Building a future after being floored by the recession

In 2000, Luke Sweeney set up the Italian Tile and Stone Company to supply quality tiles to the building and tiling trades at a reasonable price. With the building boom in full swing, the business gathered momentum. Within three years it had gone from one man and a van to five employees and was trading strongly.

In 2002, Sweeney expanded into retail sales and opened a shop in Terenure village. "It took time for the retail to get established but the commercial arm went from strength to strength," he says. "We were supplying some of the biggest developers and building projects in the country at the time, including 4,000 units for Durkan New Homes and the Shelbourne Hotel. Things were looking good."

In 2008, the picture changed dramatically. Sweeney became ill and the construction sector went into a nosedive. “I was diagnosed with lymphoma in April of 2008 and the eight months that followed were pretty horrendous between my treatment, the economy collapsing and customers going out of business. We were caught in an unstoppable downward spiral and had to let staff go,” he says.

The year that followed wasn’t much better. A major contract to supply tiles for a 230-bed eco hotel on the outskirts of Dublin was cancelled and the company lost its €20,000 deposit with its Italian supplier.

Sweeney also found himself spending a lot of time and energy trying (unsuccessfully) to recover bad debts through the courts for a two-year period. He eventually closed the retail outlet in July 2009.

“With three small children to consider, I looked at getting into another sector but ultimately decided if I couldn’t make a go of the tile business with 17 years’ experience, what chance would I have in something else when experienced operators were closing their doors daily.”

In December 2009, Sweeney’s health deteriorated significantly. He went into a coma. When he emerged from it some weeks later, his doctors told him he could not work full time. “The best solution I could come up with was to try to make our retail more exclusive and to open two days a week or by appointment, but basically this didn’t work and 2010 was our worst year ever. Our turnover was less than a tenth of our boom-time business.”

The bank halved the company’s overdraft and Sweeney had to keep everything afloat by eking out retained profits. The commercial arm of the business was still operating but its sales had been decimated by the recession and turnover was down 90 per cent. Both Sweeney and his company were at a very low ebb.

By chance he was offered a free ticket to an internet marketing event and it was to prove the turning point for Italian Tile and Stone. The seminar made a big impression on Sweeney and he resolved to bring his business into the digital age. He attended courses on IT for small business at DCU and set about redefining his product range, renovating the shop premises and embracing online marketing.

“We designed a new website and it properly showcased what had made the retail business unique in the first place,” he says. “To be honest, reaction was slow initially but at least we had a plan and a growth model.”

Sweeney then spent two intense years rebuilding his retail business and, in 2013, the company took on its first employee since the downturn. It now employs three and Sweeney says additional staff will be recruited this year to cope with increased activity in the commercial division.

“The first signs of a recovery on the commercial side came in 2012 but it’s still very patchy. Despite this, we grew 40 per cent in 2014 and so far this year sales are up 50 per cent.”

Sweeney now plans to launch an online brand aimed at the commercial market. “We believe that by applying the same basic principles of quality products and superior service to the architectural division, we can grow our company to one that serves all sectors of the tile industry as well as we currently serve the retail side of it,” he says.

“Our selection of tiles is much broader than the range carried by the average tile store and, by paying just a little more, customers can have a much better product. Good tiles fade into the background. Bad tiles jump out at you.”

Sweeney has made sweeping changes to cut costs and streamline operations. “I decided we needed to do things better and smarter. I used to have a warehouse and my own transport. Now I subcontract these functions.

“Even in the good times it wasn’t easy getting paid,” he adds. “Now we ask for cash up front for a discount. We don’t offer credit. This approach is alien to the Irish psyche but if you present it correctly, 80 per cent of people accept it and recognise that you’re not suggesting you don’t trust them.

“We also pay up front with our suppliers and take a discount. We’re now making sales in all 32 counties and further afield and I believe we now have a lean, competitive business with which to face the future.”