Oldfields: A rightful share
Oldfields comes back
Richard Abela, CEO of Oldfields
Richard Abela, CEO of Oldfields
 
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Recently appointed CEO Richard Albela is helping to restore Aussie icon brush brand Oldfields to its place in the market as a quality leader in paintbrushes
HNN Sources
The late twenty-teens in Australia have seen a range of smaller Australian hardware-associated businesses finally give up on their plans to continue manufacturing goods in Australia, and turn to sourcing more of them overseas. One of the better known is GWA Group based in Adelaide. In what can only be described as a truly gracious move, the former CEO admitted that he had done some things that were not optimal, found a replacement CEO in Tim Salt, and set the company up to continue to recovery, if not yet complete success.

The recipe that Mr Salt applied is something of a familiar one. He restarted innovation, research and development, especially in the Caroma brand of sanitaryware, controlled costs, and boosted the overall image of the brand.

Richard Abela, who took over as CEO of the legacy paintbrush firm Oldfields in early 2017 has followed something of the same path as he has worked to revitalise what had become a small ASX-listed company balanced on the edge of a very precarious P&L. Like Mr Salt, Mr Abela turned to research and development, setting about to build what the company would describe as one of the best possible paintbrushes for professionals on the market today.

However, he has taken the company much further than that as well, seeking overseas markets for products such as its scaffolding, and moving sales of its shed business to a direct online model.

While HNN is fairly sure that Mr Abela has not read the books written by modern startup guru Eric Ries (author of The Lean Startup, and The Startup Way), it is interesting how much of what he has done at Oldfields bears a strong resemblance to the strategies that Mr Ries recommends. One fundamental of that kind of startup thinking is simply that a company is nothing without a customer base, and that the only way to find out what customers want is to involve them in the development process and not just by asking questions and hearing the answers. As Mr Ries points out (frequently and with some force), customers are seldom able to really articulate what it is they want. To work out what that might be it is necessary to not just listen to them, but also to watch their actions and reactions.

It is, we could say, management by doing, rather than management only by meeting and consulting. It takes about five minutes of being in the same room as Mr Abela to grasp that he is strongly committed to this kind of doing.

When HNN met with Mr Abela it was January, and we trekked through the simmering heat of a Sydney summer day to meet him at the neat, modest factory where Oldfields continues to produce some of its products. He began our conversation by telling us about the new line of brushes the company had launched and how well they were doing in the market.
The brush that was launched last year has gone really well. It s really exciting for us. We launched it in November 2017, so the pickup has been very, very encouraging. We are already out of stock of one size... And we ve been having conversations with people about brushes that we haven t had for a long time.
The good news is it s coming from the trade. These are the guys who are using it and if you recall at our launch, we had trade people together with store owners and they are the ones providing that feedback.
We really went out there to say that Oldfields is back and I think that is the truth. We will continue to push that story.
In months and years to come it will be an ongoing story... Now we will go through our whole range and there may be some adjacent products launched in the future. I was out in the back yesterday and I saw that our warehouses are now struggling to keep up. That is really great, a good problem to have.
So we are under some pressure to get orders out. And it s different because historically if we were largely in the DIY market the demand might be prior to Christmas, but now it s the New Year when all the tradies are back at work. It s a shift back towards our core, and what we are traditionally good at. The tradies seem to be saying, We are so glad to have Oldfields back . It s not about us necessarily, but they are buying the brushes and saying this is great .
Momentum has really started to kick in, replenishment orders are starting to flow in. The stands that we developed, there are now 180 of those in stores across Australia. We didn t have them eight weeks ago. There s a couple hundred more to go and in our pipeline, then there s another couple hundred more to go out. People are trying it, they are liking it, and they are coming back.
It s a journey back. We re not all the way back in five minutes, but the journey back has commenced. For us, this is long-term. This is the first year of a five-year plan.
The good news is the first step has been good. We are not sitting here saying we re in just five stores or six stores; we are already in over 120 stores. Soon we should be in 250 stores. That rollout is gaining momentum and that s partly because we do have the history and the legacy. We have a great roller product so to match the brushes up now is really quite exciting. It is taking hold. Even industry experts are saying so.
It s rewarding and all that but we ve got a lot of work to do. It s good to know that the investment we made sends us back to our core, and the target person which is the tradie is saying this is great .

While very pleased with the first indications of success in the new strategy, Mr Abela is also very quick to indicate that much of that success (as with GWA Group) is not entirely due to him, as the process was started by the previous CEO.
It was about a two-year process. And I ve only been here about 13 months, so my predecessor needs to take credit for the development of that. To a large extent that s my predecessors doing. Tony Grima needs credit for that. My predecessors, when we went through a tough time, did all the hard work to get us into a position where I can grow. I am fortunate enough that both those guys worked really hard and they got us into a position of a low cost base and I am the beneficiary of their hard work. So I can now grow that.
But it s also a re-positioning of where we are. There is no doubt that this business and many others like this business, were seduced by the big boxes. But to be honest with you my realisation when I arrived was that we largely had a homogenised market. We really did have white bread in a white bread shop.
It s a particular kind of philosophy, you can have any bread you like as long as it s white. And for me, that s not what Oldfields is. Oldfields is trade traditional. Yes, there are segments of that market that are disposable and certainly we can deal with that, but that s not our core.
Having said that, that [low product cost] discipline is not lost. So the cost savings must continue. For us it s a continuously competitive environment, so the discipline that they instilled must continue and it is continuing. We are adding more costs now because we want to grow, that comes with growth, but it doesn t mean we lose focus on costs.

Though Oldfields did take the decision to not be a preferred supplier with the Metcash-owned Independent Hardware Group (IHG), Mr Abela is quick to point out that this was not a question of slamming the door on that relationship or that kind of business. Overall his concern seems to have been that concentrating solely on price discount and the ultra-lean production processes that go with it would not be good for a company that really needed to start standing up and presenting a clear, understandable identity to the market.
We headed down that road [in the past] and strategically that may have given us some volume but now it s not where we want to be. And so we made a decision early 2017 to not exit that market completely but that s not where our focus needs to be...So we did break some relationships with retailers who wanted to take the whole thing off us and we have to make commercial decisions for our shareholders and for our employees and our community, which is our trade community. And we made those tough decisions.
The good news is we re back now to where we wanted to be. It s taken a year and it will take another year before we are even stronger. But the margin is strong and we are heading in the right trajectory of where we want to be. So we are not on the path of this forever cycle of debating with buyers and big chains who want it 5% cheaper each year.
There is nothing wrong with seeking cost savings but not to the point where it starts destroying you. And I think for us, getting back to our core has been very very important. So that s what we ve done.
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This is only an introduction to this article. To read the full article, please download the PDF of HI News Vol. 4, No. 3 at:
HI News 4-03: Richard Abela restores Oldfields
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