Organic Growth Masterclass: Collingwod Lighting, backed by Baird Capital
Empowering employees, expanding the product range and improving digital capabilities helped power organic growth at lighting business Collingwood, says Baird Capital’s Partner James Benfield and Director Andy Dyer.
Collingwood is a designer and supplier of residential, commercial and exterior LED luminaires to the professional refurbishment and new-build markets in both the UK and France.
Baird Capital’s Partner James Benfield and Director Andy Dyer say: “When we first encountered Collingwood Lighting, the team was largely made up of the founder owner’s friends and family, because he wanted to be surrounded by people he could trust. During our period of ownership, we added a new head of marketing, heads of project sales and international sales, and a head of marketing, having introduced the CEO and CFO/COO prior to our acquisition. This was done sensitively and over a period of time to enable the company to adapt.”
They add: “When you invest in privately owned business, it is natural for the staff to be apprehensive, not knowing what changes will happen. As a result, we spend a lot of time and resources focussing on employee communication and engagement. With Collingwood, we instigated twice-yearly employee engagement surveys, helped with team-building events, and encouraged the CEO to focus on more frequent employee communications through town hall meetings and newsletters. We also focussed on ensuring it was a great place to go and work every day through initiatives such as improving the kitchen/common areas, and investing in the R&D test lab to make a productive working environment.”
“A big part of the story behind Collingwood was not only improving management, but it also involved empowering the team and energising the whole of the employee base.”
PRODUCT PORTFOLIO GROWTH
They say: “We identified a business that had an exceptional brand and a fantastic reputation in its channel, with a smaller product set than their peers and competitors. In order to deliver on the growth and diversification of the product set, we firstly identified that the sourcing function would need to grow and be further professionalised to expand their supplier base in Asia during our hold period. The whole product development function became the engine for growth. The aim of the team was to get products to market twice as quickly as the competition.”
“The business was historically very strong in residential downlights and landscape lighting, and these categories only made up c. 1/3 of the market for LED lighting products in the UK sold through wholesale channels. We started entering the commercial channel, which is a very large market in the UK, and received great traction on these products. We remain differentiated in the market by energy efficiency and innovations that were very good for both the wholesale channel and also the end user.”
“We also entered the light industrial market, the lights used in warehouses for example. Given the light output required for these large spaces, the energy and cost savings that can be realised from installing high quality LED lighting versus the old incandescent are very significant – as such this market faces strong tailwinds. As with the commercial product lines, the business spent a lot of time designing, developing and procuring these products ahead of launching into a very large end market that historically, Collingwood was not present in.”
“As a testament to the success of the new product introduction plan, 35 per cent of the business’ revenues at the point of exit were from products that had been introduced in the previous 18 months, and the business launched a record 61 new products in the year of exit, providing a strong platform for growth.”
MARKETING AND DIGITAL CAPABILITIES
Baird Capital Director Andy Dyer and Partner James Benfield say: “We set out very early in our hold period to re-design the website to ensure full product categorisation and technical support was available to the installer. For customers, the website provided them with local stockists and installers to make purchasing easier. For wholesalers, we invested in digital connections to enable visibility of stock levels and easier order processing. We also future-proofed the technology, ensuring the business could handle online transactions in the future, should the industry go down that path.”