Snowdrop Independent Living completed a successful MBO back in April when it was picked up by investors who have long-term plans for the South Wales mobility retailer.
Now, chairman Kevin Bounds has explained how the new management team plans to modernise and reinvigorate the business using the latest technology and turn it into a shining example of a future mobility dealer.
Outside investors are increasingly turning to the mobility equipment market as a point of interest.
The obvious opportunities associated with the care market and the demographic it serves means the sector is fast becoming one of the most popular areas for individuals and firms to invest in.
One of the latest beneficiaries of this trend is Snowdrop Independent Living, an established South Wales dealer with a portfolio of three stores. The business has ticked along consistently for the last 20 years and has steadily built up a loyal customer base in the region.
As with so many of the industry’s longstanding retailers, Snowdrop’s owner and founder, Peter O’Shea, was looking for a buy-out as he approached retirement in early 2019.
Not surprisingly, he wanted the business he had spent two decades constructing to be inherited by someone who wanted to develop it while maintaining the key values it was founded upon. O’Shea’s calls were met by a group of investors who promised to guarantee the long-term survival of the business and evolve it to become a market leader.
Kevin Bounds, chairman of Snowdrop Independent Living and one of the initial backers, joined with now managing director David Morgan and The Development Bank of Wales to formulate a plan for the business.
The bank has a succession fund which is designed to help successful business owners retire and pass firms onto a second stage of growth while protecting employment. It also has experience in the mobility sector, having invested £4m in industry concept Middletons last year, which is fast becoming a dominant retail force in the sector.
Bounds, who has a background in the City and has helped launch concepts in the care sector before, explains that he was attracted to Snowdrop largely because of the potential it appeared to show.
The care industry in general, he believes, can be a lucrative place to be running a business today because of the UK’s demographics and the opportunity they present. An ageing population that has more disabilities means self-help is going to become an increasing trend, Bounds says.
“The NHS is struggling yet everyone is entitled to decent independent living. The initial investment was used mainly to buy [Snowdrop]. The Development Bank of Wales has invested in a 25% equity stake in the business on top of lending us money.
“We’ve left ourselves with a fair amount for a cash buffer and everything is in place. Our initial intention is to take stock of the business and look at what we can do to improve it in the short-term. Longer-term, we want to improve the branches considerably.”
With money to claw back, company bosses naturally have their minds set on expansion, opening new stores and adding to a workforce of 22 staff. Snowdrop currently has outlets in Haverfordwest, Swansea and Penarth, near Cardiff. Its directors will soon conduct a full-scale review of where they want additional branches to be but also insist they will remain opportunistic.
Bounds comments: “I’m sure we’ll get approached by people looking to sell their businesses and if it’s right and it looks viable then we’d consider it. But for the next six months we’ll just be open and opportunistic. We won’t be actively looking, we’ll just be waiting to see what falls in our lap, as it were.
“We don’t have [a timescale] at the moment. We will be quick-moving if we see the right opportunity but equally we will be measured and look at the locality, the competition and look at where the best offerings would be.”
Aside from expanding physically, Bounds and Morgan have identified improving Snowdrop’s existing portfolio as an absolute priority. The pair’s key strategy is to modernise the business so that it can keep up with the retail sector and customer demands.
Morgan has significant operations management experience and first and foremost will be looking at improving operational efficiency in the business, making small tweaks and using technology to bring in better governance and management.
It is no secret that many of the market’s mobility dealers are struggling to keep up with modern day retail trends. While a handful of new concepts have launched in the last couple of years which have aimed to remove the stigma attached to mobility and offer a fresh experience for end-users, generally speaking, the industry has been slow to modernise.
For Bounds, success for Snowdrop will rely on the retailer becoming a leader in its field and that means updating its shops, systems and operations. He is fully aware that he and his team must avoid slipping into what many of the industry’s dealers have become.
“At Trade Days we spoke to someone who specialised in the retail experience in mobility shops and he showed pictures of about 10 mobility stores and then images of places like Boots and IKEA. It was chalk and cheese. We know the market is growing and that the NHS is struggling to cope, there’s a lot more emphasis on self-provision.
But it’s a sector that hasn’t really embraced technology properly. We don’t want to make any really radical changes in the first three to four months but we do want to understand the business and get an idea of where [technology] can take it.”
Avoiding rash strategy shifts or flashing money about, Bounds and Morgan instead plan to refresh Snowdrop’s branches in the coming weeks. At their first board meeting, they brought together store managers and quizzed them on how they would improve customer experience with a limited budget.
