Many NSS readers have told us how their return from the Christmas holidays was greeted by banks withdrawing or revising overdraft and factoring facilities, adding to the squeeze already being felt from customers taking longer to pay. It’s time to talk to the wholesalers.

Companies are being squeezed from all sides. One mason told NSS that the money he is owned has doubled in the past six months to £1million as customers take longer to pay. That’s a million pounds worth of materials, machine time, wages and management which that company is financing. At the same time the banks are now ensuring the recession they started will worsen by withdrawing overdraft and factoring facilities that help smooth out the peaks and troughs of cash flow.

Who can masons turn to? One way of easing cash flow is to buy from wholesalers.

In the good times some masons started importing stone themselves because they could get better prices by bringing in container-loads and holding large stocks. Now it does not look so comfortable to have large sums of money tied up in stock that is moving slowly, especially when currency fluctuations are adding to the risk.

Those currency fluctuations have, of course, led to sterling price increases of anything bought in euros and dollars, which is practically all imported stone.

Wholesalers are in a better position than most to combat those fluctuations and the full effects of the fall of sterling have been dampened by them.

The buying power of wholesalers resulting from the quantity of materials they move has enabled them to shift some of the price increases back down the line to the quarries.

There is no getting away from it, though: Sterling has taken a hammering that has increased the price of imported stone in the UK, which can be difficult for customers to accept at a time when the prices of many other products are falling.

Margins are tightening and cash flow is being squeezed. Even companies with plenty of work are going to find it difficult to find the cash to pay the bills. In fact, companies with the most work could suffer the worst cash flow problems because they have most to finance.

The message from the wholesalers is: talk to us. As Paul Gidley at Pisani says: “The most important thing in all of this is communication. If customers talk to you, you can reach agreements.”

Stone wholesalers have a better idea than the banks of how the stone industry works and are likely to give their customers a fairer hearing if they are asking for some leniency. On the other hand, if it proves impossible to get hold of anyone in a company to talk to when accounts are overdue, the wholesalers are likely to tighten up credit in future.

And they are nervous – more nervous than they were at the end of last year. Some high street kitchen retailers have already closed, which means there is less work for those supplying them. Most house-building is on hold, so those who have supplied the developers are looking for alternative work. Even some major projects are finding it hard to get the cash to continue. Everyone is focusing on the top end of the market and all of sudden it looks a lot as if there is over-capacity in the market – possibly at the wholesale level as well as the mason level.

Before Christmas there was some element of optimism in the usual busy period up to the holiday. But with time to reflect over the holidays and the relentless gloom from the mass media – at least until the snow closed roads and gave them something else to focus their hysteria upon – the reportedly worse than usual seasonal slowdown at the start of the year seemed a portent of doom.

Paul Gidley added some perspective to that gloom, however. He said: “I’m sitting here in a nice heated office, but I’m looking out of the window and the trees are bare and the sky is grey. Even if sales were booming I would feel depressed. January is always depressing.” January does, after all, have Blue Monday, the day psychologists say is the most depressing day of the year.

But in spite of the gloom, the wholesalers are generally reporting a reasonable number of enquiries. They hope that some of this is due to people deciding not to import directly, but they also believe it is because customers who might previously have been loyal to one supplier are now looking around for the best price.

And they think companies who have reached their credit limit with one supplier, or have had it withdrawn, are looking round to find some more credit. They point out that there is some level of albeit informal communication between the wholesalers.

Paul Sambrook at Brachot-Hermant in Birmingham puts it this way: “Some people don’t like being asked the question, but it’s there to be asked and they shouldn’t take offence at it. It’s not necessarily directed at them but just a reflection of the market.”

The wholesalers themselves are, of course, facing the same squeeze as the rest of the economy, and while they all want to help their customers, it is a balancing act with protecting their own cash flow and exposure to bad debts.

One thing their customers can be sure of is that the suppliers want every good sale they can get, so prices will be keen and service good.

And the wholesalers want to point out that sometimes the price should not be the overriding criterion. Quality of the material, getting the most economical size and delivery times are also important for profitability. As MFS in Bristol say, half slabs for half price can really cut your costs.

