Branching out helped Tully Nurseries to grow again
Future Proof: Business has regrouped after setbacks during the financial crisis
Tully Nurseries had its best year ever in 2007. Its commercial landscaping business was flat out servicing the needs of the building boom and managing director Padraig Tully says it was difficult not to keep growing “because there was just so much work available”.
Ironically, this exponential growth was not good for the now 40-year-old company. It created huge pressures when the crash came and left the company with bad debts of a million euro.
The lowest point was 2012, but the business has since regrouped and now employs 43 people with a turnover close to €5 million.
Martin Tully snr and his wife, Joan, set up Tully Nurseries in the mid-1970s and developed two revenue streams – landscaping and trade plant sales.
In 1997, Padraig Tully joined the family firm. Siblings Niamh and Martin jnr followed a few years later. Niamh is responsible for marketing, Martin jnr runs the landscaping operation and Martin snr is company chairman.
“In hindsight, we were way too exposed to the commercial sector,” Tully says. “Over 50 per cent of our business was directly linked to commercial landscaping and one developer accounted for around 50 per cent of the landscaping subsidiary’s turnover. Plant sales to landscapers were also heavily dependent on the commercial sector so when the downturn came, our turnover fell by over 60 per cent.
“We are very much a family business and all of our lives are tied in to it in multiple ways. So when things got really bad, it never occurred to us to walk away,” Tully says. “We were determined to get through and did so with tremendous support from our families, our employees and our bank.
“No matter how bad things got, I never refused to take a call from a creditor and we always kept the bank in the loop. People are very reasonable when you are open and explain your situation.”
Tully says that while the crash was traumatic, it was somewhat mitigated by the fact that everyone was hurting at the time. What was much worse was the second “hit” experienced by the company when its biggest customer in the UK collapsed in 2011.
“We were left with a bad debt of over a quarter of a million pounds sterling and on top of this we had another €300,000 worth of stock waiting to go to them,” he says.
“When the commercial business fell off a cliff we started looking at what we could do to get through the next five years,” Tully recalls. “Our first step, around 2009, was to approach Aldi and Lidl which were trying to increase their purchasing from local suppliers.
“We got into Lidl and began supplying them with the plant mixes they offer as spot buys. This was good business for us in that it was seamless. They gave us an order for X and we delivered it. We subsequently started supplying Aldi and Tesco and this helped cash flow and to rebuild turnover.”
The company’s second step was to open a retail shop at its premises in north Co Dublin.
“The site had always looked like a garden centre because it is finished to a very high standard, so in the winter of 2009, we officially opened to the public. Retail remains a small part of our overall business but it was another step in diversifying our customer base,” Tully says.
Landscaping now accounts for 15 per cent of turnover (although it is growing as the pace of new building accelerates) while trade plant sales to landscapers are the single biggest part of the business, representing 40 per cent of turnover.
Sales to garden centres and DIY outlets account for another 30 per cent with the rest made up of retail, supermarket and export sales.
“The first signs of a recovery for us came in the second half of 2013 by which time we had been through a lot of pain including letting people go and cutting working hours,” Tully says. “Seasonality is always a challenge but over the last few years we have become intensely focused on cash flow and on rebuilding our reserves to cope with it.
“We have also changed how we order to reduce stock and have put a lot of effort into achieving the same sales with lower stock levels.
“When Focus DIY in the UK collapsed, it was tempting to replace it with another big customer, but we resolved not to leave ourselves so exposed again and wanted something we could control and grow. In 2012/13, with the help of Bord Bia, we developed Bella Bloom as our new umbrella brand under which we now supply the independent garden centre sector in Ireland.”
Tully Nurseries grows about 60 per cent of the plants it sells with a focus on shrubs, perennials, lavenders and hedging. It is also the fourth largest grower of hebes in Europe and has begun leveraging this strength to bring Bella Bloom hebes to a much wider audience.
To make sure the plants register on buyers’ radar, the names of the new varieties are catchy, including Black Beauty and Red Rum. A UK award for its Rhubarb and Custard hebe in 2013 provided recognition and a welcome sales boost and Tully says that new product development is now central to the company’s future.