interview from Rebecca Nottingham at kbbreview.com
Taking over the role of managing director at a high profile company must be a daunting task, particularly if your predecessor played a pivotal role in changing its fortunes.
That’s exactly the scenario Neil Bailey faced when he took over as managing director for Poggenpohl UK earlier this year, after Martin Gill was promoted to the role of international sales director and gained a position on the company’s board of directors in Germany.
“Poggenpohl was struggling in the UK before Martin [Gill] took over 11 years ago,” explains Bailey. “The brand had lost its direction and a lot of its success since has been down to personal passion and Martin’s drive. We [Poggenpohl UK] have a certain degree of kudos in Germany and that’s all down to Martin.”
In 2000, Gill was part of a team involved in a strategic ‘network cleanse’, a move which reduced the number of independent Poggenpohl dealers from 70 to just 17. A risky strategy, but one that paid off. Bailey insists it was instrumental in the success of the brand in the UK today.
Despite having considerably fewer outlets, by focusing on those showrooms deemed most brand-oriented, Bailey reveals that sales volumes increased and the business flourished.
“In 2000, we had a network of around 70 dealers in the UK,” he explains. “They were selling our product, but they weren’t all necessarily serious about the Poggenpohl brand. Following a network cleanse, by the following year the company had whittled the number down to just 17 and the business actually grew.”
Bailey admits that Gill has set pretty high standards, but, considering he spent six years as sales and marketing director on the management team that played a vital role in the brand’s growth in the UK, his credentials are impressive.
“I don’t think Poggenpohl UK could have had a better front man than Martin. I’m similar to him in many ways, but quite different in others. I’m a people person and I think I’m pretty good at building up strong relationships, which I believe will help grow the brand further. I think it’s going to be much more evolution than revolution.”
Part of the Nobia Group, which also owns high-profile brands Magnet, Ewe, Intuo and CP Hart, Poggenpohl now operates in the UK through eight wholly-owned studios and a network of 25 independent showrooms. The brand, which celebrates its 120th anniversary this year, now successfully operates in more than 70 markets worldwide and is renowned for its quality engineering and innovative and stylish contemporary designs.
“Poggenpohl has always been at the forefront of innovation and evolution in kitchen design,” says Bailey. “The brand’s mission statement in the very beginning was simply to improve the kitchen. Very straightforward, but effective.”
According to Bailey, the luxury brand was behind the design of the world’s first ever kitchen island unit and its dedication to innovation, since its inception in 1892, has cemented its position as a front runner in kitchen design. You only have to look at the impact made by its Porsche Series, with integrated entertainment and smart home technology, to understand the influence it has over the global kitchen industry.
But, despite being labelled a ‘luxury’ brand, something that the company is clearly proud of, Bailey insists that it can also design a kitchen for ‘pretty much’ every budget. “I class Poggenpohl as the Mercedes of the kitchen industry,” says Bailey. “We offer A Class and we also offer S Class, which means that we can compete with Magnet and we can also compete with Bulthaup. If anything, we’re more competitive than we’ve ever been in the lower price range. I think a lot of people that aspire to own a Poggenpohl kitchen think they must go down the middle market route and it’s our job to make sure they don’t have to.”
Every new boss has to have a master plan. So, what’s his?
Poggenpohl UK currently generates a healthy turnover of around £22 million, a figure he aims to increase to £30m. But, in a market that by his own admission remains ‘challenging’, just how realistic is this? And how does he plan to achieve this ambitious goal?
“I don’t think there’s going to be any great growth in the UK for years, but there’s always opportunity to take market share,” he says. “If you look at the penetration of our business countrywide and consumer-wise, it’s nothing. Just because we’re in a fragile economy, doesn’t mean that we don’t have a target market. There’s nothing to stop us growing our business, we just need to be smart about the way we do it.
“Yes, the market is still challenging, but there are huge opportunities here for Poggenpohl. We’re very solid in London, but there are key areas in the UK where we’re not currently represented, including Kent and Bristol, and those are the areas we’re targeting for growth.”
Bailey admits that while growth is certainly top of his priorities, as a high-end luxury brand, he’s looking for more focused, strategic growth rather than mass-market penetration.
