The demanding fisherman examining the minutest details of the price-tagged rod and reel spotted Richard Sanderson watching. “you must remember,” the angler said, “I’ll probably hold and caress this more than I do my wife.” That sums up the passion of angling which Sanderson, himself an angler, partly subscribes to.
“Fishing is very personal,” he observes. “However, I think if you held your wife 10 hours a day she’d probably tell you to go away.” Romantic notions give way in any case to one of piranhas in a rockpool on the business side of Britain’s most popular recreation.
Sanderson, 55, is managing director of Hardy & Greys, a great name globally in angling - and one of a fast declining number of English sporting brands of quality and distinction.
Dunlop has gone, Slazenger too. Holland & Holland and James Purdey & Sons have, like Hardy, retained the traditional value and essence of an English sporting goods brand. But they serve shooting.
Hardy’s is the only premium UK fishing tackle firm surviving. It’s only now emerging how intensively Hardy & Greys has had to fight to perpetuate its history going back to 1872. Really, there should have been no threat to the company William and John James Hardy set up, albeit initially as sporting and gun sellers till angling converted them.
Hardy rods and reels, with 18 royal warrants and patronages from various European royal families, equate with Bentleys and Rolls Royces in motoring - as Ernest Hemingway and Paul Newman might have confirmed in their time - and Eric Clapton, Chris Tarrant and George Bush Snr might as current ambassadors of the firm now.
Hardys remained a family firm until the early 60s when Harrison & Sheldon, the West Midlands Group heavily into automotives and other engineering businesses such as Webley & Scott and Churchill guns, acquired the Alnwick business, providing necessary investment.
In the 1980s Hardy Bros became House of Hardy and, in 2003, it became Hardy & Greys Ltd. During the 1980s and early 90s the company manufactured fly reels for almost every fly fishing company anywhere, besides meeting its own needs.
The firm worked flat out, making fly reels in two shifts and a range of rods sold under its own brand. But during the mid 90s the other companies turned to lower-cost suppliers in the Far East. For eight years the company struggled.
“We couldn’t find a source for that lost volume,” Sanderson says.
“Once you chase volume with price you’re on the slippery slope. Revenues fell, profitability fell.” In 2003 Sanderson “entered the equation”. Previous experience: Managing director of Black & Decker’s UK operations in Slough, then managing director and vice-president of Mattel UK, the world’s largest toy company.
“I was coming from big boys’ toys to little boys’ toys and back to big boys’ toys,” says the consumer products and marketing specialist with European and US experience.
“It became clear to me the company had to change to improve sales and profitability. Rather than manufacturing-led, it needed to be sales and marketing-led. We had to apply all our experience in designing, developing and manufacturing fishing tackle, but then working closely with lower-cost offshore suppliers. That was a huge change. And the business had no sales and marketing experience.
On many commercial issues we were naïve.” Two of the earlier management team remain now. The rest had to be recruited because, as Sanderson says, as the company changed the skill sets required changed.
Today’s management team of seven have previously worked with the like of Xerox, PricewaterhouseCoopers, Black & Decker, BAE Systems, Adidas, NEI and Barbour, and are results focused.
“Not all of them fish, but we have a fantastic amount of fishing heritage and experience within the company,” Sanderson points out.
The company single-mindedly pursues its six-point strategy applied since 2003:
1. New product development - “product with innovation”. The design and development specialists include individuals who have fished for England, or certainly successful clubs. “Through them we now produce up to 500 new products a year. Product is king,” says Sanderson.
2. People development. In 2002 the firm had 97 staff, 67 in manufacturing. Today it’s 104 but only 19 in manufacturing. Sanderson says: “As we’ve repositioned the business we had to help and encourage our people to change. In some manufacturing we’ve gone for multi-tasking and flexibility; in areas like finance and purchasing, a high degree of specialisation. We’ve had to identify and recruit people with new skills and bring in a lot of graduate trainees to attract younger people”. Modern apprenticeships are in place. And during the transformation 83 people have been trained to achieve 90 training qualifications in NVQ 1,2 and 3. Three have become MBAs and three qualified in the CIMA accountancy benchmark.
3. International sales growth. Hardy & Greys is a business-to-business, a wholesale-to-retail accounts operation. It now has its own company at Lohne in Germany, at Lancaster, Pennsylvania, in the USA, and exports to the rest of the world from Alnwick.
4. Growth of coarse and carp business - less than 5% in 2002 but last year it gave 42% of revenues and is the fastest growing side of the business. Of the 15 full-time specialist product and market developers, six focus on coarse and carp, bringing the strength and credentials of the brands to bear.
