Marketing director Owain Harrison talks about rebuilding the brand in the UK
Q: Baumatic seemed to be a strong business in the UK, so why did it fall into administration?
Owain Harrison (OH): Baumatic had been such a success story and grew so fast, and hit the market with the right product at the right time, the owners decided expansion was the next obvious step. After 13 years of solid UK business and a buoyant Western European market, they expanded very quickly – opening offices in France, Benelux, the Netherlands, Germany, Czech Republic, Slovenia and Slovakia. This very quick expansion, over a five year period, required a level of borrowing and to use a cliche the roots just weren’t deep enough when the storm hit. The UK was a highly viable market for Baumatic. We were one of the fastest-growing brands in cooking and had all the barometers of a healthy brand. But fundamentally when the European business failed, the UK tried to adopt the debt to the common suppliers and it fell into administration.
Q: Yet within a month, Baumatic had been bought by Hoover Candy…
OH: A white knight rode in! Speed in these things is so important and Hoover Candy paid a reasonable sum for the brand [around £1million]. They could see the brand DNA and value to it. They now have three brands which have three different market appeals.
Q: Going forwards will Baumatic be the same brand as it was in 2013?
OH: I’m delighted to say, it’s the same industrial design team. It’s the same graphic team. It’s the same product team, marketing team and it’s the same sales team. So, all of the front office that defined the brand is still there. But we now also share all the administrative and service elements with Hoover Candy, which is an advantage for us really because they are such big brands.
Q: Has Hoover Candy put a lot of investment behind the Baumatic brand?
OH: They most certainly have, not least finding a new home for the brand. We are about to move to a beautiful glass office about 500m from the original premises. It will have a dedicated showroom of 2,000sq ft and 2,000sqft of office space. Obviously we still have the service division based in Bolton and we still have our central offices in Merthyr and Bromborough to complement Hoover Candy’s other office. They have fully trained their 170-strong service team on the brand, integrated all our systems and created a brand new website for Baumatic, which can be used on mobiles and tablets. We’re going to be featuring a find a retailer function on it, which uses GPS, so it accesses where you are and it can tell you where your local retailers are and what they’ve got on display. We’ve just launched an activity campaign for Sirius members, which is all about value-added products. We have put a campaign out in consumer press, promoting some of our go-to products, in range cookers, wine cabinets, premium cooking products, and extraction, listing the retail partners taking part in the activity as well.We were also at the Sirrus conference which was the first time the brand Baumatic had been out with Hoover Candy and we will back out onto the show exhibition circuit in 2015. So there has been an awful lot of below the line investment this year, and there will be above the line investment coming through in 2015.
Q: What can we expect to see in terms of products from Baumatic
OH: The brand’s gone back to basics, in the last year, as we remembered what made Baumatic successful. The big focus areas for us will be range cooking, wine storage and premium cooking. We have a very established range of built-in products. Baumatic was made famous for being one of the first brands to embrace the range cooking phenomenon that took place 25 years ago and the stainless steel phenomena of the 1990s, so really it’s about remembering our heritage but also having one eye on the future. We are working on some new products to add into the range in 2015, which further complement the built-in story. Next year, our big goal is integrated products and we’ve got some dishwashing and some new cooling coming through.
I think there is definitely room for Baumatic to further stretch its brand credentials in premium cooking and I genuinely believe the retail market is interested in a ‘third choice’ and something different. Baumatic has established itself in the premium part of the market in range cooking and luxury cooling. So, really, it’s about stretching that into built-in cooking as well. It will become more of a priority as we want to give the kitchen studio market the products that they are best placed to sell.
Q: Where will be the sales opportunities for the brand?
OH: The replacement market is obviously a growing channel and proportionately has been the faster growing channel through this global financial crisis we’ve been through. It’s time now to recognise that first installation is going to come back and the great thing is when we had that buoyant housing market, then it tends to cascade into the kitchen studios as well and they see more activity which is fantastic.
Q: Looking at all the recent entrants into the UK major domestic appliance market, from those that specialise in appliances to large consumer electronics groups, how do you see Baumatic competing?
OH: You have to have a raison d’etre for your positioning and for your brand to exist. I know people like Panasonic have come in with a very defined market position. They have a global strategy and they see built-in and kitchen as part of that strategy. But we have a very defined brand positioning. We have a reason to exist. Baumatic is well loved for being slightly more daring and individual and, thanks to our new parents, we can continue that because they see the value in the individuality of Baumatic.
Q: Because you’re been so forward-thinking will you be looking at connectivity?
OH: Absolutely! Finally, I think technology has caught up with the aspirations of manufacturers and they will be able to deliver more connected appliances. I think there will be brands that are first to market with connectivity that is meaningful and not gimmicky. Brands that are going to deliver meaningful connectivity will be ahead of the curve. I have to remain tight-lipped but we do see meaningful connectivity as very interesting and required.
Q: What about the internet? Are Baumatic appliances available online and how can the issue of discounting prices ever be resolved?
OH: We see a flattening out [of prices] where in some of the high street retailers, there simply is no difference between the price offered online and in-store. I think it’s great for the consumer. They get to choose whether they want home delivery, click and collect or go to somebody and get that brand experience first-hand. Showrooming gets spoken about a lot but I think service is the parameter and the bench mark rather than price.
Baumatic is multichannel. When you look at a third of the appliance industry being performed and carried out and transacted online you have to be part of that but we have really good online partners, as well as independent studio partners.
Q: Where is your business at the moment and where would you like it to be in two years?
OH: The great thing is Baumatic is now playing in its heartland, where it was born. It’s extremely strong with independents [300 retailers] and they have been very loyal. We have a growing business in kitchen studios, which obviously is a target market, and contract with new house build. We have national partners, as well, and for them the story has been pretty compelling. They’ve also remained very loyal to the Baumatic brand. We see the opportunity coming from channel diversity.
I think now Baumatic has the opportunity to deliver on the potential it always had. The new owners are totally committed and see the value in the brand and a nod has to made to the old owners who created that value in the first place. I see having the desire to fully reach the potential is now within sight, whereas before it may have been a longer term strategy.
We see Baumatic as having the potential to regain the majority of the market share it had before change of ownership and it’s well on track for that. The Hoover Candy ownership has already seen it double its market share third quarter from first quarter.
Q: How can you allay retailer fears Baumatic won’t have the same problems as it had last year?
OH: I think we’ve got the benefit of having a business behind us now that was founded in 1945, that’s a strong, profitable, credible parent. We really can’t underplay the strength of Hoover Candy. I think the market seems to be improving. There are positive indications out there from the independent sector that things are finally getting better. We have ridden through this turbulence and come into a period of growth with the right product, the right backing and the right plan.
The full interview appears in the November 2014 issue of Kitchens & Bathrooms News.