Focusing on keeping it in the family

By Steve Bohling June 01, 2015 Industry features & issues

After almost 30 years, Mark Jones is preparing Applico and Kitchen Things, through JFI, for the next generation. Steve Bohling reports.

To view a PDF of the complete feature as it appeared in Wares magazine, click the download button at the bottom of this page.

Photo above: Mark Jones and Rachel Louie.

From its origins in the mid-1980s, Jones Family Investments (JFI) – comprising Kitchen Things, Applico and now JFI Service – has grown more than tenfold and is on track to employ around 200 people. But, as the name indicates, it’s still very much a family affair. 

JFI may have made some significant top level hires in the last year but, 25 years on, JFI Executive Chairman Mark Jones is as busy as ever. He’s one of the original Frequent Flyers and travels constantly, locally and internationally, to stay up with the play.

Fitter than ever these days and working as hard as anyone in the place, Jones may be “back in the business” on a day to day basis but, aged 66 and with both eyes firmly fixed on the future, he is also making plans for the time when he won’t be as closely involved.

It’s fair to say this is a somewhat untypical outlook for Kiwi firms: “Typical NZ businesses don’t take the time to consider the future and then all of a sudden the future hits them and they’re in a lot of strife. Look at the small appliance retailers in New Zealand…” says Jones pointedly.

Mark Jones himself however is well into rounding out his succession plan. His successor will be daughter Rachel Louie, already 12 years with the company, who will come out of day to day work in Applico during the next 12 months to allow recent GM appointment Craig Hider to take up the reins.

In terms of Kitchen Things, Nick Elgin was the other key recent appointment as GM. “Nick brings another skill set to us – it’s about settling the business in now that we have the stores set up and getting into the detail that will take us from being a good business to a very good business.

“It’s a well-planned changeover,” emphasises the Jones family patriarch.

 

BRINGING IT ALL BACK HOME

To briefly cover off some history by way of explaining why JFI is where it is now, both Kitchen Things and Applico owe their origins to the late 1980s, the former when the Microwave Shops and Hood Centres were converted into Kitchen Things and the latter when the Smeg agency for New Zealand became available.

Faced with mounting opposition to being both retailer and supplier – both poacher and gamekeeper if you will – Kitchen Things was sold, but its development soon stalled due to underfunding and the retailer was bought back again.

Then came an agreement with Betta Electrical with a view to establishing a Kitchen Things in every main centre. But the group didn’t want to fund development either. So, from 2008, Mark Jones took control back.

At that stage, there were just two stores in Auckland with franchisees in Wellington and Christchurch. With the benefit of hindsight, one ownership, one direction is the right strategy for our business, says Jones today.

 

COMPLETING THE BRICKS & MORTAR STRATEGY

Back to today. There are currently 19 Kitchen Things stores, just one of which is still a franchise, in Hamilton. However Mark Jones is clear that at some point this store too will be company-owned: “We’re very happy indeed with the Hamilton operator. But, whenever he exits, or his franchise agreement runs out, we will take that business over too.”

It’s obvious at this point in our conversation that there is a clear and well-defined strategy for the stores and that what Mark Jones describes as “the last store” – the one destined for Westgate and opening early next year – probably really is the final piece of the bricks & mortar jigsaw.

It completes the network on the basis that JFI believes 20 stores will pretty much cover the market it wants to address – the market for premium brands and products: “We don’t try and sell an oven – we try and sell three ovens. We don’t sell a gas hob – we sell induction. 95% of all our ovens are pyrolytic,” he underlines. 

Which is why Kitchen Things’ average sale is five figures and upwards. But operating in that space requires a premium experience and that is why some stores have chefs, most run cooking experiences and there is significant ongoing investment in product knowledge across the network.

 

SERVICE FOR THE LIFE OF THE PRODUCT

With premium product also comes high expectations of performance – there is nothing worse than a disappointed customer if a product is incorrectly installed or faulty at some point. And, with the parlous state of technical support and servicing in this country, this is another key element over which JFI is seeking to exert control.

Hence the recent investment towards a national installation and servicing offer. Says Mark Jones: “Having fantastic sales people with fantastic product knowledge and very good stores is key to our business, but we also want to be able to install the product and service it for its lifetime.

