PURSUING A PERSONAL VISION, WITH A LITTLE HELP
“I went to all the banks with a business plan, and all but one turned me down,” Jonathan says.
“They said: ‘Great idea, great opportunity, but no thanks… you have no security.’ But one bank said we could go through The Prince’s Trust loan funds, who gave me a 75% guarantee on the loan.” Initially, Jonathan worked alongside one watchmaker in Liverpool, working 14-hour days and commuting back to Preston – an 80-mile round trip every day.
At 31 when he took the plunge, Jonathan describes himself as “quite a late developer”, but his commercial experience and knowledge of the watch sector was telling and the business was “fantastic from day one”.
“It’s been a cash-based retail business since we started. I am glad I did it that way, but I was naïve. I didn’t know how to run a business any more than I knew how to sell one!
“It was just me and my own determination… not just not to fail, but to be successful at building the brand how I wanted.”
Jonathan saw the path quite clearly: “My goal was to build a national chain and then sell it. It was never about a passion for watches. There was a plan to sell from day one… I just didn’t know when!”
BUILDING A STRONG FAMILY BASE
A growing business – especially one with multiple sites – needs infrastructure, and The WATCH Lab began to implement a strong central management, with a family feel.
“After the first two years my brother Jeremy – a brilliant man-manager, with multi-store experience – joined. We also took on an accounts manager, to set up the administration systems. Jeremy’s wife joined us, and her background was in HR.”
The WATCH Lab had its roots in the north, before spreading across the Midlands. In 2011 the company opened its first outlet in the south east, at Lakeside in Thurrock, Essex. Then, the business secured a second southern prime location in Brent Cross Shopping Centre and this was a tipping point.
“The business had been running for 15 years. We covered the whole country, and had built a new brand in the jewellery trade. Other companies had tried to do what we did, but hadn’t been successful,” says Jonathan.
“We thought, ‘There can’t be a better time to sell.’ We didn’t have to sell. We were exploring the opportunity, so we had a choice, which is a very good position.”
Unsurprisingly, The WATCH Lab became a target for other, larger companies, but they had declined the “derisory” offers. And then BCMS was recommended to the brothers.
NOT ALL PLAIN SAILING
The sale process itself is never totally plain sailing, as Jonathan explains: “We knew we would have to commit financially and emotionally to the process. It was very drawn-out and complex, but it was made as simple as possible.”
He also found the negotiation stage was a positive experience.
“It was enjoyable. We had lots of meetings but the support of BCMS was incredible. However good you think you are, you need to know what to expect, and not to give too much information away. It’s a building process that leads to an offer.”
Synergies with the eventual acquirer – Aurum Holdings, which owns the Goldsmiths and Mappin & Webb brands – are clear. Acquirers are often risk-averse, and Aurum understood that Jonathan was key to the business’ immediate direction, specifying a two-year earn-out.