BGF – the UK’s most active growth capital investor – has invested £8 million into Midlands-headquartered UK Flooring Direct, which recently opened a base in Coventry, to support its ongoing growth ambitions.
UK Flooring Direct is an online retailer supplying quality own-brand wood, laminate, and vinyl flooring direct to consumers and trade, growing from an early ecommerce pioneer, to now being regarded as a market leader in the home improvement market.
The business was set up by Nuneaton entrepreneur and CEO Jason Ashby in 2005 with £299 to purchase a website that would form the original platform for the business. UK Flooring Direct went on to generate sales of £750,000 in its first year and now, 15 years later, expects revenue to top £50 million this year, having doubled sales over the last 24 months.
On the back of exceptional growth, UK Flooring Direct expanded into a second site in Coventry last month with extended warehouse, office space and has plans to create 50 additional roles, taking its headcount to more than 200. The business offers a virtual showroom and room visualisation, contactless deliveries, and free samples, allowing consumers to purchase online with confidence.
BGF’s investment will be used to scale the brand and support significant range extensions in both existing and new product categories, as well as opening an office in China to support procurement and product development, and ongoing enhancements in customer experience. Keith Pacey is currently Chair at UK Flooring Direct and will continue in this role to support the ongoing growth of the business.
The expansion of UK Flooring Direct’s partnerships and connections with the trade sector will also play a significant part in its growth post investment. Trade sales have increased 25 per cent year on year, with significant scope for further expansion. UK Flooring Direct will be looking to capitalise on ongoing demand, underpinned by the sector’s increasing move towards digital supply channels.
Jason Ashby, CEO of UK Flooring Direct, said: “We recognised the importance of digital 15 years ago and have invested in building a market-leading technology platform that customers want to interact with and that provides convenient access to the products they’re looking for. This has underpinned our growth to date, however, the pace of digital transformation we’ve all experienced this year has resulted in a surge in ecommerce sales that we have been perfectly positioned to address.
“BGF’s backing will allow us to unlock further growth quickly, expand our market share and move into complementary markets. We have built a strong relationship with the BGF team which understands our long-term ambitions and have a good record of successful investments in the sector. The scale of BGF’s portfolio, reach and influence, combined with a supportive local team in the Midlands made them the obvious partner.”
Recent figures from Barclaycard show retail spending on home improvement was up 26 per cent compared with September last year. The key driver of UK Flooring Direct’s growth has been this channel shift in home improvement, with an increasing propensity for consumers to purchase online. Approximately 53 per cent of consumers purchased home improvement products online in 2019, growing 15 per cent year on year and making it the fastest growing consumption channel (Mintel).
Aaron Baker and Subi Inayat from BGF led the deal with support from Gurinder Sunner, head of BGF’s Midlands office.
Aaron Baker said: “With a strong, experienced and entrepreneurial management team, this is a business that deeply understands customers through its data-led approach, and the result is a truly market-leading ecommerce proposition capable of significant scale.
“Flooring represents £4.4bn of the £20bn UK retail home improvement market. With over £1bn of flooring purchases already online, and growing, UK Flooring Direct’s market insight and ecommerce pedigree makes it well placed for further growth. We look forward to working with Jason and the team to achieve the next milestones in the company’s upward trajectory.”
UK Flooring Direct is one of a group of companies which has been collectively dubbed as the UK’s growth economy. This comprises more than 21,000 businesses based across every region in the UK with a turnover between £2.5m and £100m and year-on-year sales growth outpacing GDP.
Gurinder Sunner added: “BGF is committed to backing growth economy businesses and the entrepreneurs that will help to drive economic recovery. UK Flooring Direct epitomises this as the business continues to expand and create employment across the Midlands and beyond.”
The advisors to the transaction were:
• BGF: Browne Jacobson LLP, BDO, Winterbrook Ltd and OsbornChapple
• UK Flooring Direct: Hill Dickinson LLP (Liverpool)