KEY POINTS:
Six months ago, if you'd wanted to meet Don Barry in his office he'd have taken you to a carpark somewhere and ushered you into the front seat of his black Ford Falcon - his office for three months while he was setting up flooring supplies company Flooring Xtra.
The Manukau, Auckland-based company has come a long way since its June inception: from nothing but a licensing agreement and "a brand story in a folder", the company has rolled out 51 stores in six months, successfully luring 40-odd shareholders (some of whom have more than one store), mostly from rival retail brands: 14 former Flooring First outlets, 18 independents and 19 from the country's biggest carpet retailer, Carpet Court.
The company's annual revenue, based on the stores' figures from the past 12 months, is just over $100 million and chief executive Barry claims no other retailer has had such success in getting stores on board.
Like most businesses, the new company faces a tough year ahead: the latest figures show a 26 per cent drop in building consents for the year to November, the lowest annual total since the April 1994 year. But Barry hopes renovation and refurbishment will fuel the residential and commercial markets.
Despite a prediction by chairman Henry Van Dyk in October that the company could become the largest retail chain in the country, Barry says the company will focus on quality rather than growth for now.
"We want to be the best retail brand in terms of passion and commitment, not size. The name Xtra puts the onus on us to go that bit extra for the customer and [if you] get the quality right the quantity will follow."
The company's co-operative structure means lower overheads - a valuable cost saving when times are tight. It's also a model Barry says helped convince many shareholders to come on board.
Carpet Court's announcement last year that it was switching from a co-operative model to a franchise one was "something some owners weren't happy with" says Barry. Van Dyk, a former Carpet Court director, told the Herald in October the new structure meant it was "no longer financially acceptable for several stores and an alternative had to be found".
Competition is heating up in the retail flooring market. The Flooring Brands group, which owns Carpet Court and the Floor Store, reportedly now has about $200 million turnover and a third of the market after teaming up with Auckland retailer Hills Flooring last November.
Barry estimates that Flooring Xtra has about 15-18 per cent of the market, but won't be drawn into commenting on the competition, saying only that New Zealand hasn't had many retail carpet brands and more were "always on the cards".
Barry, who left Carpet Court in 2007 to set up a franchise building network after nine years as chief executive, says companies that joined Flooring Xtra saw value in the group branding and resources on offer. Some larger customers with national distribution liked the idea of a locally owned supplier.
"The owner operators have skin in the game and will go the extra mile for their customers because their business depends on it. [For smaller customers] if there's a problem it can be solved at the store. You're not given a phone number and [end up talking] to someone in an office building in Auckland or Wellington."
Nick Richardson, general manager of flooring products manufacturer and installer Gilt Edge Industries, is glad to have a new retail buyer in the market, the only one he remembers in the past decade.
Nearly all Flooring Xtra's owners were existing Gilt Edge customers and Richardson says getting them as a group gave his company the chance to package products and services.
As part of a sustainable drive, Flooring Xtra funds a tree-planting programme for the New Zealand Forest & Bird Society, and encourages owners to recycle old carpet for weedmat, while several provincial stores provide it to farmers to line roads for their cows to walk on.
Gilt Edge's foam underlay is recycled back to the company via delivery truck instead of being sent to the tip, and Richardson also applauds the new retailer's environmental efforts.
"It's about doing the right thing. They're important customers, and if we can support them without adding cost everybody wins. [Our support] isn't dollar driven, it's part of servicing that brand's commitment to what they're trying to achieve."
It's been challenging to keep up with the administration side of things because of the company's rapid growth, and the co-operative structure has meant a lot of organising consultation processes to keep everyone involved.
Setting up the company was a group effort, and the spouses of the five board members were "integral" to putting it altogether, says Barry. For example, his chartered accountant wife Sharon took care of that side of the business, while Van Dyk's wife Cheryl came up with the name, Marie Goodwin and Jude Rillstone took care of the staff uniforms and White and wife Julie worked on the company's branding.
All five board members (Barry, Van Dyk, Paul Rillstone, Rex (Butch) Goodwin and Andrew White) were involved at Carpet Court in either management, advisory council or board level, while Flooring Xtra's financial controller John Weijermars was Barry's financial controller at Carpet Court.
Barry, a former marketing manager for Mazda, reckons setting up the company has been more exciting than launching the Mazda MX5 sports car 18-odd years ago, which "took the motoring world by storm" and created a months-long waiting list in New Zealand.
"It's great to start with a clean sheet of paper and set up the business with the ethos you want."
But he admits there's also pressure to perform. "If people actually say, 'I believe in what you're doing, where do I sign?', you've just got to get out there and deliver."
