Retailer faces recession by shopping for ventures

Mar 10 2009 by Peter McCusker, The Journal

GIFTWARE chain Collectables is looking for more acquisitions after taking over a furniture retailer as it waits for sales to rise again at its stores.

Managing director Phillip Lewis, who founded the nine-strong chain from a barrow in the MetroCentre in 1986, has been finding other ways to expand. He likens the recession to driving in the mist and is happy to consolidate until the view clears.

His Ponteland-based Collectables business, which he runs with his son David, has made its first foray into furniture retailing by buying Mandale Fine Furniture of Stockton and it has also acquired some assets of Scottish company Gleneagles Crystal from administrators, including its crystal and Norfolk Lavender gift ranges.

Mr Lewis said: “If the right opportunity to make further acquisitions comes along, then we will be in a position to take advantage of it. It’s tough at the moment, but we are managing quite nicely.

“We are a North East brand and are very keen to develop here. There is plenty of room for us to expand across the region. But our last store opening was in Carlisle 18 months ago and it may be some time before we open another one.

“It’s a bit like driving in the mist – no one is sure which way the economy is going and we are focusing on consolidation at the moment.”

Collectables stores turned over £12m in 2008 and the company’s total turnover for the year came in at £19m, including its Blaydon distribution arm Xystos and rents from its two retail park holdings on Teesside.

Mr Lewis expects this to remain steady in 2009, which in the face of the strong economic headwinds would be a creditable performance.

The company last year shed some jobs through natural wastage and now employs about 300 people. Mr Lewis said: “2008 was very difficult. It was not easy at all. We spent a lot of time sharpening our ranges and we now have a good business model going forward.

“Things became really tough in September, but we had seen it coming … It’s early days, but the shops are performing well so far this year. We expect 2009 to be similar to 2008, but not as good as 2007.”

In 2006 Collectables bought the Enchantica range from Royal Doulton, in 2008 it acquired the Myth and Magic range and is now working on “fantasy” products through its distribution arm.

Its purchase of the Mandale furniture business gives potential for expansion. Mr Lewis said: “We are getting to know the brand, but we believe in time it will provide us with room for further growth. The company is also looking to increase its food offering by improving and developing the restaurant facilities it offers in its stores.”

Collectables has shops in Alnwick, Newcastle, Carlisle, Sunderland, Stockton, Harrogate and three in the MetroCentre.

Page 2: Shoppers melt away at sales end