Bounds says that store bosses have responded well to the proposed culture change and the team will begin to implement small changes to the layout of the branches initially. One will be reconfigured, better branding will be brought in for the Snowdrop name and stores will be made more accessible to customers.
Explaining the small tweaks in the first instance, Bounds says: “It’s about minor changes and tapping into the enthusiasm of the branch managers, initially. We don’t want to come in and bulldoze everything. We borrowed £500,000 from the Development Bank of Wales so we have tough financial targets to meet so we can’t be wasteful.
“The culture of the business has always been very cost conscious. That can be a challenge because sometimes people understand cost but don’t always understand value. It’s partly been about getting people to accept that they can actually spend money.”
Snowdrop’s investors and management are fully aware of how well the retailer needs to perform to ensure it makes a good return. Even without financial pressures, the South Wales mobility retail scene is fiercely competitive with the likes of Middletons and Bush Healthcare, each with more than 10 stores each, dominating the local landscape.
While Snowdrop has managed to survive with tough competition on its doorstep for 20 years, Bounds is under no illusions that the business must find an edge if it wants to be successful. He says that the company will aim to make itself customer-centric and sell based on end-user needs.
“One of the things that came out of the mystery shopping exercises that we did was that branch staff really take a strong interest in the customers and give them what they need, not what we want to sell. I think that is a differentiator.
“Going forward, I hope one of our differentiators will be that we understand the developments in the mobility world and bring that to the benefit of our retail and business customers. That’s longer term. The impact of technology is going to move enormously. What we’d like to do is to become the go-to place in Wales for any new major developments in the mobility market.”
Another advantage Snowdrop hopes to gain over its competitors is an ability to serve a diverse range of customers, rather than end-users alone. As an engineering-based business as well as a retail firm, the company will eventually be able to provide products and services on a more business-to-business basis.
It already sells to care homes, local authorities and housing associations but it wants to expand that offering and make itself a one-stop-shop for care homes.
Snowdrop’s strategy of serving multiple markets in what is an exceptionally tough and unpredictable retail climate certainly makes sense. For Bounds, the care home sector will be a key area for the business moving forward if Snowdrop can offer operators a valuable service.
He notes that the social care sector is struggling and that nursing homes and residences could make great use of a company that can offer them ideas and keep them abreast of developments in the world of mobility. Using its experience, Bounds says Snowdrop’s team can help improve things like handling and staff efficiency in care homes.
“What we want to do is come up with a proposition that can help organisations improve their own business model by working in partnership with them and using our expertise. That takes a while to implement but that’s the direction we’re heading. The other thing is on the retail side, we’re trying to decipher who the real decision-makers are.
“If someone comes in to buy a wheelchair, are they buying that themselves? Is it there children who are influencing them? Is it the occupational therapist? We want to understand who the deciders are and how they access that information. And we will be investing in improving our digital offering.”
Aside from the obvious opportunities presented by the care sector, Bounds and Morgan want to enter markets that general mobility retailers have largely stayed clear of.
On top of suppyling traditional products, Snowdrop will expand its engineering capacity and aim to work more closely with larger organisations. Responding to emerging needs, it will also look to capitalise on a growing demand for accessibility equipment and adaptations in places like airports and supermarkets.
Bounds comments: “All those sorts of things will come to the fore. Technology will make a massive difference to health and welfare. I want to make sure that we’re at the forefront of it so we can actually see what works and bring that to the attention of both retail and business customers and translate that into practical benefits for them and their customers.”
Snowdrop may indeed become a major force in the care sector in South Wales and the South West in the near future. But for now it will no doubt be preoccupied with tweaking the existing business and getting its name out to end-users.
One of Bounds and Morgan’s greatest challenges will be changing mind-sets in what is a traditional market. On top of that, its bold ambitions mean Snowdrop will need to balance its speed of growth with what it can afford to do.
That means a gradual and measured approach to expansion. But such a strategy is wise when we consider the fate of firms like Betterlife Healthcare and The Unlimited Company, which struggled to make their new concepts work sustainably after thrusting them into the mobility market untested.
What is interesting about Snowdrop compared to a number of other recent launches in mobility retail is that its investors have taken on a pre-established business. Perhaps a more cautious approach to growth will make the business more successful in the long-term.
Bounds certainly hopes so and his confidence in Snowdrop’s future is high, concluding: “David and I wouldn’t have bought into the business if we didn’t think we could make it work. We’re very keen that this is a 10 to 15-year growth story, it’s not a case of growing it for two years and then selling it to a private equity firm. Not only has the management team invested money but they’ve all certainly got a big emotional stake in the business.”