Courts' managing director, Hayden Singh. - Contributed OVER the last two years, furniture and electrical appliance giant, Courts, has had a hard time of it with falling revenues and diminishing profits. The company needed a new direction and a new strategy to turn around its fortunes. That task fell upon the shoulders of Courts' managing director, Hayden Singh.
Always the epitome of charm, grace and good humour, Hayden Singh has a lot to smile about these days. According to its unaudited results for the three months to the end of June 2002, Courts recorded a 22.5 per cent increase in turnover, registering $963.3 million in 2002, significantly up on last year's $786 million. Of particular note was its operating profit which showed a remarkable improvement from $53 million for the corresponding period last year to $239.4 million for the period under review this year. Profit after tax was $209 million coming from $157.6 million the previous year. Courts' cash and short-term deposits grew to $849 million, significantly up on last year's figure of $189.3 million for the June quarter, 2001.
So how did Hayden Singh manage to turnaround the fortunes of Courts?
"Last year, ending 2001, was a very difficult period for all companies in Jamaica following on the events of September 11 and the effects that it had on tourism and the entire economy. People were very reluctant to take positions on their credit because they weren't sure what their employment position was likely to be.
"We had to re-examine the entire operations of the company and worked through our credit accounts. Our exposure to high risk credit was a problem and we worked on that to bring it back on line. We focused on making our businesses more efficient. We closed a couple of regional warehouses, the first one was our Montego Bay premises which was closed in January this year. The second one we closed was based in Mandeville, which was closed in July. What we are now doing is building a new distribution centre of 100,000 square feet out in Twickenham Close, St. Catherine, which should be completed in late October, early November. This will allow us "just in time delivery service" going to all our 26 branches on a daily basis.
"We also did a lot of promotions on credit because we felt that's where our opportunities lay and we promoted the credit products aggressively. We also sort to make our products more affordable for our customers which is what it's all about."
THE EARLY YEARS
Hayden Singh was born in Guyana and attended the renowned Queen's College school. He went to university in Guyana where he studied marketing and management. Now holding a degree, he travelled to England where he did a BTEC diploma in business studies. At school, he showed a flair for mathematics but also spent a lot of time playing cricket. At college he played tennis but a back injury has prevented him from returning to the court. Today he spends his spare time walking and reading.
"My mother wanted me to pursue a career in medicine. I studied sciences for my A'levels with the intention of becoming a doctor but I wasn't that way inclined. After finishing school, I went to work for Texaco where I remained for some seven years before joining Geddes Grant where I became the sales and marketing manager.
"I've always had a liking for business and find myself avidly reading financial reports trying to find out how companies are performing. If you ask me what really drives me at Courts I think it would be the dynamism of the place. No two days are the same and you constantly face challenges."
CAREER
Very much a man of the Caribbean, he spent 12 years in England holding down jobs which would prove invaluable for his return home where he would face exciting career challenges. His last job in the UK was as the director of the Energy Trading Operations of the Futures Trading Company where he traded oil internationally.
"Back in the 70s, I worked for Geddes Grant in Guyana. In 1988, I was promoted to Group marketing director by Roy Collister who was then chairman of Geddes Grant and I had to move to Jamaica to work with him and together we were responsible for the Caribbean region."
HOW DID HAYDEN SINGH GET INTO COURTS?
At the end of the 80s, Geddes Grant was selling out part of its operations in Grenada and Trinidad. Hayden happened to be in Barbados when there was a problem with the handing over in Grenada. Roy Collister, who was his boss, asked him to go over there and sort it out. When he went to Grenada he met with the deputy group managing director of Courts, Howard Cohen and had very fierce but fair negotiations with him that left both men with a mutual respect for each other. Three months later, Cohen asked Hayden whether he would consider working at Courts. That was ten years ago.
"When I first joined Courts ten years ago, it sold primarily furniture rather than electrical products but during my time here the pendulum has swung the other way with electrical goods now taking prominence. The business has grown substantially over the last decade. When I came on board, Courts employed 280 people, today we have 750, which doesn't take into account contractors and so forth.
"Our market share has also increased in that time where today we are undoubtedly the market leaders. What I have noticed is that while our market share has grown, it has become very competitive and so we have had to rely on certain mantras to drive us forward. We rely on four things, they are: quality, value, service and innovation, all accompanied by a passion for retailing. We need to provide our customers with quality items. As a result we try to ensure we have the best warranties. We stress value because no one is going to pay you for something that doesn't represent value. I think our customers know we represent excellent service which is vital in the retailing business and something I stress repeatedly to my staff. In surveys we have conducted we satisfy between 97 to 98 per cent of all customers that come through Courts' doors.
"Having said that there are two per cent that remain unsatisfied. Some books on the business will tell you that is OK but the fact remains that if you are serving 200,000 customers that is 4,000 who are not happy with you. That's why we focus on customer service and spend a lot of money doing so."