Beltrami’s Paul Sambrook says in these days of ever more competitive price lists it’s not always about the price in front of you. A slab at £100/m² might not look as good value as a slab at £90/m², but if it is better quality and the right size for what you want it could end up yielding more finished product.

“You have to be using everything you’ve got to make sure you get a better deal,” he says. “It may be a little short sighted of people just to get a spreadsheet out and look at prices.

“We know our customers and we will travel that extra mile to make sure we give them what they need. We have so many materials available that if the communication’s right we can find something in the shape, size and quality to suit their need.”

Brachot-Hermant are using the bit of extra time they have on their hands to have a major assessment of their warehouse in Birmingham. There has been some rationalisation of stock, concluding a move that started 18 months ago when Brachot decided that the ease of communications around Europe now makes it unnecessary to hold quite so much stock in every location.

Ingemar, with their depots in Essex and Lancashire, are also rationalising their stock. Javier Diez, who heads the Spaniards’ operation in the UK, says: “It’s nice to introduce new materials, but we had materials that never moved. The English market is moving slowly towards a bolder sort of colour, but 80% of what we’ve sold at the end of the day is black, so it’s better to have plenty of good quality black that our customers don’t have any problems with.”

Ingemar have also stopped selling engineered quartz, at least for now. They had stocked Compac, but with Compac having opened their own depots in the UK, Ingemar decided they did not need to stock it.

Ingemar have 16 people working in the UK and like to maintain personal contact with their customers. They supply all over the country and can usually deliver within a day or two, although a single slab to the Hebrides is going to take a bit longer.

Like all the wholesalers, Javier says masons should use the wholesalers as extensions of their own businesses. They can send the clients and specifiers they are working with to the wholesalers’ premises to see a wide range of product in large slabs and various finishes, which is more inspirational than seeing a 100mm square sample.

At London wholesalers MGLW Rogerio Moutinho has just been to the Victoria stone exhibition in Brazil. He says he was in two minds whether to go or not, but decided to because “if they see your face they are more willing to deal”. And he needs to deal, he says, “because we are suffering big time with the exchange rate”.

However, he says more suppliers from all over the world are coming to him with better offers as demand falls. “I am offered more material now than I ever have been – and it’s not because of my beautiful eyes.”

He is not as gloomy as some about the outlook. He is supplying masons who are carrying out work worth tens or hundreds of thousands of pounds largely on the homes of people who can afford to spend that much on a kitchen or bathroom. He does not believe they will stop spending, because they think they will get a deal if they have the work carried out now.

And, in spite of the price rises due to the exchange rate, customers are getting deals. Rogerio says he is predicting a fall in his sales of around 10% for the year to the end of March. “Like for like our sales haven’t gone down that much in the UK, but our margins have suffered.”

At Stoneworld, based in Park Royal, London, Marketing Manager Neel Shah says they have just published a new price list reflecting the currency increases and they have tightened up on credit control.

He says they have clients who will look round for the lowest prices, but for most quality is paramount. “We have been trading for close to 17 years now and have a reputation to look after.”

He says quality and service have to be the main issues now and part is his service is having his own 7.5tonne trucks for next day delivery on most materials in stock, although there has been some stock rationalisation to concentrate on the best quality of the most popular products.

At one of the UK’s best established stone wholesalers, Gerald Culliford’s in Kingston upon Thames, Surrey, Managing Director Simon Sands says: “One needs to reduce the stock, but it’s not an easy thing to do because there are so many suppliers now. If we don’t have it our customers will go somewhere else.”

Culliford’s have earned their reputation as leading wholesalers of fine quality marble, granite, limestone and slate over many years thanks to their network of international suppliers. One thing Simon says he will not do is risk that reputation. “I have no intention of reducing quality for price purposes.”

He says it is difficult quoting prices for projects sometime in the future because of the fluctuating exchange rate, but they have to quote and if they lose out they “just have to take it on the chin”.

“One doesn’t know what’s happening from one week to the next. There have been recessions before, but not like this one.”

Nicky Blyth at Blyth Marble in Worksop, Nottinghamshire, who are celebrating their 40th anniversary this year, can see a silver lining from the economic cloud.