“My aim is to extend our independent dealer network to somewhere in the region of 40 to 45 showrooms as a maximum. It’s important for us to get the right people on board to represent the brand well, but also for them to be able to build a solid business and, ultimately, make money. We’re very selective with who we choose.”
As well as deputising for Gill, in his previous role Bailey was responsible for monitoring the performance, and managing the growth, of Poggenpohl’s network of eight wholly-owned studios. As managing director, he’s now in control of the entire UK retail network, including independent showrooms – an aspect of the role he’s extremely keen on developing.
“I’m really excited to be in charge of our entire retail network in the UK,” he enthuses. “I feel like a kid in a sweet shop because suddenly I’ve got all of these new businesses that I can get involved with and get to know better.
“Our own studios are all stable and performing really well, so I can pull back from those now, to a degree, and give them a bit more control. What I get to do now is to put everything we’ve learnt about retail from our own studios into the independent dealer network.”
It’s easy to see how some independents can feel threatened when a supplier operates its own showrooms within the same market. So, isn’t there a slight conflict of interest between Poggenpohl’s own studios and its independent dealers?
“To me, it makes sense for a manufacturer to own and run its own studios, because it shows potential dealers the standards you expect them to achieve with the brand,” he explains. “It’s a statement from the manufacturer that says ‘we believe in our product’.
“We will never knowingly compete with our independent dealers. If we find out that a consumer has been to an independent dealer for a quote first, we always back away,” he says. “The bottom line is that, as a supplier, we have a duty of care to our independent dealer network. We have to support them and we will always say no if our own studios start competing with an independent dealer. We never undercut a dealer.”
Proving its commitment and in order to strengthen its relationship with independent retailers, 18 months ago the company appointed a dealer support manager. The objective was to offer support and guidance to dealers as well as influencing aspects of showroom design in order to give the network a degree of ‘corporate identity’.
Having spent six years focusing on the performance of Poggenpohl’s own studios, since taking over as managing director and getting more involved with its extended network, Bailey admits that he’s been positively impressed with the overall standard of independent showrooms in the UK.
“What’s really surprised me is just how good some retailers in the UK are. They’re fabulous,” he enthuses. “There’s a couple of businesses in Scotland, for instance, I’d die for. We’re not here to say ‘this is how to do it’, but we can pass on some of our expertise. Equally, we’re not trying to steal other people’s ideas, but there are some very good businesses in the UK that Poggenpohl can learn from.”
Bailey admits that Poggenpohl’s success in the UK, up until now, has predominantly been driven by its London-based studios and strengthened by its impressive marketing strategy.
While, for other brands, marketing activity pretty much ground to a halt following the economic downturn, Poggenpohl did the opposite, increasing its marketing spend to strengthen exposure among both retailers and consumers.
“We believe very much in taking our product to the people,” he explains. “We have showrooms, but it’s sometimes very difficult to drive consumers in and that’s why we believe in advertising and marketing. We spend around £450,000 a year on advertising in the UK and that’s one of the reasons why our brand is so well known.”
So, how is business?
The recession of 2008 was so damaging that even strong brands, like Poggenpohl, suffered. Though it hasn’t necessarily taken full advantage of it yet, Bailey admits that being part of a large, and successful, group like Nobilia will pay dividends.
“Our business levels are as strong, if not stronger, than they were prior to the recession,” he says. “We’ve had to work harder, but in the past three years we’ve made back all of the losses made since the recession.
“Poggenpohl is a €100m a year business in Germany – that’s chicken feed to Nobilia, but the potential for investment is there, so we should work with it and be a part of it. We need to stop thinking as Poggenpohl and start thinking as Nobilia. I think in the past, to a degree, we’ve almost segregated ourselves, but we shouldn’t. There are so many things that Nobilia can help us with.”
The UK is one of Poggenpohl’s strongest and most successful markets and, considering product is sold through only 33 studios, that’s a pretty big achievement and something Bailey is determined to protect and build upon.
“The market is big enough and we are small enough to just be better at what we do,” he concludes. “If you do the same as you did yesterday, you’ll get the same results, but in a market that’s not great, it won’t be a good result.
“Poggenpohl is the jewel in the crown for Nobilia and it has a structure that will support Nobilia and I think it will certainly support Poggenpohl. The future looks rosy to me.”