Nuts and bolts of crunch-beating
David Laurie sold his web business to BT for £16m. Now he sells spare parts - and the firm is growing fast.
David Laurie, the chief executive of spare parts website eSpares, is profiting in the current climate
Entrepreneur David Laurie has good reason to smile. Last year, he sold his internet business Brightview to BT for close to £16 million and joined online retailer eSpares, which sells spare parts for household and garden appliances — a shrewd move. ESpares has reported like-for-like sales up 38 per cent on last year as it capitalises on the current economic crisis.
According to Mr Laurie, 44, people are shunning the throwaway mentality and having a go at repairing broken appliances themselves in an attempt to save money. He says: “Now is a good time for us. The economic climate is definitely a factor.
“Until recently, we have lived in such a consumer-oriented society — there has been this frenzy to get something new — that we have forgotten common-sense shopping, being a bit more prudent and just looking after things.”
Using the example of a washing machine door, he explains: “You can buy the new door part for around £32.50. All you need is a screwdriver and it takes about 20 minutes to do. It’s very basic. A new washing machine is between £250 and £500 — or you get the service engineer in for more than £100 — so that’s a saving of more than £400.” His business sells a hundred washing machine doors a month.
Grill elements, which cost around £40 each including delivery, are also popular. A new cooker costs between £500 and £800.
“In the same way that people replace washing machines because they don’t realise that they can buy a spare part for it, people replace cookers because their grill element has gone. Going through the manufacturer is such a nightmare that they would rather cut it out and go to the shop for a new one. But our shop can save people substantial amounts of money.”
The company, based in Chelsea, West London, stocks more than 500 different brands and sends out around 2,000 parcels a day across the UK. It does not keep a full range at its warehouse. “We know what sells frequently and keep supplies and rely on excellent links with manufacturers to source less often requested items.” Their biggest seller, says Mr Laurie, is a cutlery basket for a dishwasher. “We sell thousands.”
But he is by no means complacent. “We are not sitting back and thinking: ‘This is it — fantastic climate, easy money.’ Every pound is a hard pound to earn.” And he has big plans for the business. When he joined, he instigated a revamp of the site, which is being backed by many of his previous shareholders at BT. “We are looking to change the management and put a bit of rocket-fuel into the business.” He is planning a complete re-launch of the website, which should be completed by the end of January 2009.
“There are bits of the business that are still growing at such a scale. You are always trying to keep up with the pace but, at the same time, not take too many risks.”
Mr Laurie, an avid Arsenal fan, is also promoting the business’s call centre. “I had a call-centre at Brightview. While a website can look good and offer the customer the security they are looking for, it’s still not a face or a voice. Having a call-centre acts as a level of reassurance. As an insurance policy, it’s a great thing to have. However secure you present your site, people are still nervous about spending money online.”
Prior to Brightview, Mr Laurie spent 15 years from 1986 working in commercial property, including stints at Michael Laurie & Partners, Jones Lang Wootton, Fletcher King and Hatter Laurie. Commenting on the 1990s recession, he says: “We survived by being receivers for banks. It was tough.
“I remember Bond Street when there were second-hand clothes shops. Now, you walk down and it glitters.” He admits he is somewhat relieved not to be in property now. “I’ve got a lot of friends in property. They had some very good years and now it’s gone the other way a bit. But it will come back. The thing about business is that you have to believe in the cycle. It’s tough. We know it’s tough. So can we not just get on with it? I don’t need to have Robert Peston [the BBC’s business editor] doing an autopsy on an hourly basis, telling all of us how bad it is. Now is the time when you have to get on your tin hat and get out there and battle through it.”