Nicky thinks it might remove some of those in the market who simply import containers without any regard for quality of the product and sell them straight on. She does not think many people will want container loads this year.

“We’re very optimistic about the future,” she says. “Local family firms will be the survivors.”

She says they had a particular good January last year, so it would be difficult to match that level of sales again this year, but business has only only fallen back to pre-2008 levels.

She says they will continue to offer the same high level of service as always and stock their full range of granite, marble, limestone and quartz. They have added exotics lately and have extended their range of satin finished materials as well as continuing to offer quartz products.

Another of the traditional wholesalers are McMarmilloyd in Great Bedwyn, Wiltshire. They specialise in sourcing rare and unusal materials, an area in which they are facing increasing competition as other wholesalers add exotic stones to their stock.

Ian Macdonald, who runs McMarmilloyd, says he had a good year last year and is supplying the stone for a number of projects that have kept the beginning of this year busy as well. “I think a lot of it’s psychological,” he says.

He says he has a huge stock of rare stone that is not affected by the change of exchange rate because he bought it before sterling started falling and, in any case, on such materials the price is not as sensitive as the availability – such as the Ashburton Marble McMarmilloyd supplied to In-Stone for a reception desk at Ontario Tower in London. McMarmilloyd have some of the last blocks of it available.

Some wholesalers have little option but to stock more because they have moved into new, bigger warehouses.

B-Stone, Beltrami and Pisani have all opened new warehouses, as have engineered quartz suppliers Compac, who opened their first two depots in the UK last year, and Cosentino, who opened a third depot, taking them into Bristol last year.

B-Stone are an English company set up by the Belgian firm BMB. Roger Lill heads the operation in the UK that completed a move into new 3,000m² premises in Northampton towards the end of last year.

The warehouse and offices are more modern and more attractive than the premises they moved from, as well as being more accessible to a greater number of people. The result, says Roger, is that more of their customers’ clients are now visiting them and they want to hold more stock to show those who do visit.

B-Stone’s response to the currency fluctuations is to add a surcharge to their published price-list. In January it was 7.5%. As Roger says: “We can’t do much about the exchange rate. Everything we buy is based on the euro or the dollar. There’s no way round it.”

Beltrami are moving into their new 3,350m² warehouse in Halesowen with its first floor showroom on 31 March. It is twice the size of their current premises and will provide a more pleasant environment to view the materials, says Martin Dolby, who manages the UK operation. Being larger, the new warehouse will hold more stock, including, for the first time, tiles and a wider range of exotics.

There is an advantage to masons of sending customers to Beltrami, says Martin, because once they have visited and chosen the materials they want, they almost inevitably go ahead with the project using the mason who suggested they visit.

“The most important thing we’re doing for masons is holding stock, so they don’t have to,” he told NSS. “They can just call off one or two slabs when they need to.”

Beltrami are offering free delivery on three slabs or more and are holding materials in different size slabs so fabricators can buy the appropriately sized material for the number of runs they need for a kitchen, leaving them with less waste.

The UK’s is not Beltrami’s only new warehouse. They have also bought new premises in Poland and the Netherlands because Herwig Callewier, who heads Beltrami in its home state of Belgium, believes it is an advantageous time to buy property.

Pisani have made one of the most impressive moves towards attracting customers’ customers with their new £10million premises at Feltham, near Heathrow airport.

Masons are being invited to use the kitchen and conference facilities for their clients, take them to be inspired by the displays that include room settings with mood lighting, and see some 360 materials in stock in the 3,000m² warehouse.

“It’s met with great success,” says Paul Gidley. “And, yes, we want to replicate it elsewhere. December was the best December we’ve ever had in terms of slab sales.”

Pisani have also bought a new Scania eight-wheeler with a 30-tonne per metre crane on it for deliveries. “We’re still doing what we can to improve service to customers,” says Paul.

Levantina, the Spanish company that moved into the UK with a warehouse in Rotherham in 2006 and expanded with another in Basingstoke in 2007, have bought smaller vehicles with trailers for both their depots to improve local deliveries.

Shaun Hopkins, who heads the operation in the UK, says: “We’re trying to find ways to help customers, but where do you go with it?”

