He’s also found that if you want your business to evolve and prosper, you have to treat every day as a school day – although it seems the hardest lesson on his journey creating a 53-staff, £4m label business might just be knowing when to shut up and listen.
Darryl Danielli How did you get into the industry?
Stuart Kellock It’s the age-old story really – my dad had a label business.
So you joined the family firm?
God no, not at that stage anyway. I wanted to be a policeman. I left school at 16, proudly clutching both my GCSEs, but had to wait until I was 21 to join the force. So I needed a trade and went to Leicester College and got a print foundation degree. I then got an apprenticeship at Hemmings & Capey and became a planner/platemaker. After my apprenticeship, though, I realised that I wasn’t great on the tools – something my fellow workers weren’t shy about telling me either.
So what happened?
I started looking at sales jobs. I went to four interviews and came second in all of them. So I asked the last one where was I going wrong and he said: “Your dad owns a printing business. Why am I going to give you a job when you’ll just naff off and take all the business with you?” Which seemed like a reasonable point. Luckily at that time, around 1990/1991, my dad’s business was growing and he needed some support.
And how did that go?
I turned up on the first day in this new sales role and he told me I needed to learn how to print sticky labels first. So I thought, fine, I’ll do a week. 12 months later, I was still printing. He put me on a machine that was three foot wide and was shorter than me and printed black on white. Some days, if you were lucky, the ink actually stuck to the paper.
Happy days, then?
You’ve got to remember that this was flexo at its rudest and crudest. We supplied labels to the hosiery industry in Leicester; the quality didn’t have to be great. Anyway, we walked in one day in around ‘90/’91 and the entire hosiery industry in Leicester had moved East. Customers were going bust one a week.
Lucky you weren’t a salesman then?
Well, funnily enough, all of a sudden dad needed a salesman. But my dreams of getting a mobile phone and nice company car were quickly shattered. I didn’t even get my own landline, I had to share my dad’s.
So much for nepotism. But were you a great salesman?
On my second day I managed to sell £5,000 worth of labels. And when you had a business that was only turning over around £17,000 a month, that’s pretty good. So I thought I was born to sales, a natural, and my charm and wit would always out.
And did it?
We delivered the £5,000 worth of labels and I didn’t get another order for six months.
So it was pure luck?
Yes, I just made the right phone call at the right time. It was an important lesson for me: you need a lot of luck in this game. But that was the start of it, and we slowly rebuilt the business over the next couple of years.
Did you target new markets?
Not really at that stage – we were still producing very basic labels. I introduced what I laughingly called a sales strategy – basically a Rolodex system to make sure we were making follow-up calls. Not exactly rocket science, I know, but after you’ve cold-called another page of the Yellow Pages with no joy, you soon learn that there must be an easier way. I realised very quickly that you need to pick your markets. So we started to really attack our markets, but unfortunately we got into a bit of trouble.
What happened?
Basically we got mixed up with a couple of guys that we thought would help us and we sold them half the business, but unfortunately they bankrupted us [in late 1993]. So we very quickly had to bounce back.
Backtracking though, why did your dad sell half the business?
The business had got too big. These two guys were selling an awful lot of self-adhesive labels and were pumping a lot of work into us. It’s a classic trick really, pump loads of work into a business and then tell them “sell us half or we’re taking all the work out”. So we got caught and sold to them. Basically they ended up ‘buying’ from Apeel Labels [the old company] at a loss and then they were then selling on to the client at a big profit.
Surely you could just stop that?
They had 52% of the business, so no. It was a big lesson in doing business and seeing the darker side of what some people are prepared to do to make money.
You must have been young, too.
I was 22/23. Young and naïve, but learning bloody fast.
Was it hard on your dad?
It was very tough. He had built up a business and then had to watch it being ripped apart. But in some respects, we were very lucky.
How?
We had a choice: walk away or fight for it. We had some good friends who lent us some money with no expectations and we managed to buy the business out of administration. Days afterwards we got a call from AT Mayes, which was the fourth-largest travel operator in the country then, and won a huge £200,000-a-year contract. Two weeks later, we got Superdrug too.
But surely these contracts didn’t just walk in or phone up – you must have been working on them before?
Well I’d been working on them for a long time, but not getting anywhere. All of a sudden, though, it all just fell at our feet. I don’t know, maybe our motivation had changed because it was survive or die. Then that Christmas we got a £30,000 order from Woolworths. We were there with crappy old machines, but my Dad and I ran them ourselves for 48 hours straight to get the order out.
Was it just you two at that point?
No, we had seven staff. We had managed to re-employ everyone that had worked at the business before it collapsed.
It sounds like you were incredibly lucky to win the right work at the right time.
