Going hell for leather
Ben Staerck is going places – literally. While the business he started with his father when in sixth form spreads across the world, he too is moving from where he has spent all his life – the North East of England – to oversee expansion into one of retail’s biggest names, Harvey Nichols.
It is a big move for the 30-year-old and his wife, Charlotte, buying a house in London, but he has no intention of relocating the headquarters of Furniture Clinic and Handbag Clinic from Newcastle even though it has outgrown its current premises.
“I am fortunate to have a good management team in place at Furniture Clinic – the place runs itself,” says Staerck. “My job is increasingly looking at new opportunities to take the business forward. Handbag Clinic on the other hand is growing very quickly. Most of the business comes in and from London so I will be better based there to drive it forward.”
Furniture Clinic manufactures a unique range of leather cleaning, repair and restoration products used in many industries including furniture, automotive, clothing, handbag, luggage and many more. It mixes and blends specialist chemicals, paints and dyes to achieve safe to use and effective products in the 16,000-square foot factory on the Hobson industrial estate near Newcastle and can produce up to 1,000 bottles per hour.
More than 20 technicians work from strategically-located workshops throughout the UK, offering a repair service to many companies that need nationwide coverage such as furniture manufacturers, car dealerships and removal companies. The service covers leather, fabric and wood on items such as furniture, car interiors, upholstery, clothes, footwear, handbags, and luggage.
Handbag Clinic has four stores throughout the UK where customers can bring in their handbags to be cleaned or restored with new and used handbags available to buy. The two companies currently operate as one with 65 staff, a turnover of £4m growing at 30% a year and still maintaining the family feel – Staerck’s brother, Adam, is training manager for Handbag Clinic, while Charlotte operates the retail side of the business.
“It is a really exciting time,” says Staerck. “We have opened the first concession of Handbag Clinic in Harvey Nichols in Manchester, quickly followed by Knightsbridge. We have a new store in Qatar and plan to open another one in Harvey Nichols Qatar in late summer to go with our stores in Chelsea and Islington.
“I am really confident it will generate great sales for the business. Although we have stores repairing a lot of bags and we have a good name and reputation, some customers are reluctant to pass over a £2,000-£3,000 bag, something that they love, and trust us with it.
“Having a shop affiliated with Harvey Nichols is going to give customers that confidence and so will help increase sales across our stores. Our plan is to open retail outlets in all Middle East cities and ship the bags to Qatar to be repaired – in the same way in the UK that they are shipped back to Newcastle from across the country.”
While much focus on growth is on Handbag Clinic, Furniture Clinic and product development is not standing still. Having made mistakes with franchising in the past, Staerck believes the lessons learned mean it can be a way to successfully grow the business.
“Furniture Clinic can grow much bigger than what it is,” he says. “We can control the growth of Handbag Clinic by opening more stores whereas with Furniture Clinic it is finding more corporate customers, overseas partners and we can’t make that happen quickly. Having said that, we are opening franchises in Germany and Bulgaria to drive growth – especially Germany where they use a lot of leather in cars and homes.
“We have recently set up with a partner in Saudi Arabia and we are working with them to distribute the products across the Middle East. In England, we franchised the concept of repairing furniture in people’s homes and set up 20 branches but some didn’t have the same principles as us – everyone was competent and offered a good service but when something went wrong they didn’t handle it the way we do in Newcastle so we slimmed it down.
“I was 21 and willing to sell to anyone as it was easy money – I went out and bought an Aston Martin – but we stopped doing domestic franchising due to issues with customer care, although we have relaunched using an expert in the field. We will be very picky who we take on board, learning from last time, and they will all do it our way.”
The business has come a long way since his time at Whickham Comprehensive School in Gateshead, where the idea for Furniture Clinic was born. His father, Keith, had a business where he took leather cleaner and wood cleaner around the UK, demonstrating it at car shows, county fairs and events like the Ideal Homes Exhibition.
“I tried to encourage him to get people to reorder from us direct via telephone or post,” says Staerck. “I then learnt how to build a website while at school, promoting the products, using search engine optimisation, selling on eBay and I built it up to £10,000 a month in sales while in sixth form.
“We were making the products at the house and selling online so it was almost all profit. I thought ‘What can I do at university where I will end up earning over £100,000 a year?’. It was pretty simple, so I decided not to go to uni. Unfortunately, I have not maintained that type of profit margin but I have no regrets.”