He says some people have stopped bulk buying from abroad and are now sourcing material as they need it locally. “January was fairly quiet, but not as quiet as I thought it would be,” he told NSS.

Silestone engineered quartz company Cosentina have added two trucks to bring their fleet up to five to improve deliveries. Christophe Gontier, Managing Director of Cosentino UK, says this will enable them to deliver more frequently to customers.

“This reduces the amount of stock they need to hold and helps to improve cash flow.”

He says Cosentino’s three warehouses in the UK, including the new one in Bristol, will be carrying over 8,000 slabs at any one time this year.

“We have expanded our sales force to 10 promoters and eight sales managers, who are visiting kitchen specialists, builders and architects on a daily basis and feeding through a high number of quality sales leads to fabricators.

“In the current climate we are committed more than ever to supporting our stonemasons,” he says. That has included knocking 10% off the price of their Zen colour range in January and February.

“We also offer a number of colours in the Silestone range free of charge for showroom displays, which stonemasons can use to support their kitchen specialists. While the pound has fallen by 25% against the euro, we are keeping prices as low as possible.

“Our sales managers are also currently rolling out a specific training program to educate fabricators in the properties and manufacturing of Silestone. This will help to reduce wastage and improve margins.”

Another quartz company, Compac, opened two warehouses in the UK – one near Pisani’s new headquarters in London and one in York – in September just as the Lehman Brothers bank collapse cemented the seriousness of the credit crunch. Sergio Ramirez, who is leading Compac’s move into the UK in the South, says the UK is a priority market for the company and they wanted to be here in order to get Compac specified more frequently.

“We try to differentiate ourselves with new colours, away from natural stone,” he says. They have a new Silver line launched in Verona at Marmomacc last year, a pure white called Absolute Blanc, soft pinks, greens and blues. “It’s not just another quartz, it’s a brand. And when you’re selling a brand you have to put more time and effort into it.”

On the hard landscaping and roofing side of the industry wholesalers are also looking for ways of improving the service they offer and slate suppliers SSQ, for example, have revamped their showroom and stockyard in north-west London. The new design will be unveiled on 2 March.

They have introduced product displays in their yard so the material can be seen in daylight and have opened it for the first time to the public and trade to visit and collect the slate for themselves in their own vehicles.

With more than a million roofing slates in stock, as well as flooring and paving materials, SSQ are saying “treat our stock as your stock and come a collect it if that is more convenient to you than us delivering it”.

Business Development Director Philip Fergusson says they will in future have a lot more outside displays and a greater emphasis on their Riverstone flooring and architectural stone from their own quarry in Argentina. They will also have a greater emphasis on offering expertise and advice.

“When you’re stocking a large number of slates in London why not use it? So, yes, you can come and talk to us – we’re the experts – whether you’re trade or domestic.”

Philip says he anticipates people who stock SSQ products will want to reduce the amount of material they are holding during the recession. They can do that secure in the knowledge that there will still be significant quantities in stock at SSQ. “And they can sell right across our range without holding it all in stock,” he says.

“It’s not that I don’t want anyone to buy a lorry-load from us. I do. But in these difficult times we have to help people.” He says more depots could be on the cards.

Hard landscapers CED, with their headquarters in Essex and depots in Scotland, the Midlands and near Heathrow, say they have always aimed to act as customers’ agents, providing expert advice for projects as well as the products for those projects. “Our job is to communicate to the people who matter what the stone industry can offer – from all over the world,” says Managing Director Michael Heap.

“All you can do is your best. Why should anyone do anything different now? We’re looking to have a decent year. I’m not saying it’s going to be a bumper year, but we will just have to work 10 times harder. We have put in an enormous amount of work on systems improvements, back-up, the website. If we hadn’t done that we would be sliding backwards.”

On the memorial side of the business, there is a bit more optimism. A cold winter usually increases the death rate which would be expected to increase the demand for memorials.

Comments from the wholesalers: “It’s all right actually”; “We’re going to have a busy year”; “We’re having quite a good run at the moment”; “We’re busier than usual – it’s difficult to see why”.

Steve Richardson at SP Richardson Memorials in Essex says his imports are costing him 25% more than they were a year ago, although, of course, the material price is only part of the cost of memorials and the prices he is selling at have only increased 10% in general.

