Retail display success no flash in the pan
Friday, June 13, 2008/
The wide-ranging demands of point of sale and retail display requires a fleet footedness that Flash Photobition’s Fred Uden and his team have managed to master. By MIKE PRESTON
By Mike Preston
The wide-ranging demands of point of sale and retail display requires a fleet footedness that Flash Photobition’s Fred Uden and his team have managed to master.
Ownership turmoil has been the death of many a business, but for retail display business Flash Photobition, and its chief executive Fred Uden, it has proved an unlikely springboard to success.
Over the past decade, Uden and co-owners Peter Madison and Tony Bolton have built Flash into a fast-growing company with $20 million turnover – up 15% on last year – and a strong position in the retail display business.
But that almost certainly wouldn’t have happened had the business not been snapped up as part of an aggressive international expansion strategy by listed British company Photobition in 1998.
At that time, new technology was emerging that made it possible to print small volumes of large digital images on a cost-effective basis, but significant capital investment was required to buy the machines able to do the job.
With a turnover under $10 million at the time, it would have been difficult for Flash to get that capital on its own. But the British-based multinational had the deep pockets needed to make it happen, pumping millions into the business for the new equipment needed to transform Flash from little more than a photo processing lab to a digital printing operation.
That investment put the business on the road to growth, allowing Flash to take a strong early position in what was to become its core business – large-scale graphics and prints for the fitout, decoration, branding and product displays of retail stores and other commercial spaces.
Then, in 2001, Flash management and staff received the news that its British parent company was on the rocks, and would be forced to sell some of its international operations in an attempt – ultimately unsuccessful – to stave off bankruptcy.
According to Uden, although the Australian business remained profitable throughout that period, the news of its parent’s woes and the forced circumstances of its sale created uncertainty for staff, customers and in the broader market.
“Of course the competition had a field-day with all the talk that we were going down, and of course there was tremendous uncertainty among the staff we had to deal with, so it was a messy business,” Uden says.
But while news of the sale shook the business, it also presented a huge opportunity for Uden, Madison and Bolton.
With head office desperate to sell, and little interest from a cautious market, the trio were well placed to bid for the business.
“It was always a profitable business, but we were really the only potential purchaser – we knew the company and knew it wouldn’t run without us, so our negotiating position was strong,” Uden says.
The result? Uden and his partners were able to purchase a profitable and growing business for a bargain price (Uden will not reveal the amount they paid, but says it is less than a quarter of what Photobition forked out for Flash just three years earlier).
The sale was particularly satisfying for Uden, who had started in the darkroom of the business before working his way up to the ranks of management and then, in 2001, part-owner and chief executive.
“It was an incredibly exciting time. Obviously we always had a strong belief in the business, and it was an absolute blessing for us to have this opportunity to buy the business in a very fortunate set of circumstances,” Uden says.
A difficult six month period followed in which Uden and his co-owners had to scramble to reassure staff and customers to stick with Flash, at the same time as going through the difficult process of cutting the business’s ties with Britain.
But before long Flash was back on track, with Uden setting the business on course to cement its position in the retail display niche by making further investments in expensive, but cutting-edge, printing equipment.
Despite Photobition’s untimely end, Uden says he learned from the confident investing-for-growth strategy the company had introduced to the Australian business during its time.
“I don’t think I would’ve had the balls to make those buying decisions prior to being part of that,” Uden says. “You come from a smaller business perspective, where every bit of equipment you buy you have to plan for, and you know already how you will pay for it, rather than having a preparedness to invest more in greater growth.”
To entrench themselves in the retail market segment, Uden led the business in developing relationships with the architects and interior designers that are the decision makers on many retail fitouts and branding changes.
More recently, Flash has accelerated its evolution away from its humble photo processing roots by moving into the manufacture and sale of digital display modules that can be installed in stores.
Although not previously a hardware company, Uden says he saw the advent of smaller, cheaper digital and audio displays as the next technological opportunity Flash needed to seize to achieve further growth. Digital display products now make up 30% of Flash’s revenue.
“It was the next logical step for the business. There was a steep learning curve there, but we got our own ideas about how the displays would work and realised we needed to manufacture to make them happen, and that also meant we could do custom work on request, which has been important,” Uden says.
In a somewhat ironic reversal of the circumstances in which Uden, Madison and Bolton took control of the business, they now see its future as lying primarily in growing its overseas sales.
Increasing sales into the US is a key short-term target, with Flash now targeting trade shows in an attempt to win a slice of the massive retail market there.
As for Uden, he’s lost none of the passion that helped propel him from the darkroom to the chief executive’s suite. “There were some sleepless nights around the buy-back, but it feels like a blip now,” Uden says. “I hate to sound like Big Kev, but I’m just still really excited by the business.”
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