In 2012, Staerck took on the role of managing director from his father and continued to oversee impressive growth. “The business has always grown very well naturally – we offer a good product and service that people need,” Staerck says. “When we first started doing it, we were pretty much the only ones in the UK – lots of people do it now – but we have almost created an industry in the past 10 years. People are aware you can clean and repair leather whereas years ago, especially on the repair front, they were most likely to chuck it out and get new.”
Of course, expansion across the world comes at a time of political uncertainty but it is not something that phases Staerck, though he admits opening stores in Europe is something he will not do until the outcome of Brexit is known.
“Unless we get an awful deal, I don’t think the outcome of Brexit will ever prevent me from doing business – we already do business outside the European Union (EU) where there are custom duties and taxes to pay,” he says. “Free borders are important to me – I am not sitting worrying about something I can’t control – but it will prevent me opening a store in Europe until we know the terms. The cost of setting up a new repair centre with people you can trust in Europe would run into the hundreds of thousands.
“For every store opened, we recruit four people at Newcastle – we can probably open 10 stores in England so we would be looking at 50-100 in Europe, which is 200-400 potential jobs on Tyneside.
“The workforce has built up knowledge and skills – Furniture Clinic is such a specialised thing we do, it doesn’t matter where we are. People come to us, we ship it to them, location is not as important as it once was, but the skills are in Newcastle.
“We had a guy who drove his Rolls Royce up from Kent to have the leather restored and one from Nottingham to refurbish a double decker bus – even now we get car interiors and furniture from Europe.
“It is so easy to ship something into Europe. We set up a French website for Furniture Clinic a year ago and this month it will do €10,000. We make all the products in Newcastle and ship it out there – that’s why post-Brexit it has got to be free borders. If we don’t get that it will be a pain. Germany and Bulgaria might not have happened.
“Being close to the market is extremely important and it’s the same for Handbag Clinic – we want to open our own stores in all the major European cities and ship back to Newcastle for repair. We can send a 20kg box for £7 from Newcastle to Germany, France or Belgium but it is £36 to Switzerland for the same box. If we get the same deal with the EU as Switzerland has then it makes the expansion very difficult – I will have to consider opening a repair centre within Europe, which has an impact on future employment in Newcastle.
“My own company in the United States and a joint venture in Hong Kong were instantly successful because they do it how it is done in England so there is now a franchise package following this model that will hopefully drive further international success.”
Furniture Clinic has a store in New York and the States is a market in which Ben sees great potential. “We are launching a range of products for leather crafters who make small leather goods and carve intricate patterns – dyes, finishes and paints to customise products,” he says. “In England, there is about £100,000-worth of business but I believe in the States the value is US$10m-plus.
“In researching it, I found one chain has 200 stores supplying knives and tools for people who make things out of leather – the cowboy culture – creating things like gun cases, knife sheaths and customised saddles. We have recruited a couple of sales people for business-to-business and are looking to establish new bases.
“We can ship anywhere in England for a fixed price but can’t do that in US – the shipping fees vary – ultimately we want three centres in the States, one for east, one for west and one for the bits in the middle, which is how mail order companies work to offer customers the same shipping fee across the country, and allows us to be competitive.”
Staerck has picked up numerous awards, including being named North East young business executive of the year and scooping BQ’s national emerging entrepreneur of the year title. He will be spending three weeks of the month in London, coming back to Newcastle for sales and management meetings, and remains focused on growth.
“I want to be more removed from the day-to-day business so I can focus more on strategy – I like to come up with the ideas to grow the business,” he says. “People come to me with problems that they can fix themselves or someone else could when I am not here but because it is my business it is difficult not to do it myself. We will eventually create a more corporate structure, there is potential for Furniture Clinic and Handbag Clinic to keep getting bigger and bigger.
“I keep seeing opportunities to do business and I enjoy doing it. If I have got something I want to do but not the finance and manpower I have sleepless nights. What really drives me is seeing an opportunity and not doing anything about it – I have to move on it.
“The steepest learning curve has been not to jump on the ideas as quickly, slow down, research them – the business has lost money trying to do things that haven’t worked as well. Most things I have tried haven’t failed but, because I have been doing three or four things at once, it has taken a lot longer for the original idea to become profitable than if I had prioritised and concentrated on one idea at a time.”
Staerck is certainly one man going hell for leather to ensure his business is a great success.
Published: 05 July 2017