SME profile: Fit-out firm enters new territory by targeting Chinese companies setting up in London
Fit-out specialist Margolis will enter a new era this summer as managing director Geoff Andrew completes a management buy-in of the century-old family firm.
Since joining, Andrew has helped increase turnover at the company 448% in five years, up from £4.17m in 2006-7 to a projected turnover of £18.7m last year. He set up the management buy-in in 2007 and is now targeting work from Chinese firms setting up in London.
Margolis’ profit also rose by two thirds last year, from £350,000 in 2009-10 to a projected £900,000 in the year to 31 May.
The firm will continue using the Margolis name for at least the short to medium term, when the family pass the ownership on to his team, Andrew says.
Margolis offers commercial fit-out across the country, but focuses on contracts in the City and West End of London.
The market is moving away from opulent aesthetics to more functional design
Geoff Andrew, Margolis
The firm’s growth has been achieved through securing contract wins with high-end commercial clients such as the Bank of China, Moet Chandon and Toyota, says Andrew.
“We have had to be fleet of foot to continue to win work at decent margins,” he said. “Our margins have actually been increasing along with turnover.”
One of the areas Margolis has been targeting is work from Chinese firms looking to set up offices in the UK. As well as winning work for Bank of China, Margolis has also carried out an office fit-out for energy giant, PetroChina, in London.
The firm has set up a Chinese website and a sales desk headed by a Chinese speaker specifically to target this growth market. Andrew is also trying his hand at Mandarin and says he is finding the language “fascinating”.
The company is also looking to respond to tighter budgets with “off-the-peg” standardised fit-out packages that set out a series of lower-cost standard designs.
“We negotiated with our subcontractors to get the same products for less money and then we packaged them up.
“We’ve had good feedback from clients as it offers them cost certainty,” he says.
So far an office service provider has taken up the offer, which was launched earlier this year.
Andrew says the firm is always looking at new markets and trends: “The market is moving away from opulent aesthetics to more functional design,” he says. “Even US law firms are returning to classic designs to assert their brands.”
Andrew cut his teeth in an altogether different environment to the clean-cut world of office fit-out he inhabits today.
Son of a South African father and English mother, he started his career in Africa working on a variety of projects, including a series of car manufacturing plants in Botswana.
He came to the UK 10 years ago and says Margolis benefited from the recession by mopping up talented out-of-work fit-out specialists.
“The recession meant we had access to staff we might not otherwise have had and we’ve kept a very good team.”
“The design quality is something we’ve really focused on,” he continues. “The talent that goes behind the design is the most important thing.”
A belief that is obviously felt within the firm; Margolis’ headcount has jumped a quarter in the last two years, up from 30 to 40 staff.
Andrew also says a profit sharing scheme for everyone at the firm helps incentivise staff.
Margolis in numbers – financial year to 31 May
Employees 40 (35 09/10)
Turnover £18.7m (£10.2m 09/10)
Profit £900k (£350k 09/10)