BUILDERS merchant Covers is closing its local branch with the loss of seven jobs. It had been struggling to break even for some time, said group managing director Steve Osborne.
But the decision has raised fears in the building industry that Norman Piette is left with a virtual monopoly of the market.
‘It was a decision that wasn’t taken lightly and we’re trying hard to work with our colleagues to find them jobs elsewhere and to ease the pain as best we can,’ said Mr Osborne.
He added that everything had been done to try to save the business.
‘We’ve moved things around, changed the profile of our stock and changed how we do things, but that still didn’t work,’ he said.
‘A number of months ago we decided we couldn’t afford to have a non-profit making business and thought we’d try to find someone else interested in running it. Unfortunately, we’ve not been able to. That’s left us in the position where we can’t carry on, so we’ve had to close the operation.’
Existing orders will be honoured, but no new ones for non-stock items will be taken.
The existing stock will be sold during the rest of October as the business winds down.
Its premises on the Braye Road Industrial Estate will then be leased out.
‘From a purely commercial point of view, leasing them makes us more money than trading. I’m gutted we’ve had to do this, but putting a commercial head on, that’s the place we find ourselves in.’
Mr Osborne blamed the closure on the physical limitations of trying to run a builders’ merchant the size of Covers in Guernsey.
‘We have excellent staff, offer a very good service, but you can only put so much stock through that business. It’s big bulky stock that takes up lots of space, but you are not necessarily making huge profits. The margins are quite small and the limiting factor was the space we had compared with the throughput we had.’
Five years ago the company recognised it needed more space and got it, he said, but there was a challenge running from a dual location.
‘All markets are competitive. I would not say necessarily the Guernsey market is in a downturn, but we really have been struggling to maximise the benefit with the throughput.’
Other group businesses in Sussex and Hampshire are unaffected by the closure.
Covers came to the island in 1997 after buying a controlling stake in Timber Imports Ltd, making it the number two in the building supply industry behind Norman Piette.
It will continue to supply the island on an export basis.
‘We want to thank our customers in Guernsey. We’ve had loyal customers and the staff have worked hard.’
Article posted on 3rd October, 2007 - 12.00am
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