Sitting pretty at top of industry

Ray McKimm

Twenty-two-year-old Ray McKimm needed a new lounge suite in 1976, so drove to a Paraparaumu furniture store with a trailer hoping for a good deal because the owner knew his father.

The Taupo boat dealer wandered around the shop's selection of eight suites.

"I'll have that one."

"No."

"What you mean?"

"You don't understand the industry. There is a two-and-a-half-year delivery."

He also had to pay a 50 per cent deposit up front.

It was time to switch industries.

"Here is a tin pot business, with a bloody idiot running it, who is two-and-a-half years sold out and he has 50 per cent of everybody's money.

"So I went back to Taupo, sold the boat business, and there ensued the furniture business."

The Big Save Furniture story starts in 1952 when Ray McKimm emigrated with his parents and sister from England.

"My father was a very entrepreneurial person. We arrived in Paraparaumu and he started to build the bodies of the Morris Minor wagons.

"In 1955, he built a boat for us to go on holiday. We never went on holiday, he sold it."

He built and sold thousands more boats. Plylite Marine became the country's biggest boat business. By 1970, it employed 300 people and made two boats a day.

Son Ray did not excel at school. He was repeatedly expelled, the last from Scots College.

"The headmaster had seriously pissed me off. He accused me of something I didn't actually do, but I normally would have. On this particular occasion I had not.

"How could I get him back without harming him?"

He advertised the principal's Humber Super Snipe in The Dominion, for a third of its value.

"The thing that got him was the viewing between 9am and 11am on a Saturday morning."

About 300 people turned up.

"On the following Monday, I was expelled. On the following Friday, I was in San Francisco. I had already decided I was going to go to the States and sell motorcars. So I found a job in San Diego selling Datsuns."

Two years later, his father suffered a major heart attack and Mr McKimm found himself running Plylite.

He was offered a marine dealership in Taupo where he continued to push boundaries by illegally opening on Sundays.

"The maximum fine was $10 but it pissed me off, because I had to go to the Rotorua court and that required taking three hours off on a Wednesday or Thursday.

"So I finally decided to pluck the courage up to ask the judge - after I had been there about 10 times - whether it was possible to run a tab because this was really getting me down.

"After we had been through the fact that I had no respect for the law, whatsoever, and it was a level playing field we all needed to operate on, he said that would be fine on two conditions. One was I paid the accounts on time and, secondly, that if I hadn't turned up they assumed I was guilty."

Mr McKimm's first furniture store was in Paraparaumu, the only place in New Zealand that allowed Saturday shopping.

"Alison and I were married on the Friday and we opened the store on the following Saturday - no honeymoon."

He expanded the building and it became the biggest furniture store in New Zealand.

Big Save's first year was "absolutely a pleasure".

Mr McKimm said his competition - 149 furniture retailers from nearby centres - spent most of 1973 in his store.

"When you have the competition in your store, and not in their own, they are not selling anything. So stay as long as you like."

The second year was an "absolute disaster" after competitors realised the business was a threat. "We were bigger, we had more stock than anyone else and we were cheaper. In those days, we operated on 30 per cent mark-up whereas most furniture retailers in New Zealand were 100 per cent.

"We had trucks burned, we had railway cars sabotaged, we had paint thrown over the building."

An industry cartel was determined its pricing structure would remain, nearly sending Big Save bankrupt.

"The furniture industry was basically run by five families - they'd all intermarried.

"They absolutely screwed us. They got together with the factories and cut supply off."

Mr McKimm's solution was buying trips to Auckland with $10,000 in his back pocket.

"I was aware the furniture industry was on 120 days' credit. So when I hit a factory with cash, I got stock. It was the only way we survived."

Big Save opened its own furniture factory, which was one of the biggest in New Zealand until it closed in 2002.

In 1980, Big Save's Wakefield St Wellington branch was destroyed by fire. "That was without a doubt the worst day of my life. We had $600,000 worth of furniture burned and it took us two years to recover."

Stores were opened in Palmerston North and across the country, including St Aubyn St in Hastings.

Big Save operated pop-up furniture shows in centres it did not have branches in, such as Wanganui in 1994.

The first day nothing sold and a competitor put a sign on a trailer outside saying, Big Save - big have.

"On the Saturday morning, the Wanganui Chronicle had on the front page, 'Furniture war explodes in Wanganui'.

"We have never had such a busy day. They all poured out of the woodwork."

As Big Save grew, its competitors declined. By 1990, its 149 competitors numbered 109.

In 1991, it was the country's number five furniture retailer. By 1993, it was number one "and we have stayed there ever since".

The 1990s were not smooth sailing. Banks showed no tolerance to the industry and big brands disappeared.

"We owed the bank a heck of a lot more than we had in assets, and I knew then straightaway that we either changed - got more management techniques and started to run a professional business - or we would, like all the others, go bankrupt."

Mr McKimm started importing furniture. "Our turnover went from $8 million to $30 million. Our staff went from 50 to 140."

In the 10 years to 2010, it went from 14 stores to 21. Turnover went from $30 million to $100 million as daughter Lily started fronting TV advertisements. Over the same period, 60 furniture stores in Wellington closed.

In 2007, Mr McKimm bought the former British American Tobacco site in Ahuriri. Renamed the Ahuriri Business Park, Big Save uses some of its 5.6ha as its national distribution centre.

He said more companies should relocate to Napier. It was a natural logistics centre with good rates available on the many empty shipping containers brought to Napier Port for export goods.

Two years ago, the bulk of Big Save's back-office customer service moved to Napier, where 41 staff organise all deliveries nationwide.

"The call centre is not only giving our customers better service, it is allowing us to see what is going on in our business.

"When you have a manager based in Invercargill and he is telling you everything is super and there are no problems, she or he is probably not giving you the full picture. They can't hide now."

Innovation - it was the first furniture retailer to advertise on TV - was forced on the company.

"There were a number of entrenched furniture retailers and unless you were different you would get buried."

The innovation continues with a unique concept for a furniture store. Its latest store, in Napier's Pandora, shares its floor space with a cafe, Honda motorcycles and BMWs for sale.

"It has been phenomenally successful. The idea is, when you come in as a couple, guys generally go towards the boats and cars while women look at the furniture. There is no stress involved - she's not worried about him just standing around."

Big Save strove for an environment "where the customer is inspired" and not just coming into a furniture store. "Unless we do this we will go nowhere."

Mr McKimm said business had two parts - science and art.

Most New Zealand businesses had the science of business - IT, business programs and budgeting - but not the "art".

"Art is the fluffy stuff, the reason to shop in your store, the reason to do business, the reason to go forward and spend money with you."

Despite Big Save's science and art, without wife Alison "the wheels would have truly fallen off the business.

"I'll sell you anything at any stage, but she'll make sure the money is in the bank and we can afford to buy the next lot."