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Our Business Model & Strategy

Our Culture

Howdens was founded on the principle that its business should be worthwhile for all concerned – customers, prospective customers, homeowners, tenants, local communities, our suppliers, our investors, our staff and their families.
Worthwhile for our trade customers
  • Profitability, convenience, service, support
  • Great product range
  • Great service
  • Trusted personal relationships – we do what we say
  • Trade accounts and confidential discounts
  • Design, planning and marketing support
Worthwhile for our staff
  • A good living wage, plus local profit-sharing and incentives
  • Great rewards and recognition for excellent performance
  • An entrepreneurial culture, with central support
  • A growing company with opportunities to progress
Worthwhile for our suppliers
  • Strong and enduring relationships based on trust
  • Working together to develop new products and deliver the best service
  • Scale – good opportunities for them to build a profitable business
Worthwhile for our other stakeholders
  • Delivering consistent long-term value for shareholders
  • Consistent dividend growth
  • Any surplus cash returned in share buybacks
  • Important local employer and good neighbour in over 750 communities
  • Giving back to local and national charities
  • Responsible purchasing and environmental policies

Our business model

Our business model
Trade only. Completely focused on our trade customers. When they succeed, we succeed
  • The best way to source and install a modern kitchen is to work with a skilled local tradesperson
  • We provide quality products and excellent levels of service and support to help our customers succeed
  • Our trade accounts give builders up to eight weeks before they need to pay us which means that builders can get paid by their customer before our debt is due
  • Our 1,600 specialist kitchen designers, product website and catalogues all support the builder and help their profitability.
From stock, in local depots. Nationwide coverage with best local pricing
  • Time is money for a small builder.
  • They have to react quickly, customers delay the start of jobs, or change their mind part way through which means builders need immediate access to the products they need when they need them.
  • Our in-stock proposition and our nationwide network of local depots mean that builders can save time and make more money by choosing Howdens.
  • Our customers are never far away from their local Howdens - 85% of our UK customers are less than 5 miles from a depot.
Low cost and scalable. Flexible and proven. Generating cash for investment and returns
  • The Howdens model is low-cost, efficient, flexible and scalable.
  • We consistently generate high levels of cash which allows us to invest for growth and to return surplus cash to shareholders.
Entrepreneurial, low cost depots who understand their customers
  • A new Howdens depot opens with a manager and a small number of staff
  • Our depots are typically 10,000 square feet or less, in an edge-of-town location which is cheaper to rent and more convenient for our trade customers.
  • We don’t have the high costs associated with selling kitchens to retail customers.
  • The Depot manager’s autonomy is a key element of the Howdens’ business model. They hire their own staff, do their own local marketing, set local pricing and level of discounts and manage their own stock levels to suit their own local customers.
  • Depot managers are responsible for growing their account base and their sales and depot margin.
  • Profit-sharing is calculated locally, everyone is strongly incentivised to understand their customers’ needs and grow a profitable local business.
  • We attract and develop exceptional, entrepreneurial depot managers and staff who set us apart from the competition.
  • The retail kitchen market typically sells to a customer once every 15 years or so, our business is built on repeat purchases and long-lasting relationships. Our depots know that they have to deliver exceptional service every time, and our customers trust us to do this.
Supported by our own UK manufacturing sourcing and distribution operations
  • We design and manufacture all our own cabinets in our own factories in Yorkshire and Cheshire – over 4 million cabinets per year. Making our own cabinets gives us a significant cost advantage.
  • We also make some of our cabinet frontals and worktops, as well as painted skirting boards.
  • Other products are made to our specifications and bought in from suppliers with whom we have built long-standing relationships.
  • We make what it makes sense to make, and we buy what it makes sense to buy.
  • We continue to invest in our manufacturing, giving us the capacity to grow and the flexibility make product rather than to buy it in when appropriate.
  • Both of our factories serve only one customer – Howdens. Their working practices and scheduling exactly match the requirements of our depots.
  • The result is an efficient system with no unnecessary waste.
  • Our in-house distribution operation provides excellent service to over 750 different depots.
  • No two deliveries are alike, and each one must be correct, complete and on time. We’ve continued to invest in our warehousing and transport fleet to keep up with our growth and maintain our high depot service levels

Our market

UK Market

In the UK there are approximately 29 million homes; 18 million owned and 11 million rented. For many years now we have seen the market move from DIY to “done-for-you”. If people want a modern kitchen, they increasingly look to a small builder to fit it.