Steve has bought a funeral directors business, T W Boorman, with branches in Tonbridge and Tunbridge Wells in Kent, and a business making concrete bases for memorials. He is also supplying Dignity, who run private cemeteries. He says when people have paid £800 for a cemetery plot they are going to put a memorial on it. One of the memorials Richardsons are building at the moment is an £80,000 mausoleum for 24 bodies built from 100mm thick granite.

Odlings, in Hull and Bristol, say they are doing well on memorials, although the kitchen business they have expanded into is quieter. Managing Director Gerald Priestland is not too concerned because he says that, while not wanting to be complacent, kitchen sales are always quiet in January.

One way Odlings are trying to help their customers is by cutting delivery times from 12 weeks to 4-6 weeks to try to help with cash flow.

A&J Robertson, who supply memorials across the UK from their base in Aberdeen, say their aim is to hold their prices until the summer if they can.

Managing Director Graeme Robertson says some areas are busier than others, but told NSS: “I’m aware funeral directors are busy, which would indicate we can expect to see an increase in work.”

While the wholesalers in the UK are hoping the recession will encourage masons to reduce their stock holding and stop buying directly from abroad, those supplying from abroad do not believe orders from the UK are going to end.

Grein Italia and Antolini Luigi in Italy, for example, are still convinced stone will be sourced from them in the UK as it is throughout Europe. They buy block from all over the world and process it in Italy on their banks of frame and multi-blade diamond saws.

And from China, Jetboat have been particularly successful in penetrating the UK market with their full range of marble, granite, limestone, sandstone, slate and just about anything else you want, sourced from all over the world and processed in China.

Jetboat’s factory is near the G603 granite quarry and they offer 1200mm x 900mm x 40mm slabs of G603 for a freight-on-board price of $23/m². Payment is usually by letter of credit and their UK customers include SIG and Linden Housing Group.

One of the masons who buys directly from them and who prefers to remain anonymous, says he first made contact with them at the Natural Stone Show in London. He says the quality of stone is good and the price right. “We could probably get it cheaper, but you get what you pay for,” says the masonry company owner. “They tend to be careful with the quality control.

“We’re glad we made the move to buy directly from Jetboat. It gives us a lot more control over the stock we carry and we can sell at a very reasonable price.”

He uses a freight forwarder to organise shipment and although at first paid Jetboat by letter of credit, with a trust having built up between the companies these days sends a cheque when the stone is loaded on to a ship. “If we don’t send a cheque they don’t send the documents and we can’t get the stone off the docks.” It still means payment if often made three weeks before the stone arrives.

They pay in sterling and the price has increased 20% since September, which they say they have not yet felt able to pass on to customers. “It’s causing problems.”

They buy 28-tonne container loads at a time that take 25-30 days to arrive.

Computing power

Computers are having as much impact on stone wholesaling as anything else in the world, although they are being used in different ways by different companies.

B-Stone are in the process of updating their website to show pictures of the actual slabs they have in the warehouse, rather than library shots. They already have a trade-only area on their website with prices. It includes special offers, so B-Stone suggest customers keep an eye on it.

Brachot-Hermant also have a trade area, again with prices and a shopping basket to buy products, although they say the prices could be open for discussion (perhaps because they have slabs in stock that were bought when the pound was stronger) and it is always worth contacting them.

Pisani have invested hundreds of thousands of pounds in a new bar coding system to keep track of the stones they have in their new headquarters in Feltham and their other depots. It is almost ready to go live and will enable them to keep track of their stock in real time to the benefit of themselves and their customers, they say.

CED say that most of their enquiries arise through word of mouth recommendation, but that their website is an important part of the way they communicate with the wider design community.

“We have put an immense amount of work into the website. It has lots of photographs and lots of ideas for designers. A lot of people say they don’t go to CABE for ideas, they come to us,” says Managing Director Michael Heap.

Most suppliers from the UK and overseas now have a website of varying degrees of sophistication and relevance and regularly use email to send photographs of stones and communicate with customers.

Ingemar do not yet have a website. They have been promising one for three years now. They say it should be launched shortly.