“We know that a high percentage of service work relates to poor installation. So, by doing the installation ourselves, we know the product will be installed correctly and then we will service it for its lifetime.

“It’s a major issue for the whole industry. So we are now developing our own service network throughout New Zealand. What we are looking to do will be branded JF Services so we can offer a service, not just for Kitchen Things, but also for other retailers selling similar products.”

To this end, JFI has invested in Appliance Works in Christchurch and has appointed Mike Julius to lead the development of a NZ wide service network.

JFI Service’s staff will both service and install and Mark Jones is clearly chuffed to say these people will also be qualified to undertake a truly “one stop shop” service.

 

ARE YOU BEING SERVED?

The other related area of investment which is “well down the track” is a JFI Contact Centre which will start operating in the second half of this year.

“It’s a major investment first and foremost to allow our sales team just to sell because a lot of our sales can take up to a year. So we want our sales people to have all the time in the world to be able to work with designers and end users and really help them on the journey towards that beautiful kitchen.”

Calls around product knowledge and general calls will all be handled through the Contact Centre. JFI Service will also benefit from the Contact Centre being trained to ask the right questions of the customer and as far as possible correctly identify an issue with a product, thus ensuring that service personnel arrive armed with the right parts, first time.

“Our goal is to be a 95% one-call fix,” says Mark Jones. “It is exciting because I think all this takes us to another level in the industry and means that we really can provide the ultimate service for the best brands.”

Bullish yes, but there is no lack of focus here, no suggestion that JFI or its various arms are gearing up for some dream of world domination. “We can never take on the Harvey Normans or the Noel Leemings or any of those groups which do a fantastic job for the mass brands,” says Jones. 

“But, in the space that we want to be able to work – the premium space – we believe that we provide a network of stores and the commitment of people that will more than match the expectations of a high-end customer base. That’s our philosophy.”

In this respect it has been pertinent to learn since our interview that Kitchen Things will soon be named as the exclusive retail choice for the introduction of an additional premium whiteware brand into the New Zealand market. 

 

ABOUT A PERSONAL LEGACY

Thus far there hasn’t been much mention of Applico in all this but, without JFI’s importing arm, along with its commercial business and its widely underestimated and developing business with leading hardware player Mitre 10, none of this would have been possible.

“In New Zealand you couldn’t do it any other way – you have to have different arms to your business to make it really work. Kitchen Things by itself could never have done it,” says Mark Jones.

Another key enabler of this transformation is that JFI has two boards – a family board and an advisory board. The latter includes internal and external movers & shakers with “a fantastic range of skillsets” across legal, marketing, HR and finance and has been instrumental in both critiquing and shaping the way ahead.

But JFI is still firmly a family business: “The way we do our business is very much in keeping with family values – we respect everybody who works in our company and we realise that the success of our company is not the stores or the brand, but the people. We have a lot of people who put their heart and soul into our business and they are as proud of the business as I am.”

Taking a leaf out of successful family-owned European companies, JFI resides in a trust. The beneficiaries are Mark’s two daughters and then his grandchildren and the aim is that it will remain family-owned and family-run, by Rachel Louie and then her successors, over the long term. 

“Yes we have put a lot of money into the business,” says Mark Jones, “but my absolute desire is never to sell the business but to pass it on to my daughter in the very best shape that I possibly can which allows her to take it to another level. I think this is every father’s dream!”

Mark Jones says JFI is about creating a business “that will go from generation to generation”. “It might take time but you investigate thoroughly and need to be prepared to invest whatever it takes to get that result.”

It’s also been about the business choosing to plough its own furrow: “We don’t get involved in side fights. We know where we’re going and we get on with that. 

“Ours is a clearly structured business and it is clear what we need to do to continue growing that business. You cannot be all things to everybody – you just stay focused.”

And, when the motivation is personal rather than just business – a legacy if you will – that ups the stakes: “I can say with hand on heart we are committed to developing the business so that it will still be here in 50 years’ time,” says Mark Jones.

So, diarise the year 2065… Let’s hope Wares – not to mention today’s retailers and suppliers – will still be around to see if that turns out to be the case!  

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