The consumer environment has been mixed over the last few years. Increases to stamp duty in 2016 affected purchases of 2nd homes, and the potential impact of Brexit led to subdued consumer confidence over the last two years. However

We continue to see a good level of investment in new house builds and with a more settled political environment, we would expect the market to become more stable.

Howdens place in the UK market

We are the UK’s biggest seller of kitchens in the UK.

We sell to small builders who work across many sectors of the market. Our kitchens are fitted in a wide range of end-uses, including private rentals and social housing, as well as all kinds of owner-occupied homes.

Our contracts division which was started in 2017 is continuing to grow rapidly, creating opportunities for us to expand our presence in the new-build contract market, a growing area of the UK housing landscape.

We also supply a wide range of doors, joinery, appliances and everyday hardware products used by joiners meaning that our customers have a one-stop-shop for everything they need to complete the kitchen job.

Our strategy

Our Strategy
Expand our depot network

Increasing our total addressable market and bringing us even closer to our existing customers.

We believe that there is some way to go before we have saturated the UK market and we see continue to see significant opportunities to grow our business

Develop our people

Howdens’ success is based on customer service: we do what we say and say what we mean.

Our business benefits from the investment we make in developing our people. When we invest in the right people, we can grow our own leaders. Leaders who already understand the Howdens business model and culture.
Invest for growth
In order to deliver the potential, we see in our market and ensure stock availability in depots as we expand, we have invested around £220 million in the past four years in our manufacturing and distribution. New product ensures that we stay relevant and can offer the latest styles and colours, which is what our customers and end-users want. We are always working on new product.
Use digital to reinforce our model

We are investing in our digital capability as a means of further strengthening the human relationship between the builder, the builder’s customer and the depot. Increasing builder and consumer awareness of the Howdens brand and make it easier for our customers to sell Howdens products.

Prudent financial management
We maintain sufficient cash balances to allow us to meet the requirements of the working capital cycle, taking into account the marked seasonality of the business and returning surplus cash to  shareholders as appropriate, which has been via share repurchases and dividend payments. We discuss our uses of cash in more detail in our financial review.

HOWDENS Making space more valuable

culture & people

Business model and Strategy

Find out more about our business model and strategy, the markets in which we operate and our strategic approach to protect our unique business model and ensure that the business continues to grow.
our depots

Our depots

As a familiar sight across towns and cities in the UK and Europe, our depots are always within easy reach, so a trade professional never has far to travel to find their nearest Howdens. Get to know more about how each one operates.
our history

Sustainability

Our sustainable behaviour is at the heart of our business and enables us to reduce some of our risks. We take great pride in ensuring that our business positively impacts the world around us and the people within it.
in-the-community

In the community

We are passionate about supporting the local communities we operate in, which is why our depots and support staff actively seek ways to give something back. Whether it is running half marathons or sponsoring local Scout groups, discover the many ways we help good causes.
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Our products

With more than 80 kitchen styles, an exclusive appliance brand, Lamona, and thousands of products across joinery and hardware, learn why our builders have come to trust the range and quality of the products we offer.
business strategy

People & Careers

The Sunday Times named Howdens as one of the top 25 big companies to work for. Discover why Howdens is a great place to work, how we develop our people and reward them, whilst building a culture with an entrepreneurial spirit.
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Financial Results

Download copies of the latest financial results for Howdens both past and present including the associated presentations and Interim Management Statements released between results announcements.
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Governance

Howdens is a responsible business which was founded on the tenet that the Company should be worthwhile for all concerned, with a commitment to the people within its reach and the wider world. Here we provide the links to the framework that informs our decisions and outcomes.