Volume down, margin up
New trends have emerged in the double glazing industry that have changed the way many companies operate. This is an observation made by Rob McGlennon, Deceuninck’s UK managing director, and Glass Times editor Nathan Bushell visited him to find out more.
“There has been a massive move over the last 18 months from people piling it high and selling it cheap to offering high margin products like our Heritage Collection,” Deceuninck’s managing director Rob McGlennon said directly at the start of his interview with Glass Times.
And the effect on the industry is massive, he said. For example, business owners can no longer keep drawing down all the money from their companies and then expect to sell them for “a king’s ransom”.
“This is being felt right through the supply chain,” Rob said. “Those companies moving away from the volume extruders, for example, are having to take on increases in price.”
This, in turn, is allowing suppliers to have faith in their high margin products and not be driven down on price. Rob even suggested that such is the turbulent nature of the volume end of the market that he is able to be selective regarding which fabricators he supplies.
Deceuninck’s Heritage Window Collection, including the new Heritage Flush Door and Heritage Flush Window, which won the G17 New Product award, has generated a lot of interest from fabricators and installers. Consequently, the company recently announced that January 2019 sales were up 12% year-on-year, and 2018 finished 21% up on the previous year.
The company’s other significant USP is its colour offering, and Deceuninck has invested in a massive 140,000ft2 new warehouse and £4.5 million in stock to meet its promise that coloured products are managed in the same way as white ones: ordered on day one, delivered on day three.
Despite offering “26 colourways from stock”, Deceuninck has developed its online ordering system to be able to cope with all orders, including a reduced minimum order on all products.
“You can order enough coloured transom for one window, if you want,” Rob said.
And the future for colour – like flush sash windows – looks very bright indeed, so much so that Deceuninck doesn’t include a white window in its showroom in Calne, Wiltshire, or send out white samples with its sales reps.
“By the end of 2019, we think the colour portion of our business will be 60%, rising to 70% in the next two years,” Rob said.
“One of our biggest fabricators makes more than half of its windows from coloured profile, and it expects this trend to continue upwards, driven by the demand for heritage frames.”
On this basis, Rob congratulates the team around him for helping Deceuninck’s customers grow – a nice sentiment, but encouraging to see it work in practice.
That said, Rob is still looking for new business, and is surprised by how many fabricators are considering moving away from well-established suppliers.
“It’s all about expectation,” Rob said. “Customers get in a rut with their suppliers, and large fabricators in particular are moving away from budget brands; price has been driven too low, and too many companies are chasing the same customers, which is why our higher margin products are performing particularly well.”
Rob also confirms – in line with trends seen elsewhere – that some smaller fabricators are moving away from producing standard white windows altogether, instead concentrating on manufacturing a smaller number of windows that promise a higher margin.
“Once we get our Heritage Collection in front of them, in a great range of colours, and on a short lead time, we suddenly find ourselves in a position where we can supply even more products.”
Despite this very rosy view of the near future, Rob is adamant that he doesn’t want Deceuninck to grow too big.
“Producing high end products in an extensive colour choice isn’t a volume proposition,” he said. “Our Heritage Flush Window, for example, accounts for almost a quarter of all window profile sales. If we grow our business too big, then it will be at the expense of the values that have got us to where we are today, and we don’t want to go backwards.”
