FD Interview: Trevor Reeves

FEW FINANCE directors live to see their business literally go up in flames. But that is precisely the experience of Trevor Reeves, FD at House of Reeves, the Croydon furniture store that famously became the victim of arsonists during the London riots back in August.

Indeed, among the few pictures that became emblematic of the violence that seemed to grip the nation’s inner cities, none is perhaps more memorable than the inferno that engulfed the 100-year-old store at the end of Tamworth Road in central Croydon. The pictures ran endlessly on television and in the press, the flames all the more dramatic being photographed at night.

Eye witness

Reeves, alerted by a friend to a crowd gathering outside the store, arrived in time to see two people run from the building and made the call to the fire service himself. Sadly, the hard-pressed local brigade took longer than usual to arrive, giving Reeves time to watch the flames take hold of the building.

“When you see the smoke and you see a couple of flame licks, you know that’s the end – the whole lot’s going to go. Knowing the construction of the building and the age of the building… your heart sinks, and that’s it,” Reeves recalls.

House of Reeves has been trading in Croydon since being founded in 1867 as Ye Olde Curiositie Shoppe. For at least three generations it has operated out of two sites on Reeves Corner. ?e fire levelled one entire site, leaving the other singed and with considerable water damage to stock. Walking past the site now, two months after the event, passersby can still smell burning from the blackened windows of the Eagle community centre across the road.

Reeves estimates the business lost about £250,000 of stock, plus the building – part of which it owned, part of which was leased. ?e sales floor of the lost building was about 6,000-7,000 sq ft, plus there were two other floors, so Reeves calculates the total floor space lost could be more than 12,000 sq ft. Because the store had evolved over time through joining together a collection of smaller shops, there were no accurate drawings or measurements for the building’s footprint.

Despite being there as the structure burned, Reeves says he never thought it would be the end of the business. Even as it became clear the store was lost, Reeves was making notes – early recovery plans – on his phone for what to do next.

“In my phone, I’ve got notes along the lines of: ‘Must do a stock take. Can I get into the computer records? What do we need to do tomorrow. Can we deliver?’,” he says.

At 2am, Reeves persuaded the fire service and police to let him into the second building to run some quick checks on the computer systems to make sure they still worked.

About half of House of Reeves’ turnover came from the lost store, meaning the business automatically faced the loss of half its business for six months running up to its March year-end. And this was for a year in which Reeves expected turnover to improve by about 10-15%.

“We all decided the best thing to do was just carry on trading. We’ve still got customers who are expecting deliveries, we’ve still got people who owe us money for furniture that is due to come in. If we shut the doors, the impression is that they’re going to be left on the sidelines, and that wasn’t the right thing to do,” he says after revealing the insurance company had urged Reeves to find a new location in the immediate aftermath of the fire.

But the Reeves shareholders rejected this option. ?eir view was learn to trade out of one location and rebuild.

Bruised, not battered

Reeves readily concedes that turnover has been dented. “We’ve had weeks, individual pockets, where we’ve done more business than we would have expected out of the two shops together,” he says. “Anecdotally, I suppose – just a gut feeling – it’s probably 20% off since the fire, but don’t forget that in the first week of the fire we did no business at all.”

The decision to keep on trading has meant Reeves has moved to focus on core ranges – mostly sofas. Planning the stock has also brought a change in model.

Instead of items being immediately available, customers will buy now and then take delivery a little later than usual. The critical period for Reeves will be the Christmas and New Year season, when he says the company would usually make the balance of its profits. This means a focus on ensuring the stock and logistics of moving it are right.

Except for a minor concern about fulfilling a VAT bill, the business has few cash worries. Foreign currency for imports was also in hand and the business belongs to a buying group that plans payments.

Strangely, Reeves does not see the lessons from the fire as directly financial, apart from the value of having good insurance. Though perhaps unsurprisingly, the issue of insurance is one of the few moments that Reeves really becomes animated about the fire.

“How bloody important is that, I tell you. The thought of what would have happened if we hadn’t had good advice on the insurance and what it should cover – two years of business interruption insurance, the stock cover, the contents cover,” he says.

He also makes the scary observation that over time in a business, things can change significantly and insurance is one thing that is rarely updated to take account of it.

But the real lesson for Reeves – and he does not hesitate in pointing it out – is the value of good publicity. It has to be said he readily agreed to our interview and photographs, and even Reeves Snr, now in his 80s, was called out of retirement to front the press communication in the wake of the fire. The store was inundated with goodwill messages, cards and letters, which were until recently included in a special display in the shop.

“I think it’s an awareness of the value of good publicity and marketing, which is an art form,” he says. “It’s something that doesn’t go well with finance directors. We’re not known for our artistic talents, but do not underestimate the amount you can gain from it.”

He adds: “Without that we would be 50% down. We would have lost half our business – really lost half our business.”

Hope springs

Ironically, the fire seems to have convinced Reeves that the future of the business remains in the heart of Croydon, instead of taking the opportunity to go out of town, turning the shop into a retail park outlet. And this, despite Croydon’s obvious need for regeneration, the startling number of competitor outlets, and the violence that plagues the town centre.

Reeves is clearly in awe of the support the store received locally. So impressed, in fact, that it is possible he may have changed his view of Croydon and its prospects as a business location. He makes mention of a stabbing and a shooting near the shop, and even confesses that Croydon is sometimes “not a nice place to be”. But then he adds, and with some intent: “I’m just talking off the cuff now, but the strength of the business is in staying here.”

And that’s where we leave it – Reeves with much work to do on the recovery, and Financial Director having played its role in the recovery plan. Pleased we could help. ?