The battle to buy our shop

|

Martin Holland-Lloyd, Director of Rattle & Drum (an independent music retailer based in Derby) has had quite a year. Today, he shares his journey with us.

January 2021 and we are, yet again, about to be closed due to COVID.

It’s something we’ve now become accustomed to; I might even go as far as saying prefer. It’s quite nice sticking on some tunes, getting on with a day’s packing & despatching and not having to worry about racing to the front of the shop when the doorbell went. Our turnover was up, and we were being organised and proactive, there was very little not to like.

During 2019 we had spent a lot of time streamlining our operation, so we were able to pull almost all our activities into one system. We were equipped to sell across multiple platforms, with a consistent brand identity, and with multiple fulfilment options. We had become a true multi-channel reseller and all at a fraction of the cost of our old, separate systems.

Having said that it became apparent towards the end of 2020, just how expensive selling online actually is. We vastly underestimated the collective cost of getting the sale (Google Ads, Facebook, etc), the proportion of sales being done on Amazon and eBay and their respective fees, not to mention the increase in shipping costs product returns, and administrative effort. Turnover was up but so were costs, and without government help, 2020-21 would not have been profitable. Wait a minute, we need those doors open again!

One major cost we were about to change was our rent. We asked about buying our property from our landlords at the end of December. We weren’t confident they would go for it, but we did think it was worth a punt, after all who was buying retail property in Jan 2021? There was a chance.

It turns out that they were up for it and, all of a sudden, we had the prospect of owning our building. A win-win, not only working towards owning the asset, but also with a mortgage payment less than half our current rent. All that was left was to persuade a lender we were good for the risk, in a year where we’d been mostly shut, in the retail sector, in a bricks and mortar store…

Many months were spent jumping through hoops. In the end, a fantastic commercial broker found us a lender willing to listen. They had actual decision makers willing to have a conversation and look at business plans!

The income from our growing teaching school was going to pay the mortgage and while the income was unproven, they could see the growth and were happy to pursue that route. The only issue was their insatiable appetite for box ticking. We needed everything in date or redone to be as up to date as possible, fire risk assessments, electrical safety certificates, asbestos reports and EPC certification.

All this was taking time and a lot of cash, and by the beginning of April, our landlords were getting impatient. Even though it was our request that persuaded them to sell they now wanted matters completed ASAP. Through their solicitor, they put a very fixed ultimatum on us, if we weren’t done by the 27th May the property was going under the hammer

One last gigantic heave and by the end of the week prior to the deadline we were ready to complete, however, it seemed as though our landlords had already made up their minds and despite being ready to complete, we were rejected in favour of the lottery of an auction.

In pursuit of our dream, we had to attend the auction on the 27th to try and win the property we’d spent the last 5 months pushing for. We missed out; we were devastated. Our dreams of building a business for retirement shattered.

Through summer we drifted on, not knowing whether we really wanted to carry on. Only 2 years left on a lease, a new landlord we had never met, and no clue as to the future of the property. We continued to refine the model, constantly tweaking to try and balance cost against turnover and remain profitable.

Into November and we’d really smartened up the store, we were getting busier, and footfall was up, with customers growing in confidence and in-store turnover growing as a proportion of sales.

We had finally heard from our new landlord and he was a really nice guy. He and his business partner showed up, having a good look around and taking pictures. When quizzed as to what he was doing he announced that the building was going back on the market the following week. He’d decided that he wanted a different opportunity somewhere else.

I was shaking, whilst trying to compose myself, I asked him if he’d been aware that we should have purchased the property the week before he did. And just like that he gave me a cheery smile and said it was ours if we could complete before Christmas.

After 4 weeks of frantic telephone calls, re-kindling of offers, forms and legal paperwork I can now happily report we now own our own property. We can build on all the success and hard work of the last 2 years and truly make this business and its old, cold, and leaky building our own.

Merry Christmas and a Happy New Year to all in the MI Trade.