Companies in the interiors markets are living in  two worlds – the one that is keeping them busy during the day and the depressing one they see on the television at night. The fear is that the world of the night will win the day

TV and radio presenters and national newspapers were incapable of concealing their glee when the Governor of the Bank of England and the Prime Minister finally used the word ‘recession’ last month. But there’s a gap between the frenzy of the media and the reality in the market. At least, that is the view of some of the companies supplying stone and quartz for commercial and domestic interiors.

“I think as soon as the media stop talking us into it, it won’t be so bad,” says Lee Bremner, Director of stone tile specialists Strata Natural Stone based in Camarthan. “I’ve stopped watching the news at night.”

Eve Irivani, Managing Director of stone interiors retailers Montpellier Marble in Cheltenham, says: “I’m cautiously optimistic. If we could just gag the BBC I think everyone would feel a little bit more confident.”

She says there was one week in September when they were “eerily quiet”. But she adds: “Since then people have been popping their heads up again. It’s like a nuclear bomb went off.”

Chris Higgs of Marmi in Maldon, Essex, believes it is the end of next year and the year after that stone companies will suffer. Being “tail-enders”, he says, stone companies tend to feel the squeeze later than developers.

“We’ve got work up to July next year and we’re just looking at another job that should give us work up to March 2010. If we can final some of these projects we’re in negotiation stage with at the moment it should carry us through the worst of the downturn.”

But he says competition for the work that is out there is increasing – which means prices are falling. “A year, 18 months ago we had a full order book and were just topping up. Now we’re pricing to get the work.”

In-Stone (Europe), who have bought a Robostone robotic arm for the new, larger workshops they are waiting to move into in Essex, say at the top end they are extremely busy. “It’s the old story,” says Martin Rankoff, “the top end people aren’t really going to be effected… although they might not buy a new Bentley so the workforce won’t be upset.”

And, he says, what they are buying is expensive “weird and whacky” materials such as huge screens of back-lit onyx.

Louis Livramento of London masons Livra believes big developers are finding it harder to draw down finance than they used to. “Enquiries were down 30% in September. That worried me. But there’s been a turn round in the past two weeks and now we’re struggling to get all the estimates out.”

Livra have reduced their workforce to about 30, but Louis says based on the number of enquiries lately he is optimistic there will not be any need for further reductions. He says he has started to receive enquiries from hotels refurbishing in preparation for the 2012 Olympics in London and expects that to grow.

Nevertheless, although sales are up this year, he is anticipating a 10-15% drop in turnover next year. But he is philosophical about it. “These things come and go. People like to focus on the doom and gloom but we get a downturn every 10 or 15 years.”

However, he says strategies will have to change with the times. “We’ve just done a stock take and I find I’m sitting on £¹/₄million of slab, to my horror.” He wants to reduce that. “People will have to change their business models very quickly, but we’re all capable of doing that because stone is a cottage industry, really. We’re all very small.”

If processors do reduce their stockholding in order to improve cash flow, as might be expected, they will start to rely more heavily on stone wholesalers both for stock and credit.

With the significant expansion of the stone interiors market since before the turn of the millennium, and particularly in the eight years since then, more of the Continental stone and quartz suppliers have set up their own warehouses in the UK to supply granite, travertine, marble and quartz to the market.

Hard figures are difficult to come by, but an educated analysis of government figures indicate a continuing and substantial growth in stone imports for interiors up to this year – imports of stone from Turkey, for example, were up 41% by value in 2006 and a further 12.5% in 2007 (even slightly more by volume, indicating the continuing fall in prices that anyone buying Turkish Travertine is already well aware of).

The growth in the supply of stone and quartz has come from companies such as Ingemar, Levantina and Cosentina that have increased their presence in the UK. Belgians B-Stone in Northamptonshire have moved into a new, larger warehouse and fellow Belgians Beltrami are now moving into premises twice the size of their original warehouse in the Midlands. Compac have just opened warehouses in London and Yorkshire and Cosentino have opened a third depot in Bristol.

Faced with this increasing competition, Pisani, who are still the largest stone wholesalers in the UK, have opened their own new premises in Feltham, near to Heathrow airport, that takes stone wholesaling up a notch.

While their £10million new premises have 3,000m² of warehouse space carrying 45,000m² of 360 different stones and finishes, with another 800m² still to be built as a tile store, this is not just a warehouse. It also includes showrooms and offices on two floors with inspirational room sets and meeting areas where Pisani’s customers (stone processors) can take their customers (clients and designers) to see just what can be done with stone.

