Interview - Nicholas Marshall, former chief executive, Garden Centre Group

Interviewed a few days before his dramatic exit from the Garden Centre Group, former chief executive Nicholas Marshall was bullish about prospects for the business. Terra Firma's £276m takeover and the appointment of former Virgin chief executive Stephen Murphy as chairman would appear to have sealed Marshall's fate after almost four years running Britain's biggest garden centre chain.

Nicholas Marshall, former chief executive, Garden Centre Group - image: GCG
Nicholas Marshall, former chief executive, Garden Centre Group - image: GCG

Q: How will the appointment of Stephen Murphy as chairman change your business strategy?

A: Our strategy is well known - to be the best plant retailer in the country. We're continuing to improve and to ensure that's how we're perceived by customers. We have a very strong brand in restaurants, which have done particularly well this year. We're concentrating on British food and cooking as much as possible in our own kitchens. We're also growing our concessions business, which is all systems go. The weather has been the worst for 100 years but our strategy of weatherproofing the business was particularly useful this year.

Q: What has done well and what has not done so well?

A: Our gardening club, which now has 2.5 million members, has been very loyal and we saw no drop off. The area most affected is bedding and particularly box bedding, but that's where you compete most with the sheds and they've had an horrendous year, though I can't say I've lost sleep over that. But I do feel very sorry for the nurseries. We're doing our best to build a 12-months-a-year business and that is good for nurseries because it gives them a customer for 12 months a year as opposed to having one big push in the spring. We started building our autumn business a couple of years ago and that is doing very well, so that gives an extra injection of cash flow at the end of the year.

Q: Have you taken all your plant reserves?

A: We've worked with some plant suppliers for 20 years so we have a constant conversation. It's not a contractual commitment that one says: 'Right, this is what we're going to do.' We work with them and try really hard to allocate as much as possible. With shrub people, we take in fresh stock every season. We constantly clear through our stock range so we're not carrying vast amounts of old stock, which means every spring we replace it so nurseries have lots of orders for fresh stock and only top-ups may slow because of the weather.

Q: What about having to discount?

A: We constantly discount each year because we hate sitting on old stock. It's part of our normal process so this year is not a shock to our system or our margins. We lost a bit of summer bedding and, yes, we wish the weather had been better, but we have managed to control our stock and margins have held out, and we're in good shape.

Q: How have other areas of the business fared?

A: Restaurants have been outstanding this year because when the weather is cooler people will spend in them. We're well ahead of last year. We have one charity concession in 129 centres. It's novel and someone came along and asked us, so we did it. Our concession business has been extraordinarily strong, much to my amazement because one in six high street shops has closed and yet we have unprecedented demand for space. That is the power of the gardening club. Other retailers realise their customer profile is similar to ours so we're the place to be. We don't have a single concession partner who isn't looking for more space.

Q: Are you still looking for more garden centres?

A: The days of ridiculous prices being paid for garden centres have come home to roost. We have much to do at our existing portfolio so we don't need to buy. We'd only buy good ones at sensible prices. Terra Firma is one of the largest funds in the country if not the world and we have significant funds behind us to carry out developments for which we have planning consents. Every centre is constantly being improved from several-million-pound projects to much smaller ones.

Q: After a poor season, the future for some garden centres must be in doubt.

A: There are a lot of question marks over a lot of people and we had a big question mark over us for the last couple of years, but that's gone now, which puts us in a very good position to take advantage. It's not a question of whether, it's a question of when. Bank lending continues to be extraordinarily tough and I feel for small garden centres. It won't get any better in the foreseeable future, no matter what the Government might want.

Q: So how have you done compared to the opposition?

A: I feel sorry for the sheds' suppliers. It must have been very tricky for them, but if you play with fire. We're going better than we thought. If a year ago you had said the weather would be bad in April, May, June, July and August, I'd have said the effect would have been devastating, but it hasn't been so we're thrilled.

CV

1984: Founded Country Gardens

2000: Sold Country Gardens to Wyevale for £108m, founded Country Homes & Gardens

2008-12: Chief executive, Wyevale - later renamed Garden Centre Group.


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