In the Press: Bouncing back from disastrous effects of recession

When the economic downturn hit the UK, J Rotherham was among the casualties.

The fourth generation family-owned stonemasons lost its largest client when furniture and kitchen retailer MFI went into administration in 2008. Turnover halved almost overnight and it was forced to make 75 of its 145 employees redundant.

However, J Rotherham managed to pull itself back from the brink and embark on a remarkable turnaround.

Sales are expected to be £16.5m this year, more than treble the £5m reported at the height of the recession. Staff numbers have risen again to 171, and the company is one of the biggest businesses within its agricultural community in Holme-on-Spalding-Moor, East Yorkshire.

“When we lost MFI, the business fell off a cliff and we had to make many difficult decisions on how to take the business forward. We desperately needed to find new markets to move into,” says Matt Rotherham, who took over as managing director earlier this year.

J Rotherham was set up by Matt’s great grandfather in the 1920s, specialising in stone flooring, features and fireplaces. As the company passed through the generations, the firm expanded, offering marble bathrooms and bespoke kitchen worktops.

Major commercial projects included kitting out the Celtic Manor Hotel in Newport with more than £1m of marble, and undertaking extensive decorative work for the eight bathrooms and two staircases on board the Saudi Royal yacht ‘Prince Abdulaziz’ in the 1980s.

The company’s work can currently be seen in Horndean, Hampshire, where it recently created a war memorial depicting Nike, the Greek goddess of victory.

In recent years, J. Rotherham has also helped establish the market for granite worktops in the UK; and bespoke kitchen furniture and worktops now account for a large proportion of sales.

The company has created partnerships with new retailers including Wren Kitchens, another family-owned business that was set up in 2009 and has become a major supplier of kitchens in the UK.

“We learned that partnering with the right type of company is critical. We also had to look at all our manufacturing processes, finding ways to cut costs at scale back at the same time as boosting productivity. Fifteen years ago, revenue per employee was £56,000 and now it’s at £96,000,” says Rotherham.

Stone masonry is one of the UK’s oldest crafts, and the techniques used by J Rotherham are centuries-old. Yet the company has brought its manufacturing processes up-to-date by installing a seven-axis robot as an assistant to the stonemasons, similar to those used in car factories.

“From our perspective, we see huge opportunities for a renaissance in UK manufacturing. George Osborne has talked a lot about the march of the makers and we’ve definitely benefited from some of the measures he’s introduced,” adds Rotherham.

This includes the Annual Investment Allowance, which allows businesses to deduct the amount they spend on machinery and equipment from profits before they pay tax.

However, Rotherham says he’s disappointed the limit is being reduced from £500,000 to £200,000 next year and he fears it will lead small manufacturers to hold back from investing in new equipment.

Nearly all of J Rotherham’s team of sculptors and carvers trained at the company. It takes several years to become a master stone crafter and J Rotherham typically takes people straight from school.

The stone industry is relatively niche and there is a shortage of experienced stonemasons across the UK. Rotherham says that in any case he prefers to train people from scratch to keep consistency across the business.

“We do struggle to take on people that have already worked in the industry, because of our location. But local teenagers are eager to learn and we train from scratch on formal apprenticeship programmes,” says Rotherham.

There are no formal qualifications required, although the best ones will be able to recreate an intricate drawing into a stone replica from eye.

The UK is the company’s dominant market but Rotherham is hoping exports could take the business forward under his ownership. The firm has worked on individual projects for customers outside the UK, but Rotherham plans to establish regular sales in lucrative markets such as the US.

He added: “The recession has raised awareness of the ‘Made in Britain’ brand. Pre-recession, stone fireplaces were more likely to be imported from China. Now, people are more appreciative of the fact they can be made in the UK at a good price.”

– J Rotherham is one of four family firms competing for the Telegraph’s Festival of Business award. The other finalists are Beechdean Icecream, sausage makers Heck Food, and Morgan Innovation and Technology, a manufacturer of medical devices.

The winner will be announced at the Telegraph Festival of Business on Tuesday in London.

Source: The Telegraph

Author: Elizabeth Anderson