Definitely fluky, but it was hard work, especially getting the Woolworths contract out. But we did – and we did it on time. You’ve got to remember that this was the 1990s and printers were notoriously crap at getting jobs delivered on time – we had a reputation on a par with builders and plumbers. I just clocked on to that, and I thought – you know what, delivering on time is a bloody niche. As a result, we built a strong relationship with Woolworths and then we also picked up Blockbuster Video.
I’m seeing a trend here: Woolworths, Blockbuster…
Yeah, yeah. Look, I got ten years out of both OK and that was how we rebuilt the business. We also worked out that you could charge 20% more for delivering on time, because a lost day for Woolworths or Blockbuster on a promotion was massive.
I guess you could start to invest in the business again by this point as the work was flowing in?
Exactly. We started to buy some decent kit around 1997/1998.
Getting back to the company’s problems in the early 90s and the fall into administration, I know this was probably before the term ‘pre-packs’ entered the lexicon of print, but after your experience, do you have a certain amount of sympathy for companies that fall into administration?
I do, but let’s be clear: this wasn’t a pre-pack. We were naïve and got stung and had to make the best of a bad lot. At the time people knew it wasn’t a pre-pack and were incredibly supportive. But you could be right – if it happened today and people didn’t know all the facts, then they might jump to the wrong conclusion.
I do know that there are occasionally those that might look like pre-pack to the outside world that just aren’t and are in mess as a result of crap that has just happened to them. Not their own doing. I do have sympathy for those, particularly smaller businesses because a bad month or a bad debt can kill them. It’s criminal. But there are ‘bad’ pre-packs, calculated pre-packs and I have absolutely no sympathy for them.
Did the experience of losing the business make you more cautious when you started to reinvest in the business?
I don’t think so. I don’t think we were more cynical either; perhaps we were more pragmatic. Strangely, the one thing it did give us was more confidence in ourselves. These two guys convinced us that they were brilliant at sales and we needed them, but they weren’t and we didn’t. We just needed more confidence in ourselves.
Was your dad still involved in the new business after you bought it back?
Yes, it was me, my mum and dad and my sister at the business for a while. Until 2006.
Is that when your mum and dad retired?
Yes – and I sacked my sister.
You didn’t! How are the family Christmases?
Fine now, but it’s fair to say things were a little bit frosty for a while. For the first six months, my mum and dad weren’t speaking to me. My sister wasn’t speaking to anybody.
That’s the dark side of running a family business then?
It’s not easy running a family business. You have to deal with a lot of egos, not least your own. That was something I reflected on afterwards: as much as I like to think it was my sister’s fault – the bottom line was that I had this huge ego that wanted to prove it could do something in the label industry and my ego got in the way. A lot. I learned that a lot of people might not always agree with you, but their reasons are no less valid and as much as you need them to buy into your dreams, you’ve got to buy into theirs. That’s the same for staff and family.
So this was around 2006. Were you still purely a flexo house?
Yes, and probably about £1.5m, 25 staff. It was at this point that a lot of our competitors had caught on to what we were doing, delivering on time, and the swines insisted on copying us. So we saw that we needed to start moving into different markets. We started to look at higher quality stuff, because at that point less than 20% of what we were doing was four-colour. But trying to step up the quality levels was a tough cultural change on a shop floor that was focused on speed.
How did you do it?
I would love to tell you that we systematically engaged with the employees to bring them with us…
You just shouted at them, didn’t you?
Yes. Another lesson learned.
It worked, though?
Well, we got here eventually, but we certainly didn’t do it the right way. What we did do right was invest in new MPS presses, but they weren’t cheap and we were only the second in the UK to have one – so it was a big risk. But it paid off.
Were you trying to change your customer base at the same time?
Trying to. That took time too. Then in 2007 I met a guy called Dave Cox from Label Studio. He was running letterpress machines on very high quality labels for the drinks industry, but a while after I met him they got caught out with some bad debt and fell into administration. We were in the fortunate position that we could buy their sales ledger and goodwill and some of the assets. Most of the staff had gone, but Dave joined us and that gave us the break we needed into the drinks industry, specifically the wine market.
We also took a decision to enter the micro-brewery market, which was largely untapped. The smaller volumes suited us and they were less demanding clients, and it was a growing sector. So we became an affiliate member of SIBA [Society of Independent Brewers] and all of sudden a lot of work started to come our way and we’ve replicated that model in a lot of other sectors. We’re now starting to get into the micro-distillery market. That’s a great sector because they want great design, all the whistles and bells, and they’re just as passionate about what they do as we are about what we do.
You mention the passion, you’re very self-deprecating about the business in the early days, but when did you become passionate about it?
