No news is good news

Published on: July 10, 2012

Andrius Minicius is the managing director to Qualita, a manufacturer of quality Lithuanian furniture that distributes in the UK from London. Andrius has undergone a difficult journey since entering the market, but thanks to a strong philosophy and a competitive edge Qualita is flourishing…

No News is good news

How did you get into the trade?

I got into the trade by pure chance. I was doing my Bachelors in Economics at the Stockholm School of Economics in Riga, and desperately needed a year off to do something completely different. My brother had a sawmill at the time, and he had also worked in the UK a few years before. He said I could go to London and try to find clients to buy the pallet timber that he was manufacturing in his sawmill, or potentially even get some clients to buy construction timber.

The idea sounded different enough from doing another year at the university, and I decided to risk it. However, I could not sell timber or pallet planks or anything for construction, as the market was too competitive, with too many big players.

Time was going by and we still wanted to do something, so we decided to open a small shop and try to retail various interior details such as cladding, skirting boards, beading and flooring, and some standard furniture that we would buy from Lithuanian factories. A small shop was established in Battersea.

What was the most important turning point in your career?

We managed to acquire a large furniture factory in Lithuania that suffered cash-flow problems. We managed to revive the company with the cash that we had accrued selling bespoke furniture, and established a strong manufacturing/wholesaling arm alongside our bespoke service.

How do you think the industry will evolve?

It all depends on consumer expectations, which are partially formed depending on the fiscal and monetary policy the Government undertakes, but more importantly by what the media says and the overall mood in conveys.

Rising income tax, higher VAT and increasing interest rates are negative indicators for consumer spending, but the more media talks about it, the more people hear it, read it or think about it, the more reluctant they become to spend. Overall, believe the following year will be a struggle and consumers will hold off from spending a lot of money on relatively expensive items such as furniture.

How can retailers increase sales and profitability?

In the growing era of online retailing, bricks and mortar retailers must make a clear point of difference for every client that walks in through the door. Every purchase from a high street shop must be an experience for the end-consumer. Customers have to appreciate how much added value they get for not buying online.

What can retailers do to improve their marketing strategy?

It is very difficult to say what one can do to improve, but having the experience that we have in dealing with multiples and independents, I think it is easier for me to say what an independent should definitely not do – and that is to consider sales as the way forward.

Only big multiples with substantial margins can afford to have 30-50% off all year round and still make enough money. Sales do bring people in, and the first few months may seem really great, but the reality is that the longer you stay on sale, the less likely people are to buy from you if you come out of it.

Sales are necessary, but in moderation. Two times a year is quite enough to sell to those who cannot afford the full price or are in no hurry to buy.

What are you doing to become more competitive at the moment?

We started targeting multiples and independents directly only about two years ago, and since then we have tried to be innovative and see what the companies really need to satisfy most of the consumers’ needs. Our competitive edge comes from offering a completely bespoke service for our smaller independents as well as multiples.

Do you have any tips on upcoming furniture trends?

Oiled and lacquered oak have been going on for a while. It does not seem that the customers are getting bored with the same look and finish yet – however, painted base and oiled/lacquered tops for bedroom and dining pieces seem to be coming into fashion.

Oiled shelving units with coloured doors and drawers seem to be quite a hit this year. Currently, customers prefer the chunky but clean look, and practically are of utmost importance – extensions have to store under the tables, drawer runners have to be smooth to open and close, and storage/shelving pieces have to be modular enough for clients to put their own storage walls together and not waste any space.

What brings a smile to your face working in this industry?

I always find it fascinating how small and interconnected the furniture industry is. People move from company to company, from one position in the furniture industry to another. There is a limited number of retailers and they buy from a yet more limited number of wholesalers and manufacturers.

So many people in the industry know each other by name, and a lot of business is done through word of mouth and mutual trust. Coming from Lithuania, I thought the UK furniture industry was immense – but having spent eight years in the market and only two years wholesaling directly, I realize that although the industry turns billions, the people in the circle are just one large family.

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