There is an entrance for the clients and designers at one side of the building and an entrance for what are being called ‘customers’ (the trade) at the other. It is not snobbish segregation. It is because different people have different requirements. Masons tend to know what they want and want to get it and leave, not be stuck behind an architect spending half-an-hour talking about it.

At the same time, Pisani do want to be able to spend half-an-hour, or as long as it takes, talking to a designer or client and have recruited two new members of staff to do just that, because they believe by showing such people a wide range of stone in all sorts of applications they can sell more of a greater variety of it.

Feltham will replace their depot at Brentford that is half the size and has material stored in the open air. The new depot will become their headquarters, and if you want to see what Pisani have to offer there they are holding customer open days on the 28th and 29th of this month (November). The place is impressive, as the 200 or so customers who have already visited it ahead of the open days can testify.

And if this does not seem to be an ideal time to be making a £10million investment, Pisani Director Nick Telfer says he feels much more confident going into an economic downturn with the new depot than he would be without it. He is convinced it will enable Pisani to increase their share of the market.

In fact, he is so convinced that the intention is for Feltham to be a model for further depots around the country, even one to replace their centre near Matlock in Derbyshire where they have already obtained outline planning permission to build a hotel and a technology industrial park.

Pisani’s new depot is about raising the image and status of stone. Stone is a premium product that should be presented in an atmosphere befitting its status. And, they believe, at the top end of the market clients want the choice of more unusual materials – hence the exotic and semi-precious stones framed and, where appropriate, back-lit in the new showrooms.

“There’s a more mature market evolving now, looking for something a bit more exclusive,” says Nick Telfer.

A showroom based very much on the concept of raising the status of stone was opened in Harrogate by Jason Cherrington’s company Lapicida a year ago. In 1,500m² with as much again for warehousing, Lapicida use Fendi furniture, Lutron lighting and Clever Association’s ubersophisticated domestic controls to elevate the status of the stone still further by association.

Jason says the budget end of the market has come to a grinding halt but at the other end of the market sales have continued to increase. “We were doing a lot of apartments with travertine – five or 10 containers a week. That’s stopped overnight. We’ve swapped it for higher end projects.”

At the top of the market Jason’s clients are not only in the UK and the list of projects he is currently supplying includes developments in Switzerland, Austria and Ibiza.

He says orders are still coming in and every day it continues to surprise him. He believes he is benefitting from having looked after customers during the good times, making sure they got what they wanted quickly. “One Saturday recently – and Saturdays are a busy day for us – every customer who placed an order had been a customer before.” The current projects overseas have all come through previously satisfied customers.

Jason will not say how much his new showroom cost him, just that it was, unsurprisingly, millions. Adding the vaulted ceiling alone cost him £100,000. Earlier in the year (see NSS May issue) he said he was not unduly worried about the effect of the downturn in the market on the investment. “There’s always a demand for a good quality product at a fair price,” he said. “The whole economy doesn’t just stop.”

What about now? “I’m fearful for next year, if I’m honest.” He was one of 100 Northern businessmen invited to a breakfast with Mervin King, the Governor of the Bank of England, in October. “He didn’t fill me with confidence.”

Nevertheless, he says he would not like to be trying to sell the up-market products that are currently keeping the business going from his previous premises in portable cabins in a quarry.

He says experience from the previous recession leads him to believe that people will continue coming in. “They always come. Then it’s up to you to get up and sell to them.”

Two more warehouses serving the interiors market, although in this case traditional, no frills stock holding and distribution centres, have been opened by Compac, who sell man-made quartz and marble agglomerate slabs. The warehouses are the first the Spanish company that has four quartz production lines in  Portugal have opened in the UK, although they have supplied the UK market through distributors such as MGLW in London for several years.

One of their depots is at Heston near Heathrow, about five miles from Pisani’s new warehouse. The other is in Yorkshire. Both are about 1,200m². Leading their push into the UK is Sergio Ramirez, who helped develope the Silestone range in the UK when Cosentino first opened their warehouses in Britain.

Most masons involved in interiors have accepted that engineered stone is just another material to add to their armoury to give them a larger share of the interiors market, giving them opportunities that they might have missed with natural stone alone.

There is a lot of quartz being made these days and the aim of the main players (see NSS August issue) is to differentiate their brands and prevent them from becoming a generic product.

They do that in the same way that stone wholesalers try to maintain an edge – by constantly coming up with something new and exclusive. The latest from Compac has fine silver particles in it and carries the name of Karim Rashid, a world famous designer associated with Armani, Ralph Lauren and Prada.

