Kwik-Fit moves up a gear
It was in August last year that Tim Parker (48) was named as the new Chief Executive Officer of Kwik-Fit, following the purchase of the company from Ford by CVC Capital Partners for a reported £330 million.
His track record is pretty impressive. He completed a masters degree at the London Business School between 1979-81 before embarking on a successful career in business. He joined Thorn EMI in 1982 and managed a number of subsidiaries, being made Chief Executive of appliances firm Kenwood in 1986. Four years after this, Kenwood floated on the London Stock Exchange.
Tim Parker’s career continued when he became CEO of Clarks, the shoe company, and he was instrumental in turning the company around. From Clarks, he joined Kwik-Fit, at the same time taking an (undisclosed) equity stake in the business.
The timing of his decision to meet members of the press was interesting – like many others, T&A had asked for an interview on numerous occasions earlier, only to be politely refused – so why now? After all, Kwik-Fit had only just announced that it would be closing 140 of its Tyre Plus centres and many CEOs would avoid the press like the plague in these circumstances. Tim Parker was adamant that the closures were necessary, saying: “When you are building a business, the first step is to regroup.” Having multiple outlets in one town does not automatically lead to more business, he suggested; in fact, quite the opposite: “Some of our businesses were cannibalising sales from each other” observed Parker.
When CVC bought Kwik-Fit, some in the tyre business voiced the opinion that the company had fallen into the hands of asset strippers, who would break it up and sell it off. Venture capitalists, it was suggested, are rarely interested in the long haul and, when Stop ‘n’ Steer was sold and FTM was closed, these were seen as the first steps in the process. What about the human cost of closures? “There have been no redundancies to date” was the answer.
Parker points out that obviously CVC wants to get the best returns that it can on its investment, but he denies the charge of asset stripping. Part of the plan to regroup was to concentrate on core business, which in Kwik-Fit’s case was identified as a fast-fit operation. “Every business has bits and pieces that it doesn’t need” Parker told T&A, and FTM, Stop ‘n’ Steer and Silver Shield windscreen replacement fell into this category. Kwik-Fit’s insurance business, however, is regarded differently and has been retained, due partly to the linkage between its customers and those who visit Kwik-Fit centres.
If the impression given so far is of a company withdrawing into itself, then that is erroneous. “You can only create value in business if you create growth” said Parker, and the regrouping is to develop a platform from which the company can grow. The internal re-organisation has taken place and it is now time to concentrate on the market.
Concentrating on the UK, what are the company’s plans? “We are going to attack the marketplace,” said Parker, adding that the very next day would see the return of Kwik-Fit to TV, as the company embarked on its first TV advertising campaign for some years. The emphasis will be on prices – “We have to ensure that Kwik-Fit is competitive” said Parker. He accepts that price is not the be-all and end-all and, if the customer is happy, that’s the overriding criterion. “However, the after-sales experience is important too – if a customer buys your products, then finds that he could have bought the same thing cheaper elsewhere, he will not be happy,” he added. Having said that, Kwik-Fit is not going along the “cheapest prices in town” route.