It sort of crept up on me. I became competitive and feisty when we bought the business out of administration, which coincided with my daughter being born. Up until then my mum paid me enough to cover my board and enough for as much alcohol as she thought I should drink.
Bet that made for interesting salary negotiations. Does being passionate about the business make you a demanding boss?
It does. Everyone at the business is passionate about it, but I know I’m sometimes unfairly demanding.
How do you change that?
By surrounding yourself with people you trust enough to listen to them when they tell you to shut up. I’m very lucky, I’ve got a great management team and they’re all quite happy to tell me to shut up when required.
We’re still around 2007 and you were still purely flexo. When did you start looking at digital?
Around that time. We also recognised that we had no real decorative capabilities. We had a bit of cold-foil, but Dave quite rightly kept telling me that the drinks industry demanded more effects. But the tooling cost for that was massive. I just couldn’t commit to that sort of investment without the work being there and we couldn’t get that work without the investment.
Catch-22. So you opted for digital?
We made the decision to invest in a digital press, but the day before we finally decided to do it, Dave died. That was a massive loss as he had been an inspiration, and after my dad retired he was my sounding board. He was just the nicest man and so well respected in the industry. He was only in his early 50s; it was just so sad. He had a brain haemorrhage. This was in April 2010.
Why do you think so many successful companies seem to be built around a dynamic partnership?
If you’re stuck on your own you can feel that there’s nobody in the business that you can trust to use as a sounding board. When that happens you’re in danger of getting caught in a trap where you ending up just doing the same thing day in, day out, because no one challenges you. I need someone like that in the business.
Back to digital. If you started looking at it around 2007, how come it took three years to take the plunge?
The technology wasn’t quite where we were at. It’s about the crossover point and for us that was 2010. We hit that pretty much as square on the head as you can get – we were very lucky. At the same time we got a Digicon finishing line and that was when we could finally deliver what Dave Cox had been asking for: hot foiling, screen, cold-foil, embossing etc. That has been an absolute godsend.
That must have been a big step financially and out of your comfort zone too, technology-wise?
It was a huge step. We had no idea how it was going to work and what we were going to do with it. When you see your £700,000 investment swinging from a rope while you try and install it on the second floor, that’s not a good day at the office either. At one point I think I was actually standing underneath it with my arms outstretched as if to catch it, thinking: “Well if it falls, I’m probably better off dead anyway”.
Was it a big learning curve in understanding how to sell digital?
It was a massive learning curve, but by having that digital capability, and the Digicon in particular, we were unique. No one had a finishing line that big and all of a sudden the work started flooding in because everyone wanted the weird and the wonderful high-end work it could do. We were learning all the time though, and we figured out that we could do things that no one else could.
Has that always been the overarching strategy?
I think so. If the crowd is going one direction, we’ll always try to go the other way, because the last thing we want to do is go the same way and have to battle with the masses. Whether it’s the way we sell, the way we present ourselves, the labels we produce or the markets we’re in, we know we need a point of difference.
If you’re always look at the next innovation, what’s going to be the next big thing in labels?
I’m not going to tell you that… OK, go on then. Specialist papers. Substrates are where it will be at. Brands want to look unique and people are going to want to take the cost out of tooling. To do that, I’m keen to take a look at how we can get into really unique papers. You see all of these commercial printers looking to move into packaging and labels, and I don’t blame them, but that means that those of us already in packaging have got to use our knowledge to move outside of their comfort zone.
You touched on competition from the commercial printers. Digital is a great leveller insofar as giving commercial printers the ability to add packaging to their work mix. How can your protect your business?
Knowledge. It’s about knowing how to apply the technology. Take labels – it’s a printed piece of paper with some sticky stuff on one side. That sticky stuff scares the living bejesus out of most people. We love it though, and there’s nothing we like more than a job that someone else has turned down as being too difficult. Our reputation for taking on the challenges that no one else wants is something we’re very proud of. Especially when you consider were we came from in the early 90s – printing crap labels crappily.
It sounds like you’ve never stopped learning.
We invest a huge amount of time and money in learning. Back in around 2003 one in ten jobs generated a complaint, which we didn’t do anything about because we were making really good money. I got fed up with it though, so I sent myself off to university to do a three-year, part-time MSc in management of quality excellence. It was a tough time, but I learned a lot. I learned that education is key to the success of any business.
Do you spend a lot on training?
Yes, but it’s probably not enough, I think it was about £50,000 last year.
What have been the key things you’ve learned?
Keep learning – every day is a school day – and keep trying. You’ve got to learn to live with failure every now and again, but learn to learn from it. Take what you can from a situation, get better and make sure it doesn’t happen again. It’s all about sweat. Also never forget to look in the ugly mirror. Don’t believe your own hype – we can all improve.
