US home and office furniture supplier, O’Sullivan Industries, has sold its European operation based in Milton Keynes to its European management team. The buyout was led by managing director Andy Dunkley, sales and marketing director Carl Baines and finance manager Tara Elsley. All three have solid OP backgrounds with Newell Office Products and Sanford.
Andy Dunkley, a former VP of the finance division at Sanford, described the agreement as an ideal solution for both parties. "As distributor for O’Sullivan we can offer the most appropriate products from an already established range, but we also have the opportunity to offer a broader product strategy than is needed by the US business."
The new company, DBE Products, will become O’Sullivan’s official European distributor. But what are the benefits of this breakaway? To find out more, OPI+ spoke to DBE’s Baines. He was previously international business manager at Sanford Europe before moving to the role of general manager at Newell Rubbermaid. He believes the MBO will allow the business to fulfil its potential. "We had been trying to force-feed American-designed product onto customers that were looking for European designs that their consumers wanted.
"O’Sullivan is a $300 million turnover company in the US and its focus is quite rightly on the North American market. Rooms and homes are bigger there, designs and tastes are different to those in Europe and, as a consequence, we were only able to take on about 10 percent of the production that was available to us from the region. This meant we had some pretty big gaps in our portfolio. After some discussion Alan [Dunkley] and the team proposed a buyout of the European business, with the European team acting as the exclusive distributor for O’Sullivan, so it would have continuity on this side of the Atlantic."
So a new company was born. And one that is trying hard to be different. Not all of DBE Products’ customers have warehouse and distribution facilities so it’s Baines and the team’s aim to plug these gaps too. This means delivering direct to the consumer or even storing products in its own warehouse at the Milton Keynes HQ.
Baines said: "One of the big things in our industry is differentiation. At the moment, people tend to buy on a number of factors: price, design and the one element that is never really seen but is felt — service. We felt that in order to set ourselves apart from our competitors we needed to put extra emphasis on the service element. Service by being flexible to meet our customers’ needs."
The firm is aiming to capitalise on the latest OP goldmine, the home office market, which throws up its own particular issues for furniture suppliers. The high rents wanted in London and elsewhere in Europe are forcing companies to relocate to cheaper areas, downsize the space people work in and encourage teleworking.
"Many companies are choosing to give their employees a cash contribution towards their own furniture and technology which means they are more likely to buy their office furniture from High Street resellers," said Baines. "Staples is a very important client for us because of its position as the largest High Street reseller — other than Argos — for furniture for the home. It’s an increasing aspect to our business."
With a sound business plan and the backing of an established manufacturer it appears that the company has an enviable foundation from which to develop its European operation. Competitors would do well to take note — DBE Products is on the march.
See also OPI‘s August issue for an in-depth look at global office space and the impact of increasing rental costs on the OP and office furniture market