US home and office furniture supplier O’Sullivan Industries has agreed to the sale of its European operation in a management buy-out deal. The successful consortium was led by Andy Dunkley, the serving managing director of O’Sullivan’s Europe division.
The team, which also includes Carl Baines, sales and marketing director, and finance manager, Tara Elsey, is a pool of OP industry experience as the trio all worked together at Newell Office Products.
The new company, DBE Products, will become the official European distributor for O’Sullivan office and home furniture and has already commenced on a programme of improvements and investments in warehousing, distribution and logistics at its UK base in Milton Keynes.
The newly-acquired firm has also strengthened its sales, marketing and finance functions as well as its customer service division.
Andy Dunkley, a former VP of the finance division at Sanford, described the agreement as an ideal solution for both parties. "As a distributor for O’Sullivan we can still offer the most appropriate products from an already established range, but we also have the opportunity now to offer a broader product strategy than is needed by the US business," he said following the acquisititon.
In an interview with OPI, Carl Baines, said he was excited by the acquisition and believed the MBO will allow the business to fulfil its potential.
He said: "We had been trying to force-feed American-designed products 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 ten 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 Andy [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."
And one that is trying hard to be different. Not all of DBE Products’ customers have warehouse and distribution facilities so it’s the new 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."
And Andy Dunkley added: "We have already set up and established partnerships in the Far East and across Europe to give us access to a wider product portfolio. We intend to increase our sourcing partnerships to offer a full product line in laminates, melamine, veneer and real wood. This will allow us also to extend the product offering to new materials for new market segments and other furniture categories depending on customer demand."
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. It’s clear DBE Products is on the march.
