionals waxing lyrical for this issue about how their customers need to address their corporate social responsibility and respect the environment by taking out a lease in the very latest ‘green’ building they are trying to flog. But I did find it amusing, partly because I also read this month about the chief executive of another property company - not, I hasten to add, in Yorkshire - who had even gone so far as to employ a sustainability officer full time to keep a watch on what the company was doing. And yet, when the two of them fell out and ended up at an employment tribunal, it turned out that this same chief executive flew a member of staff out to meet him in Ireland simply because he had left his BlackBerry behind in the office. Yes, you heard that right.

>> Fire walk with me The brave ones among you might be tempted to take part in the sponsored fire walk that is taking place at the Shine Enterprise centre in Harehills on July 25 (details on p82). It’s being led by Lisa Clifford, an advanced fire walker who is apparently known to have walked over hot coals 70 times in the space of 15 days, broken arrows in her throat (that sounds painful) and undertaken something called a Rebar bend - which involves bending a steel bar between you and your partner’s neck. Firewalking has obviously moved on from the early 1990s, when one ill-fated team at Eagle Star insurance ended up in hospital. You have been warned!

>> Office moves Philip Meeson’s revelation that the Jet2 office at Leeds Bradford airport is really just some prefabs from one of his other sites has really got me thinking. Why doesn’t everyone do that? Why, if we all just hoofed our building out of the ground and plonked it

down somewhere else, think of all the time we would save. And think of all the people we wouldn’t have to pay. But whoops, I better be careful. I might be talking an awful lot people out of earning money.

>> Full marks for effort What does a hard working man like John McDonnell, one of our interviewees this month, do in his time off? See more of his family is one thing. John says that is one of the things he has learned from his regular sessions with Vistage International. One of the work/life balance goals they have got him to set is that he will be home by 7pm every night. But on the weekends, John also goes in for something that the rest of us might find just a little bit too daunting: sportif cycling. This is road cycling, but not as we know it. It involves getting up at ridiculous hours of the early morning and agreeing to do mad and exhausting rides, such as Morecambe to Filey ... in one day! Apparently, one key event on this circuit is the Etap du Dales (don’t you love the way mixing la langue Francais with Yorkshire English just doesn’t quite work...?) John, who initially started doing it to shed some pounds, admits races like that can be painful. So painful, in fact, that to keep his mind off the exhaustion he feels and the many miles he still has to go, he finds himself focusing - back on business. Now that really is a clever way to maintain a work/life balance.

>> Hoots, man Joke from Richard Jackson, after speaking to a garrulous Glaswegian waiter: Question: What’s the difference between the New York mafia and the Glasgow mafia? Answer: One presents you with an offer you can’t refuse; the other with an offer you can’t understand. We hope you like our stories this month. If you have any funnies you wouldn’t mind sharing with other readers, please email them to editor@bq-magazine.co.uk

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EVENTS DIARY

SUMMER 09

BQ’s business events diary gives you lots of time to forward plan. If you wish to add your event to the list send it to: peterb@bq-magazine.co.uk

JULY

9 SEPTEMBER The Met Club – Yorkshire’s own networking club. 5.30pm7.30pm, Leeds Restaurant Bar and Grill. For details ring 01423 525 622.

25 JULY Sponsored fire-walk organised by Shine enterprise centre in Harehills. Come along and learn how to master your fears in a five-hour session hosted by professional firewalker Lisa Clifford. £100 to enter, with money going to the Leeds Refugee Forum. For more details ring Dawn Gledhill on 0113 388 0088 or email info@shineinharehills.co.uk.

8-10 SEPTEMBER. The National Floor Show. Trade exhibition. Harrogate International Centre. More details at www.nationalfloorshow.co.uk.

30 JULY Budgeting for improvement. A one-day workshop to help small business owners master financial documents. Devere House. £100 to enter, but funding may be available. For more details go to www.bradfordchamber.co.uk.

16 SEPTEMBER The Met Club – Yorkshire’s own networking club. 5.30pm7.30pm, Yo Yo Restaurant, Bradford. For details ring 01423 525 622.

31 JULY IOD Yorkshire Day celebration lunch. In association with Northern Rail, and now in its fifth year. £29.38 for members, £44.85 for non-members, tables of 10 pro rata. 12pm-3pm, York Racecourse. For details ring 0113 243 0152.

AUGUST 5 AUGUST The Ashes dinner. A special dinner to coincide with the Ashes introduced by Mark Nicholas with special speaker Andrew “Freddie” Flintoff. Saviles, Royal Armouries, Leeds. For details ring Richard Blakey on 07768 558102 or email richard@bluecrocodile.co.uk 6 AUGUST The Met Club – Yorkshire’s own networking club. 5.30pm-7.30pm, Hotel du Vin, Harrogate. For details ring 01423 525 622. 12 AUGUST The Met Club – Yorkshire’s own networking club. 5.30pm7.30pm, Leeds City Inn. For details ring 01423 525 622.

