Doubling down on our commitment to a carbon positive business - Andrew Pullen, CEO Vortex Leisure, owners of Spa World
What are the challenges of being a supplier? We’ve got the retail side of our business, which is Spa World, and we’ve got the product side which is Vortex and Fisher. We distribute Vortex and Fisher products to around 20 countries around the world, right through Europe, Scandinavia, the UK, Canada and North America.
Could you give AQUA readers a brief overview of the history of Spa World? The current owners have owned the business for twelve years. Over that time, Spa World has gone from a small regional spa retail group to the largest spa retailer in the world by revenue – according to two of our American suppliers who know the industry worldwide. So it has been quite a journey and that has most recently been amplified by the impact of COVID as the whole industry world-wide has benefitted by it also. So Spa World has a total of 15 stores across Australia and New Zealand, in all the capital cities of Australia except Darwin. In New Zealand, we are in Auckland, Christchurch and Nelson. We have plans to open another five stores over the next couple of years, so we are expanding. Total team size in our retail distribution business is 87 staff, spread across four countries – Australia, New Zealand, Canada and China. We own all of our stores except for two in Tasmania that are run by a licensee. We are truly integrated vertically in that we control our factory in China which is run on a joint venture basis. We own all our own retail stores, so we import products and sell them through our retail stores. We service clients through our spa store online parts and consumables business post-sales. Many of our clients have been dealing with us for more than a decade.
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The Spa World brand has been around for thirty-five years, but our growth has come primarily over the past twelve years under the current ownership structure. In that time, we have grown by a factor of ten and that trajectory is showing no signs of slowing down.
And how about your journey within the pool & spa industry? I always say that I started in the industry in 1979 when my parents became one of the first retailers of Hot Springs Spas in New Zealand. They had a spa business based in West Auckland called Hot Spot. I was nine at the time, so right through my teems, my after school job was installing spas and vinyl-lined swimming pools. I was involved in pools and spa from a very young. I then went and did an ‘Overseas Experience’ and came back to New Zealand in the mid-nineties and was involved with a company called 4 Seasons Home and Leisure, which still exists today. I became the General Manager of that business in the year 2000. We originally sold LA Spas out of the US through 4 Seasons, then moved into spa manufacturing through the early 2000’s. I then got into the sauna business for a couple of years, then came back into the spa industry with Monarch spas, then Spa World. In 2009, I became the General Manager of Spa World, then the CEO of the parent company Vortex Leisure in 2015.
At the moment, absolutely! We follow the supply chain that starts with raw material production. The demand for spas has more than doubled in the past year and that puts tremendous pressure on the raw material suppliers, because the spa industry is competing for raw materials with other producers of consumer and industrial goods. The boat manufacturing industry for instance is many times the size of the spa industry, and the spa industry has to compete for resins and other plastics products with the boating industry, amongst others. So we’ve got competition in our supply chain, we’ve got shipping problems from the raw materials supplier to the point of manufacture. For example, a big part of our manufacturing happens in China, but a number of the components are produced in America. So that product needs to be shipped from America across to China, and in some cases we have been air freighting raw materials to meet production demand. We’ve also got capacity issues at the point of manufacture, wherever that is in the world. So increasing the size of production facilities to accommodate the extra demand. There are also significant challenges with shipping the product from point of manufacture to point of sale. In our case, from either North America to Australia or New Zealand, or China to the rest of the world. Freight prices have increased six fold over the last year, so that has put real pressure on pricing. We have seen a lift in prices across the industry by 5-10%.
