Profile Moving On Up in the competitive removal business

When Sirva New Zealand boss Graham Sutcliffe took the reins of Pickfords Worldwide Moving in the late 1980s, he had one primary objective – create fast-track to market leadership. With over 200 companies all vying for market share, he quickly realised the company would never become market leader unless it had sufficient critical mass, and an excellent service delivery profile.

Convinced that it was the repeat business that would drive year-on-year growth, Sutcliffe decided to target international household moving for the corporate market. With 20-25 percent market share, international household moving now represents around 60 percent of the firm’s total annual (moving) revenue.

The company operates as comprehensive household and commercial moving company with network of 120 vans and 36 warehouses. Sirva New Zealand employs within its home, commercial moving and records management businesses, 310 staff within 40 branches at 13 locations.

Before Sutcliffe’s tenure, limited market penetration meant little or no leverage from Sirva New Zealand’s parent company’s international reputation. As the holding company for Allied Pickfords and Allied Movers operations locally, Sirva New Zealand is wholly-owned subsidiary, of US-based Sirva – which is largely owned by C D & R.

A New York-based investment group, C D & R controls the entire Allied Pickfords and Allied global network. With operations in 36 countries, Allied is collectively the world’s largest household moving business with US$2.2 billion in annual revenue.

Thirteen years after Sutcliffe took over the local operation and dozen regional/national acquisitions later, he and his team have transformed what was 27 staff operation with $5 million in annual revenue, to large Kiwi firm. Now, with $50 million in annual revenue, the company is just nudging the country’s Top 200 Companies list.

Shoulder-tapped to join the firm, while working in the South Island within the transport industry, Sutcliffe’s previous management experience included Direct Transport and TNL Freighting Division of Newmans Group. He moved from Auckland branch manager to CEO within six months of joining Sirva New Zealand back in 1989.

He had identified service delivery as one of the major keys to growth. “What we needed was seamless link between domestic and international moving business with similar levels of service delivery. That meant establishing numerous regional centres where we previously lacked representation,” says Sutcliffe.

Having concluded the firm had sufficient critical mass by the late 1990s, Sutcliffe saw an opportunity to expand its household moving business through franchise strategy. By creating franchise operations within smaller rural towns (with 20,000 people or more) Sutcliffe plans to develop what he calls “incremental infill business”.

Under this business model, the company has already developed three franchise operations. On each occasion, the company has bought the business back. “The former owner lacked the financial resources required to inject sufficient cash to ensure that there was alignment with the company’s plans for future growth,” says Sutcliffe.

Within the next two years, he expects to add further five franchise operations to the one that already exists in Oamaru. Based on early estimates, Sutcliffe expects franchise operations to raise (moving) revenue by around seven percent within the next two years.

Beyond franchising, Sutcliffe believes the single largest upside will come from plans to follow the parent company’s initiative to reposition itself into full service relocation company. He says this move comes from the realisation that truly global accounts will drive much of the company’s future business. As result, Sirva New Zealand will have to offer totally seamless range of extended services to multinationals that expect consistent product and service levels worldwide.

That means extending origin and destination services to include: purchasing home from corporate client who’s unable to sell it before their offshore secondment; house-finding services; policy formation assistance; mortgage, financial, tax, visa assistance; – plus cultural briefings.

Sirva Asia Pacific Group numbers multinationals Nokia, 3M, Goodman Fielder, Air NZ (NZ and Australia), and BHP Billiton (Asia Pacific) among its global accounts.

By applying similar grow-by-acquisition strategy to total new business venture in the early 1990s, Sirva New Zealand managed to capture sizeable chunk of the growing records management market. In 1998 the company entered the electronic records management market when it acquired Auckland-based Imaging Systems. Increasing demand for outsourced secure records management has seen Pickfords Records and Information Managers division deliver 25-40 percent year-on-year growth over the past nine years.

Much of this division’s core business is hard data records storage and management, and digital imaging. In response to corporate demand, the company added destruction to its records management services when it acquired security destruction company in 1992.

With four record centres offering data and other electronic services, Pickfords Records Management division has quickly captured 15-20 percent of the outsourced traditional records management market.

With 100 staff and over one million security warehoused items, the division now accounts for 25 percent of Sirva New Zealand’s total annual revenue.

But rapid maturing of this market has seen former growth rates level off significantly. What’s now driving current growth, says Sutcliffe, is the migration by larger firms from static hard data storage to electronic and web-based solutions.

Around 65 percent of the record management division’s 5000 to 6000 total customer base is comprised of the banking and finance sectors. The firm currently has numerous clients using its web-based solutions, and Sutcliffe and his team plan to grow these numbers exponentially over the next few years.

Sutcliffe says it’s not inconceivable that Sirva New Zealand would contemplate non-core acquisitions. But the next possible diversification currently within his sights is in the logistics and inventory management sector.

Sirva New Zealand at glance
Established in New Zealand in 1984, Sirva New Zealand was originally the wholly owned subsidiary of UK-based NFC. Since then, the holding company’s core business has evolved from helping to relocate UK migrants to New Zealand into full service, domestic and international household moving company.

In 1993, Sirva New Zealand was acquired from the UK parent by Allied Pickfords Australia. Six years later the business was sold to New York-based investment group, C D & R – following its acquisition of NFC’s worldwide interests.

Sirva New Zealand acts as the holding company for four standalone moving divisions: Allied Pickfords (home moving), Allied Pickfords (business moving), Allied Movers (home moving) and Trans International Moving & Shipping. Sirva New Zealand also operates record management division: Pickfords Records & Information Managers.

Mark Story is regular writer in Management.
Email: [email protected]

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