13-15 SEPTEMBER. Harrogate Bridal Fair. Trade exhibition. Harrogate International Centre. More details at www.bbeh.co.uk.

17 SEPTEMBER. Introduction to export. One day course held at Leeds Chamber of Commerce. £170 for chamber members, £190 for non-members. For more details go to www.bradfordchamber.co.uk. 17 SEPTEMBER The Met Club – Yorkshire’s own networking club. 5.30pm7.30pm, Hotel du Vin, York. For details ring 01423 525 622. 18 SEPTEMBER The Met Club Harrogate lunch. Venue tbc. For details ring 01423 525622. 25 SEPTEMBER Dealing with redundancies. One-day workshop looking at how to smooth the route to redundancy and still maintain team morale. Devere House, Bradford. £100 for members and non-members. For more details go to www. bradfordchamber.co.uk.

OCTOBER 1 OCTOBER The Met Club Leeds lunch. Venue tbc. For details ring 01423 525622.

16-18 AUGUST Lingerie & Swimwear show. Trade fashion exhibition. Harrogate International Centre. More details at www.lingerie-show.com.

1 OCTOBER The Met Club – Yorkshire’s own networking club. 5.30pm7.30pm, Hotel du Vin, Harrogate. For details ring 01423 525 622.

19 AUGUST MBA Taster event. An opportunity to find out more about what taking an MBA at Bradford School of Management actually involves. 6pm-8.30pm, Bradford School of Management, Emm Lane, Bradford. For more details ring Paula Ellis on 01274 236518 or email p.ellis@bradford.ac.uk.

7 OCTOBER Yorkshire and Humber CBI annual dinner. National Railway Museum, York. Main speaker is BBC’s Evan Davis. For details ring 0113 264 4242.

20 AUGUST The Business Growth Show. A chance to meet up with hundreds of other business people eager to learn about growing their businesses through workshops and seminars. Royal Armouries, Leeds. For details ring Elizabeth Glover on 0871 2223704 or email events@thebusinessgrowthshow.co.uk 20 AUGUST Make Cocktails and Make Contacts. A new approach to networking organised by Leeds Chamber of Commerce where there will be a range of cocktails to make and try to get the conversation flowing. Alea Leeds. £15 for members, £20 for non-members. For details go to www.leedschamber.co.uk.

SEPTEMBER 2 SEPTEMBER IOD Harrogate Business Breakfast – the future of the economy in Yorkshire. A talk given by Paul Fullerton, the Bank of England’s agent for Yorkshire. £17.39 for members, non-members £24.35. 8am-10am, the Academy, Oakdale Place. For details ring 0113 243 0152. 3 SEPTEMBER How to make the most of your networks – the second part of motivational series led by people development consultancy Primeast. Cardale Park, Harrogate. For details ring Rachel Sorton-Hall on 01423 531 083. 3 SEPTEMBER The Met Club – Yorkshire’s own networking club. 5.30pm7.30pm, Hotel du Vin, Harrogate. For details ring 01423 525 622.

BUSINESS QUARTER | SUMMER 09

7 OCTOBER The Met Club – Yorkshire’s own networking club. 5.30pm7.30pm, Restaurant Bar & Grill, Leeds. For details ring 01423 525 622. 8 OCTOBER. Construction Lunch organized by Bradford Chamber. Venue tbc. For details go to www.bradfordchamber.co.uk. 9 OCTOBER The Met Club Bradford lunch. Venue tbc. For details ring 01423 525 622. 14 OCTOBER The Met Club – Yorkshire’s own networking club. 5.30pm7.30pm, Yo Yo Restaurant, Bradford. For details ring 01423 525 622. 15 OCTOBER The Met Club – Yorkshire’s own networking club. 5.30pm7.30pm, Hotel du Vin, York. For details ring 01423 525 622. 19 OCTOBER Welcome to Yorkshire White Rose Awards for tourism. The biggest event celebrating the achievement of the tourism industry inYorkshire. Royal Armouries, Leeds. For details ring 0113 322 3508. 28 OCTOBER The IOD meets the Bank of England. A lunch talk by Tanveer Hussain, deputy agent in Yorkshire for the Bank of England. 12pm -2pm, 3, Albion Place, Leeds. For detaisl ring 0113 243 0152. Please check with the contacts beforehand that arrangements have not changed. Events organisers are also asked to notify us at the above email address of any changes or cancellations as soon as they know of them.

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LEEDS

Hotel | Bar | Brasserie

1 Swinegate, Leeds, LS1 4AG