5. Supply chain. “In 2002 less than 10% of our revenues were product we acquired from overseas suppliers,” says Sanderson. “Today it’s over 90%. We’ve had to identify and build relationships with our global supply base, which includes China, Korea, Taiwan, India, Japan, Vietnam, Denmark, and Ukraine.” Warehousing and distribution had to be replanned. “For some, the warehouse is back end, an embarrassment even,” he says. “Our warehousing is one of the first things we show a visitor. We’re very proud of it.” The main one, at Cramlington, provides over 56,000sq ft, Lohne and Lancaster another 15,000sq ft each. “We can offer to over 90% of our customer base, next-day delivery. And to all customers within 72 hours. Last year showed 96% success on fulfilment for all customer orders processed through the business.”
6. Business systems. ”We sell over 3,500 items to more than 40 different countries. So you need solid and easy to access financial and sales information to review where you are doing well so you can capitalise on it, and where you are not meeting plan or forecast, so you can implement corrective action.” In short, says Sanderson: “We’ve transformed a tired fishing tackle company into a successful consumer products business. We’ve provided real product and marketing innovation from a fishing perspective into the product line.“ Over seven years international business has grown 500%.
In 2002 it brought just 20% of revenues. Last year it was 40%. For the first two months of this year it has been 46%. The 2012 objective: Over half the revenues from beyond the UK and Ireland. Germany, the USA, Scandinavia and Japan are the main markets, with East European markets emerging fast. “Those guys haven’t found golf yet and fishing is very accessible,” Sanderson laughs. “Also, anglers consistently vote our customer service best in the industry. So we’re also good at looking after our end consumers if they have any problem with a rod or reel, or just need some information or advice.” By adopting this new business strategy and focused approach, the company has grown by 250% since 2002, a compound annual growth of 14%, while gross margins in that period have increased by 350%, a compound annual growth of 19%.
Whereas all 97 staff previously worked in Alnwick, only 80 do now. But 24 more are at the warehouse and subsidiary companies in Newcastle, Germany and the USA. However Alnwick remains the Spiritual Home of Fly Fishing, to the company and the many millions of its customers worldwide. Its Willowburn centre, museum and shop, is a Northumbrian tourist attraction.
Also, whereas in 2002 the firm was known essentially for its Hardy fly fishing equipment - with 90% of the revenues from product made in Alnwick - today it’s known as a broader-based specialist fishing tackle firm with strong brands.
“We’re not just into fly fishing equipment now but also sea, specialist coarse, specimen carp and predator product,” Sanderson points out. He’s confident of achieving 10%-plus a year growth going forward. It’s a bold challenge.
“Our objective over five years is to double in size again,” he says. “We’re one of the world’s 10 largest privately held fishing tackle companies. If we double the business again we’ll probably be in the top three”.
Fishing businesses are often considered a cottage industry, whereas Hardy & Greys is up against some huge global players like Daiwa (Japan), Shimano (Japan), Pure Fishing (USA) and Rapala (Scandinavia).
And with Japan and the USA two of its strongest international markets, the Alnwick firm is fighting these global rivals on their own ground, showing strength in almost every European market too.
Says Sanderson: “It hasn’t been plain sailing. In 2001-2 there were effects from foot and mouth in the UK.
We’ve also had a lot of foreign exchange and supply chain issues from the Far East, and now the global recession.” yet during that period where market volume has probably shrunk by 10 to 20% in most countries, Hardy & Greys grew its revenues in 2008 by 13% and in 2009 by 11%.
“Imagine what we could have achieved if we hadn’t been through those market conditions,” Sanderson suggests, adding that now it’s all about taking market share, giving better value for money at the same price or a small premium. That means rods ranging from £50 to £1,250 and reels from £30 to £5,500.
About 2,000 of the 50,000-plus reels sold annually are still made in Alnwick, along with 1,500 of the 80,000-plus rods sold worldwide.
Few companies, Sanderson maintains, can table a reel like Hardy still makes; the Perfect is its most famous salmon reel and the St George trout reel, likened in sports car terms to a classic Morgan, is still made and performs as it did 100 years ago.
And for the angler wanting something akin to Porsche or Ferrari, there’s the Performance reels. One to be launched next year has already tackled and landed a 350lb shark in off Florida Keys as part of its testing programme. Over 10 days, 1,000 fish from 5lbs up to that 350-pounder were caught and released.
Meanwhile, a new Hardy Uniqua range has been voted Best in Test and Must Buy by Salmon & Trout magazine. “We’re not perfect but we’re producing the numbers,” Sanderson says.
“They’re perfect enough for Prince Charles.” Also, when Norway’s King Harald V was presented with a new Hardy Angel Salmon rod and reel in 2008, he was heard to remark it was the first gift he’d ever really looked forward to using. Today the company is still owned by the Harris and Sheldon Group through the Miller family with Michael Miller as chairman.
Sanderson says that when the business has been troubled or needing investment the family has given “fantastic” support, where under a public company it might have just disappeared. Faith has been repaid; Hardy & Greys now represents over two-thirds of group revenues. Incidentally, there is room for compromise on this matter of wives and fishing. Max Hastings, former editor of the Daily Telegraph and war correspondent, says in his newly-published autobiography that his father found three things desirable in life: “A Churchill gun, a Hardy rod and a beautiful wife.”