Blue Diamond is the second biggest garden centre chain in the UK. The Channel Island based business has recently gone massive expansion, and now has almost nationwide coverage. Garden Centre Retail catches up with Managing Director Alan Roper, who has experienced COVID-19 first hand, to find out what the business has done regarding coronavirus, what their plans are once lockdown rules are relaxed and how it’s affected the turnover of the business.
Blue Diamond, unlike many other garden centres, were very quick with their response to the government enforced shutdown. As each of their stores closed their doors for the foreseeable future, Alan swiftly launched a home delivery operation. He explains: “I didn’t take the view that this would be a three-week shutdown. At the moment, the earliest we can expect to open is two months from the shutdown. I mobilised the home delivery and looking at the sales including VAT because it’s about cash coming in, we did £1.7m last week.”
This is, according to Alan, a welcome figure. The business was projected to make £5.7m in sales for that particular week, but as Alan said, that £1.7m could make the difference in the fight for survival. Even more impressively, it cost the business just short of £300,000 in labour costs to deliver that total, indicating an efficiency in the business.
There are benefits to the supply chain too. Alan says: “A lot of our suppliers, particularly the nurseries, have benefitted from this because we’ve obviously been replenishing stock. If you’ve got £1.7m worth of sales, take half that as a figure, that’s money feeding back into the supply chain.”
Blue Diamond has undergone huge expansion in the recent past, with numerous acquisitions of the sold off Wyevale centres. This has hopefully helped in the company’s survival bid. Alan says: “I’m looking at a variety of cash flow scenarios. I’ve got a worst case, but the main one I’m looking at is a three-month shut down with restaurants not delivering anywhere near what they were doing for the rest of the year. I’ve also cut down on my projections for clothing and home products because if social distancing measures are still in place to a reasonably high degree, that’s going to compromise our turnover. If the restaurants are closed or even partially open, that’s going to hit footfall. My cash flow scenario for the rest of the year is pretty realistic in terms of the damage that still going to be caused by this virus. Because, particularly with the work we’ve been doing with home delivery and that cash coming in and things that we’ve just generally worked on, the group will survive this.”
And although survival may be top of the priorities at present, Alan has had the foresight to use this period to create a legacy – a new branch of the business that will drive profit in the future. Alan explains: “I’ve spent the last four weeks basically building a new business. You have to view it that way. If you’re going to be able to keep up with the sheer demand and shift that much stock out of stores in a week, you’ve got to put together a pretty good, efficient system that is measurable. I have a system in place now. I can measure how many orders are being picked by the stores, how many orders are being picked by each person, the delivery value for each van going out, the sales per employee for delivery. I’ve put all those in place so I can look at each store and look at the efficiencies. If someone isn’t doing as well, we can recognise that and step in and help support them to get their efficiency up.
“We’ve built this thing is the last four weeks and that’s what I’ve been focusing on with the team. I’m online with the team for most of the morning going through everything in order to keep moving. My view is this isn’t just about the now, this is about something, a legacy for when normality returns. We will have an efficient online ordering system, be it for home delivery for customers that are within drive times of a centre, but also we’ll have an efficient online delivery system for the remaining millions of homes in the country that aren’t near a Blue Diamond centre, and those orders will be fulfilled by one of our hubs. As of this week, anyone will be able to go online, buy anything they want from us and get it delivered anywhere in the UK.
We can’t just sit back and do nothing because you cannot predict the longevity of this eruption. There are views that lockdown might be relaxed in May, but in the paper on Monday I read that Boris Johnson is less hawkish about lifting the shutdown to early. I assume that will have something to do with his own personal experience with COVID-19. I’m not pinning my homes on opening in three weeks, I’m building a business that works that ensures our survival for as long as this shutdown will last. We’re using this opportunity to build a legacy that becomes a new profit centre when normal times return.”
And, according to Alan, the industry will return to its strong position, a position that garden centres had achieved prior to the coronavirus breakout. He says: “Of course, it’s going to go back there, everything will return to normal, but no one can look ahead to 2021 right now and say it’s going to be a normal year of recovery, it’s too soon to read that. There’s so many unknowns in April, maybe we’ll know a lot more in June and people will have a clear view for their own business to predict more accurate cash flows.”
Having overcome the virus himself, Alan has done all in his power to make sure Blue Diamond Garden Centres can, too.