EDITOR’S COMMENT: Distributor disarray

Kitchens & Bathrooms News Editor,
Philippa Turrell

Just what is happening to the distribution business? First AWA Bathrooms announced its intention to stop trading from December 2012 and now tc bathrooms has gone into administration. We all know the market is tough out there – but that tough? And is it the only plausible reason for distribution companies to be suffering? While we all know the economic climate is far from easy, has it just continued to exacerbate issues already taking hold in the distribution sector?

Of course, distributors could be more open to economic pressures than any other business, with spiralling petrol costs causing logistics to soar. But, equally, perhaps a clue could also lie in a comment made by joint administrator of tc bathrooms, Hunter Kelly from Ernst & Young, which, in addition to the economic climate, stated tc bathrooms had “been unable to service the debt taken on to fund its recent consideration expansion”. So, are in fact, distributors in danger of trying to extend their business just too far?

AWA Bathrooms was a regional distribution outfit, servicing the South, before going national and opening (then subsequently closing) a Northern depot in Manchester. And in a recent interview on kandbnews.blogspot.com, chairman of Swift Electrical says distributors now offer too many brands. It points to distributors seeking to become generalists, rather than specialists, in order to gain a larger slice of a smaller, and (some may say) diminishing, pie.

And, then, there are retailers looking to enter the distribution market by sourcing their own goods from overseas, in a bid to gain a USP and to prevent customers from ‘like-for-like’ shopping around. The demarcation lines of ‘who does exactly what and where’ in the bathroom and kitchen industry have become increasingly blurred, if not completely removed.

So what are the answers for bathroom and kitchen distributors, which are not only in competition with businesses in their own channel, but perhaps now even selective retail showrooms? Well, that’s the $1million question.  Could it simply lie within the old adage “turnover for vanity, profit for sanity”? Undoubtedly (as in the case of tc bathrooms), a catalogue of issues can drive a business into administration. But with news that parties are already interested in buying tc bathrooms, let’s just hope that this distributor can be saved and show it’s not game over for this sector.

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