John Pattison, CEO of Sterling Furniture Group, shares his vision for how the business is building for the future as well as expanding its retail footprint in its 50th year.
In May, Big Furniture Group was invited to Glasgow to meet the team behind Sterling Furniture Group’s renewed growth strategy. As Scotland’s leading independently owned home furnishing specialist, the company, which has been in existence since 1973, has undergone a rapid transformation in the past year, since John Pattison joined as CEO in August 2023.
The management team, which still includes family members Euan and Murray Graham, who sit on the group board and executive board, and George Smith Knowles, grandson of founder George Knowles, who sits on the group board, has also undergone a major shake-up. Since John joined – and returned to Glasgow – the former SCS commercial director has appointed four new directors to his leadership team.
They include Kenny Barclay as CFO, Matt Bonar as CTO, Donna McVey as chief people officer, and Sylvia Hernandez as chief commercial officer, who joined the company last month. You can meet the team in this feature, but for now, the focus turns to more of the progress the company has made during John’s short tenure so far.
In addition to strengthening the leadership team, Sterling also continued to strengthen a number of other areas across the company, as well as bringing about a change in style, tone and approach to engaging with the wider team of colleagues on key issues such as company values and communication between colleagues.
Furthermore, Sterling has secured significant new funding in a new and expanded arrangement with its banking partner Royal Bank of Scotland and has ambitious plans for the coming years, including several new stores planned across the group, starting with a new 50,000 sq ft Sterling Home flagship store in Hillington, Glasgow, which is expected to open by the end of the year.
As for group performance, Sterling recently announced its latest accounts for the 18 months to August 2023, with turnover rising from £55.4m in February 2022 to £83.6m. Pre-tax profits fell from £4.1m to £43,870, with the previous period’s results including the end of a number of Covid-19-related reliefs such as furlough and non-local wage rate support.
In the accounts, Sterling acknowledges that “the material decline in profitability during the period also reflects the historical lack of action taken to address the business’s cost base given lower sales revenues and inflationary cost pressures.”
However, Sterling said sales were up 3% at £1.6m over the 12-month comparative period. Since the end of the period, Sterling has reported positive comparable growth, with the order book rising and expects to deliver pre-tax profit growth for FY24 as the turnaround continues to gain momentum.
“It has undoubtedly been a challenging period, and we have needed to take swift and decisive action to put ourselves back on a sustainable profitable path, but I firmly believe that exciting times lie ahead for Sterling, all our colleagues and our customers,” said John. “At this point, I would like to thank the entire Sterling team for their hard work, commitment and support over the first nine months, as we have made a number of significant changes across the group.
“We are moving forward with the Sterling Home rebranding process in a significant way, and our leadership team has been strengthened with a number of important senior appointments that have already put the company in the best possible position as we build on the legacy left by George Knowles and embark on the next 50 years.
“It is a historic Scottish company with a long-standing reputation for quality and we are full of ideas about how we can ensure Stirling leads the way as a home of inspiration for Scottish consumers.
“We are delighted to have received and agreed the approved credit terms for a £10 million bank loan from Royal Bank of Scotland, the terms of which we expect to confirm in the coming weeks. In addition to consolidating Sterling’s existing term loans, the facility provides expansionary funding, in the form of a revolving credit facility, to support the exciting growth and development of Sterling over the next five years. Working with a Scottish bank that wants to support our growth is crucial, and the team at Royal Bank of Scotland have listened to our plans and have been very quick to work with us. We are really looking forward to working with them.”
In relation to the new store expansion plans, Sterling has agreed terms for a potential 15-year lease on the premises, which is close to Glasgow Airport. John revealed that the site “has the potential to be one of the best retail locations in Scotland”, with the store also home to the group’s second garden centre, which will occupy 6,500 square feet of outdoor space.
Additionally, the store will feature a large family area, with 36 king-size beds with seven to eight sets of rooms, as well as 3,000 square feet of floor space and a gift section adjacent to the café. The store is expected to create 60 jobs, including 40 to 45 full-time positions.
“We are excited about the new store and it is the perfect location for us to expand,” added John. “We have been working on this site since I joined the company. This move is part of wider plans to expand our portfolio, both for Sterling Home and Forrest Furnishings, with more showrooms set aside for the future. We are entering an exciting period of growth for the company and expansion plays a key role in this.”
As John revealed, Sterling plans to expand its storefront to 10 to 12 showrooms from its existing six over the next few years, while its Forrest Furnishing brand is also set to expand, with 10 to 15 stores also set to open. 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 new TV campaign, which will see the company appear on screens throughout the summer months in partnership with Good Morning Britain. “Viewers in Scotland can look out for the new Sterling Home adverts throughout July and August,” said John. “We’ve secured 135 10-second spots on STV’s Good Morning Britain to complement our wider summer sales campaign which is due to launch on 3 July, with all of our new TV and radio ads voiced by actress Joy McAvoy from Two Doors Down.
“We are ready for the future and are building a great team to drive our growth. With our renewed leadership team, clear vision for growth, ‘tightening’ our cost base and exciting new store plans – starting with Hillington in the coming months – we look forward to the next 50 years of Sterling with optimism and confidence.”
www.sterlinghome.co.uk
Meet the team that shapes Sterling’s future
John Pattison – Chief Executive Officer – Appointed 7 August 2023
“It is a great honour to be leading an iconic Scottish institution such as Sterling, particularly at a time of generational change in our ownership, with new energy and ambition, where a new legacy for the group can be created.”
Murray Graham – CIO – Appointed October 1, 2023
“To be part of a very experienced executive team, learn from the people around me and lead the business that our grandfather founded to new heights.”
Ewan Graham – Marketing and Digital Director – Appointed 5 February 2024
“I am excited to help drive the evolution of our brand in the digital age.”
George Knowles – Environmental Project Manager – Appointed October 9, 2023
“It is very exciting to be part of a dynamic new team all working towards a strategic growth plan. I am particularly focused on contributing to our environmental and sustainability goals.”
Kenny Barclay – Chief Financial Officer – Joined September 23; appointed CFO February 2024
“The opportunity to shape, lead (and ultimately deliver) a very exciting growth plan for a company with a great heritage.”
Donna McVey – Director of Human Resources – Appointed August 7, 2023
“I am very excited to take on the role of HR Director as it provides a great opportunity to make a meaningful impact on Sterling by fostering a positive and inclusive workplace culture to contribute to the success of the company and help our employees thrive.”
Matt Bonar – CTO – Appointed April 6, 2024
“I look forward to pushing the boundaries with our digital offerings through innovation, execution, good design and user experience.”
Silvia Hernandez – Commercial Director – Appointed June 3, 2024
“I see very few brands today that have the rich history and high quality-to-value ratio as Sterling Home; and to join the team at such an exciting time of growth is a true privilege for me.”
Photos by Mike Wilkinson for Sterling Furniture Group