INNOVATION
Hayden Singh sees innovation as one of the key driving forces in retailing. He notes that people want something different and that you should provide something that will capture the attention of potential buyers. He points to the popularity of DVDs and flat screen televisions and the way Courts has gone about marketing and promoting these products which were not so long ago considered unobtainable for most people. One of the factors that he ascribes to Courts popularity is its innovative promotional campaigns.
"We have always been the leading promoter of big prizes starting back in 1985 with 'The Millionaire' promotional campaign which proved very successful. We have also launched 'Bimmer Mania', which captured the public's imagination and we used the singer Beenie Man to spearhead that campaign. Now our 'Worl O' Cash' promotional campaign is proving to be a big hit. Every year, we have managed to come up with the promotional goods which really drives the business. Hopefully, we will come up with another great campaign next year." Courts doesn't use an advertising agency, everything is done in house. The campaigns are created by people well-versed in the Courts credo and this is a testimony to the marketing ability of this retailer. With Courts operating in 20 other countries, it is easy for it to see what works in its different territories. The marketing strategy relies on three components, packaging of the product, promotion and how to communicate the idea to the consumer.
FIXED TERM CREDIT
"What we have tried to do at Courts is make our products affordable. In the nineties when you had inflation at 40 and 50 per cent it allowed the consumer to lock a price in for instance if someone wanted to buy a refridgerator he or she would buy it now at current prices as opposed to buying it a year or two down the road. With high inflation that same refridgerator would cost you double the price. With fixed term credit we highlight the affordability of what it cost the shop.
"When you look at a payment for an item like a VCR with a weekly payment of $400 in relative terms that's like buying two Kentucky Fried Chicken meals a week which we all do from time to time. When you look at it with that rationale, you can see the affordability. This is what gives Courts its edge.
LOCAL MANUFACTURERS
It has always been Courts' policy wherever it operates around the world, to support local manufacturers. About 80 per cent of the furniture of Courts Jamaica is supplied by Jamaican craft persons accounting for approximately US$15 to US$20 million a year of Courts products. Courts is not directly involved in manufacturing but it takes a keen interest in local craftsmanship running several programmes to encourage the industry. This has culminated in Courts' Furniture Manufacturers Award Ceremony, which is held every May.
"One of the things we do is bring down retired professional furniture makers from Canada who spend three or four months in Jamaica teaching our local furniture makers the latest finishing techniques, how best to cut the wood and how to get the best efficiencies. This has made our local manufacturers much more competitive. We also give scholarships to students who attend technical schools who work with our manufacturers to get hands on experience. I think our local manufacturers are suffering because they lack the facilities and infrastructure to truly perform. There remains a lot of work to be done but we have made some progress."
CONSUMER SPEND
Last year, business turnover at Courts fell due in part to a reluctance by consumers to spend as a result of the country's poor economic performance. This saw Hayden Singh having to consolidate Courts' operations to deal with a new economic environment, which caused a 15 per cent fall in the company's turnover during the last financial year. Courts had to contend with a contraction in the overall market for furniture and appliances. Consumers became reluctant to make long term buying decisions, resulting in a decline in purchases made on credit.
At the same time, the company had to use caution in granting credit. To compound matters further, redundancies took place in several sectors putting a tighter squeeze on spending ability. Mr. Singh points to a fall off in the amount of goods sold on hire purchase terms from 50 per cent to 45 per cent and a commensurate increase in cash sales from 50 per cent to 55 per cent as one of the reasons for the fall in gross profits last year.
Something had to be done. With the resignation of marketing director with responsibility for after sales services, George Cumming, Mr. Dennis Harris who served as financial director took on the duties as marketing director as well as ascending to the position of deputy managing director. He also overseas the Information Technology Department. Conniffer Grant who was Courts' internal audit manager was promoted to the post of Financial Controller with Alvin Piper shifted from Courts' operations in Singapore to serve as director of after sales service. This new team have managed to make an impact and Courts now seems likely to have one of its best years.
"People talk about the turnaround at Courts but My job here is very simple. You don't have to be a rocket scientist to know what has to be done. The important thing is the execution of strategies and I have a great team that works with me on all the levels, executive and throughout the rank and file of the company. If you don't implement and execute strategies to improve the company's performance then you are doomed to failure. My job is the easiest one, because it is the team that executes the strategy."
ECONOMIC LANDSCAPE
"I'm very positive about the Jamaican economy and I think we will see some growth. However, I believe that crime and corruption must be firmly dealt with because it corrodes the entire economic framework. (This is perhaps even more apparent in Hayden's capacity as Vice President of the Private Sector Organisation of Jamaica). If we can do so it will make it much easier to develop a better economy and platform for businesses to prosper. There is a lot of potential in Jamaica but we have to realise that and work on that. It is not good enough to simply have potential but do nothing with it. Indicators are good, for the first quarter of our financial year we have seen customers returning and making purchases on credit. This has continued into the second quarter and shows that the economy is heading in the right direction. With interest rates coming down it makes credit even more affordable and that is very good news for the business sector and people will enjoy an even better standard of living."