Sergio says he is sure people already know the name of Compac but in a few months they will be even more familiar with it. “The UK is a priority market for us,” he says. And not just the UK, because London architects can take products all over the world. Compac has already gone to Dubai through a customer in London, he says.

While many companies are trying to brand their products to differentiate themselves for the top end of the market, MFS in Bristol have moved into the price conscience end of the kitchen market with an engineered quartz product that is just 7mm thick. Called ThinQ, it is intended to go on top of existing kitchen surfaces rather than replace them.

It comes in 16 standard colours and in the same size slabs as MFS’s Arenastone 20mm and 30mm thick quartz (ie 3050mm x 1400mm) but weighs just 76kg per slab. It is more expensive than 20mm slab per square metre. And while its main market is expected to be for low price kitchen upgrades, MFS director David Zanetti says it could be used for shower enclosures and bath panels, where 12mm quartz has already proved popular.

David says they have experienced little sign of the downturn so far. He says it is not as hectic as last year, when it was exceptionally busy, but it has only gone back to the level of activity in 2006. “I don’t know what’s going to happen in the future, but if you go to a shopping mall there still seems to be a lot of people shopping.”

The story is much the same across the board. Paul Sambrook at stone wholesalers Brachot-Hermant in Birmingham says he has not noticed much difference to last year. He says perhaps the number of enquiries has fallen, but those who are enquiring are more likely to be buying, although they are also more likely to be going to several suppliers to see what’s available and suppliers have to work harder to get the business.

Martin Dolby at wholesalers Beltrami in Dudley, West Midlands, who are committed to moving into a new £3million warehouse that is twice the size of their existing premises, says sales this year are 8% up on last year even though  “we’re having to fight for every order”.

He, too, says customers are looking around for best deals. Beltrami are responding by offering more rare and unusual materials that are less price sensitive and more attractive to the top end of the market.

Martin says they have had a few customers go bust already and that it is getting harder to get money out of some others.

Shaun Hopkinson at Levantina says the depot they opened in Basingstoke a year ago has been doing exceptionally well and their depot in Rotherham has seen sales grow 35% this year. In June they increased their staff when Ben Prole joined them.

Levantina opened their first warehouse in the UK in Rotherham in January 2006 and moved into a larger adjacent warehouse just over a year later. Then they opened in Basingstoke and had been looking for a depot in Scotland, although Shaun says of that now: “I would not anticipate any strategic movement about Scotland.”

He says: “It’s tough out there. We have to work hard to get our share.”

Levantina are also introducing new ranges of products to attract more customers. They have added some more Brazilian granites. And they have started distributing their own engineered quartz, being sold under the name of Quartzia by Levantina in a wide range of colours.

At B-Stone in Northampton Roger Lill says: “We’re just chugging along comfortably at the moment.”

B-Stone have just launched a new website intended to help end users find suppliers from among their fabricator customers and the fabricators to find the materials they need in a trade area with price lists and special offers.

“Rather than one of these websites with lots of pretty pictures of kitches and bathrooms we have tried to  be a bit more practical,” says Roger.  

Ingemar, with their warehouses in Manchester and Epping, Essex, have also noticed that more customers are looking for exclusive materials even if they have to pay more for them. Among their latest offers are Lemon Ice green granite and Blue Madagascar.

These are high price bracket stones, but says Javier Diez who heads the Ingemar operation in the UK: “People seem to like them and are prepared to pay for them. People with more money tend to be more sophisticated, but in my opinion there’s a movement in the market in general away from grey and black.”

Javier says it has been a busy year and the traditionally busiest period leading up to Christmas is living up to expectations. However, he says: “It’s a time to be careful. There have been some casualties already.”

Among the casualties have been high street kitchen shops, but while some are going, others are still coming.

German kitchen company Kutchenhaus are opening another kitchen superstore in York next month (December) to add to those opened in the past five years in Manchester, Chester and Halifax. The York store will occupy 1,100m2 at the Foss Island Retail Park. The kitchens they sell are made by their sister company Nobilia, who claim to be the largest kitchen manufacturers in the world.

The kitchens cost £6-8,000 – which the German’s say is half the price of a comparable kitchen made in the UK. They can include granite worktops, although they are the only elements not produced in their 100,000m² factory in Germany that produces 2,000 kitchens a day – that’s half a million a year.

Norman Parker, Managing Director of Kutchenhaus in the UK, says the German board of directors has just given the go-ahead for more stores to open across the UK.