John Pattison, CEO at Sterling Furniture Group, shares an insight into how the business is building for the future as well as expanding their retail footprint in its 50th anniversary year.
Back in May, Big Furniture Group were invited up to Glasgow to meet the team behind Sterling Furniture Group’s revitalised growth strategy. As Scotland’s leading independently owned home furnishing specialist, the business, which has been established since 1973, has undergone a rapid transformation in the last year, ever since John Pattison joined as CEO back in August 2023.
The senior team, which still includes family members Euan and Murray Graham, who sit on the Group and Executive Boards and George Smith Knowles, grandson of founder George Knowles, who sits on the Group Board, has also seen an extensive reshuffle. Since John joined – and returned to Glasgow – the ex-ScS Commercial Director has appointed four new directors to his leadership team.
These include Kenny Barclay as Chief Financial Officer, Matt Bonar as IT Director, Donna MacPhee as People Director and Silvia Hernandez as Commercial Director, who joined the business last month. You can meet the team during this feature, but for now, the attention turns to further progress the company has made during John’s short tenure so far.
Alongside bolstering the leadership team, Sterling has also continued to strengthen in many other areas throughout the business, as well as instigating a change in style, tone and approach to engage with the wider colleague team on key matters such as company values and colleague communication.
Furthermore, Sterling has secured significant new funding in a new and extended arrangement with banking partner Royal Bank of Scotland and mapped out ambitious plans for the years ahead, including several planned new stores across the Group, starting with a major new 50,000sqft Sterling Home store at Hillington in Glasgow, which is anticipated to open by the end of the year.
As for group performance, Sterling recently reported its latest accounts for the 18-month period to August 2023, where turnover grew from £55.4m in February 2022 to £83.6m. Pre-tax profits dropped from £4.1m to £43,870, with the results for the prior period incorporating the end of a number of Covid19-related reliefs such as Furlough and Non-Domestic Rates support.
In the accounts, Sterling acknowledges that “the material decline in profitability for the period is also reflective of the historic lack of action taken to address the cost base of the business given reduced sales revenues and inflationary cost pressures”.
However, over a comparative 12-month period, Sterling said that sales were up 3% by £1.6m. And since the period end, Sterling has reported like-for-like positive growth, with a higher order book and expects to deliver pre-tax profit growth for the FY24 as the transformation continues to build momentum.
“It’s undoubtedly been a challenging period, we needed to take prompt and decisive action to set ourselves back on a sustainably profitable course, but I firmly believe that there are exciting times ahead for Sterling, all our colleagues and customers,” John said. “To that point I really want to thank all the Sterling team for their incredible hard work, commitment and support in my first nine months, where we’ve made several significant changes across the Group.
“We’re powering ahead with the major rebrand to our Sterling Home marque and our leadership team has been reinforced by a number of significant senior hires that have already put the company in the best possible position as we build on the legacy created by George Knowles and embark on the next 50 years.
“This is a historic Scottish company with a long-cherished reputation for quality and we’re brimming with ideas for how we’ll ensure Sterling is leading the way as the home of inspiration for Scottish consumers.
“We’re delighted to have received, and agreed, credit approved terms for a £10m banking facility from Royal Bank of Scotland, which we expect to confirm terms on over the coming weeks. In addition to consolidating Sterling’s existing term borrowings, the Facility provides expansionary funding, in the form of a Revolving Credit Facility, to support the exciting growth and development of the Sterling estate over the next five years. Working with a Scottish bank that wants to support us to grow is hugely important, and the team at RBS have listened to our plans and really stepped up to work with us. We’re really looking forward to working with them.”
On the new store expansion plans, Sterling has agreed Heads of Terms on a potential 15-year lease at the premises near Glasgow Airport. John revealed that the location “has the potential to be one of the best retail sites in Scotland”, with the store also featuring the Group’s second garden centre, which will take an outdoor space of 6,500sqft.
Furthermore, the store will include a significant bed area, hosting 36 king size beds with seven to eight room sets, as well as a dedicated 3,000sqft space for flooring and a gifting section near its café. It is anticipated that the store will generate 60 jobs, with 40-45 being full time.
“We’re excited about the new store and it is the perfect location for us to expand,” John added. “We’ve been working on this location since I joined the business. The move is part of wider plans to expand our group, for both Sterling Home and Forrest Furnishings fascias, with more showrooms earmarked for the future. We’re entering an exciting period of growth for the business and the expansion plays a key part in this.”
As John revealed, Sterling has plans to expand the Sterling Home fascia to 10 to 12 showrooms from the existing six over the next few years, while its Forrest Furnishing brand will also see an expansion, with 10-15 stores planned to open too. For Forrest, target areas include smaller Scottish towns and cities such as Perth and Dumfries as the group continues to invest in its physical portfolio.
From stores to screens, Sterling is also launching a refreshed TV campaign, where during the summer months the business will be on the screens in partnership with Good Morning Britain. “Viewers in Scotland can look out for our new Sterling Home ads throughout July and August,” John said. “We have secured 135 coveted 10-second spots during Good Morning Britain on STV to compliment the wider Summer Sale campaign which is due to launch on 3rd July, with all our new style TV and Radio ads voiced by Two Doors Down actress Joy McAvoy.
“We’re ready for the future and we’re building a fantastic team to drive our growth. Through our refreshed leadership team, clear vision for growth, ‘right-sizing’ our cost base and our exciting new store plans – starting with Hillington in the coming months – we are looking forward to Sterling’s next 50 years with optimism and confidence.”
Meet the team shaping Sterling’s future
John Pattison – CEO – appointed on 7 August 2023
“It’s a privilege to be leading a renowned Scottish institution like Sterling, particularly at a time of generational change in our ownership, with new energies and ambitions, where new legacies can be created for the Group.”
Murray Graham – Management Information Director – appointed on 1 October 2023
“Being part of such an experienced Executive Team, learning from those around me and taking the business founded by our grandfather forward to new heights.”
Euan Graham – Marketing & Digital Director – appointed on 5 February 2024
“I’m delighted to help drive the evolution of our brand in the digital era.”
George Knowles – Environmental Project Manager – appointed on 9 October 2023
“It is hugely exciting to be part of a dynamic new team who are all working towards a strategic growth plan. I am specifically focused on contributing to the delivery of our environmental and sustainability’s goals.”
Kenny Barclay – Chief Financial Officer – joined in September 23; appointed as CFO in February 2024
“The opportunity to shape, drive (and ultimately deliver) a hugely exciting growth plan for a business with such fantastic heritage.”
Donna MacPhee – People Director – appointed on 7 August 2023
“I am thrilled to take on the role of People Director because it offers an incredible opportunity to make a meaningful impact on Sterling by fostering a positive and inclusive workplace culture to contribute to the company’s success and help our people thrive.”
Matt Bonar – IT Director – appointed on 6 April 2024
“I’m looking forward to pushing boundaries with our digital offerings through innovation, execution, and good design/user experience.”
Silvia Hernandez – Commercial Director – appointed on 3 June 2024
“I see very few brands out there today with the rich history and the high quality-value ratio of Sterling Home; to join the team at such an exciting time of growth is a real privilege for me.”
Photos by Mike Wilkinson for Sterling Furniture Group
