Martin Rolls up the Red Carpet
Lincoln Capital Partners- Media Release
9th November 2007
Martin Rolls up the Red Carpet
A major acquisition programme by an Auckland entrepreneur is changing the shape of the $600 million retail carpet market in New Zealand.
Rodney Martin is the new name dominating the carpet industry following his success in gaining majority control of the 61 store, $160 million Carpet Court retail business.
Martin has been acquiring individual Carpet Court businesses over the past three years and now has today announced he has, through his investment vehicle Lincoln Capital Partners (LCP), an effective majority interest of the Carpet Court co-operative.
As well as Carpet Court, Martin has acquired seven other carpet and flooring stores through Lincoln Capital Partners.
The combined revenue of the new group which includes the 61 Carpet Court stores and the seven other flooring retail business, exceeds $185 million and Mr Martin says his acquisition programme is far from over.
"I am still looking at further opportunities in the sector and expect to add more Carpet Court and independent stores to the network. Currently we hold about 30% of the total New Zealand carpet retail market and our goal is to continue to grow our share of the market through acquisition and growth to around 50% in the next two years.
"We are already more than three times larger than our nearest national competitor, and we have a very single-minded focus on using better buying practices by our national network and improved IT systems and processes to continue to improve our returns. Our 33rd placing at last week's Deloitte's Management Fast 50 awards already puts us in the top one percent of the best performing one percent of New Zealand companies.
Mr Martin gained a strong foothold in the Group with initial acquisitions of stores in Dunedin, Palmerston North and Napier,
Included in this initial group was the business of current Carpet Court Chairman, Chris Ogden. Mr Martin also immediately tapped into Mr Ogden's retail carpet knowledge and experience and appointed him to the position of CEO of LCP.
"Rodney has had the business acumen and experience to make this roll-up work incredibly well," says Mr Ogden." He's seen a bigger picture than we all did and he has been able to use that vision to bring a group of quite disparate Carpet Court owners along with him on what is proving to be a very successful foray into carpet retailing."
Since acquiring the initial stake in Carpet Court Mr Martin has also added other independent operators to his network of stores while continuing to acquire a total of 32 Carpet Courts stores.
Richard Hopkins, a Director of Westpac's Corporate Finance team, described Mr Martin's acquisition programme as disciplined, highly focussed and strategically sound.
"He has been very single-minded. Having identified the opportunity to consolidate New Zealand's retail carpet industry he has undertaken a successful nationwide acquisition plan. From a business point of view he has had the vision, energy and commitment to create a powerful new entity that will redefine the retail floor coverings market."
While Mr Martin is a new face in the carpet business he has significant business experience in New Zealand. Most notably he and business partner Geoff Wilding employed a similar model in the printing industry to create the Pacific Print Group (PPG). They grew revenue in that group to more than $200 million before attracting the attention of Australian Private Equity firm, which eventually acquired a 50% stake in PPG in 2005.
Mr Martin said his plans would take New Zealand's No.1 retail carpet brand and further strengthen it.
"We're re-examining the current business to move it from a co-operative to a franchise operation. That's a more sophisticated structure that will bring more profit to the franchisees and to the franchisor. That doesn't mean cost-cutting or staff cuts, but it does mean a better business model that will grow the market share and the profitability of the business," he says.
It's that approach and focus on growth that continues to draw in new outlets and is being enthusiastically welcomed by Carpet Court store owners such as Napier's 30-year retail carpeting industry icon John Danks.
"I can't believe we haven't done this ourselves and much sooner," says Mr Danks, LCP's Northern Regional Manager. "Rodney is bringing a refreshing approach that is literally turning what we have done upside down and will make our group even stronger and more successful. He's done that very smoothly and created a very, very exciting phase for Carpet Court and our industry."