Industrial Editor John Cranage looks at one company’s expansion despite the recession
A Birmingham car valeting company is expanding into London with the help of a government-backed loan guarantee scheme.
H2O Car Valeting Centres plans to more than double the number of shopping centre sites it runs over the next two years and create up to 150 new full-time jobs.
The expansion plan is being financed by £5 million of new bank capital underwritten by the Small Business Loan Guarantee Scheme.
H20 managing director Colin Thomas said the deal showed it was possible for small and medium-sized businesses to access funds even with the economy still in recession.
“When we drew up our expansion plans we were told ‘no’ by our bank but we listened to their advice and went away and tweaked our business plan.
“We would definitely encourage other companies in the same position not to take ‘no’ for an answer and to persevere.”
Mr Thomas started H20 in December 2003 at the Mailbox in Birmingham. Since then he has opened sites at the Bullring, Selfridges in Birmingham, Touchwood, Solihull, Merry Hill, Dudley, and Derby.
The latest is at the £1.7 billion Westfield Shopping Centre in West London.
Including the new London site, H20 employs 62 people and will achieve sales of £1.6 million this year.
Mr Thomas said he is working on plans to open a further 20 H20 sites over the next two years.
“We now have three of our seven valeting centres located in Westfield shopping centres and it has proved to be a successful formula.
“There is no denying that the recession has affected everyone, howeve, from our experience, footfall is up at all of our centres along with turnover and profit.
“People seem to be keeping their cars longer and are investing in a regular valet to keep them in top condition.
“I also think our success has been down to the fact that we are also a convenience service for a lot of people who have busy lifestyles.
“We make the process simple for them. They drop their cars off and then go shopping for a couple of hours and return to a valeted car in showroom condition at a reasonable cost.”
Mr Thomas said the Government’s loan guarantee scheme has been “absolutely crucial” to its ability to expand.
“With this level of support it has allowed us to develop the next stage of our business plan.
“Without it the business would not be able to flourish and grow due to the restrictive practices of the high street banks at present,” he added.
The 1.6 million sq ft Westfield London centre houses more than 300 stores, including luxury retailers such as De Beers, Tiffany & Co, Louis Vuitton and Prada.
It attracted 23 million shoppers in its first year.
Before setting up H20, Mr Thomas worked for his family’s Autokleen business which prepared cars from prestigious marques such as Rolls-Royce, Bentley, Aston Martin, Ferrari and BMW at launches and motor shows throughout the world.
“I was born with a chamois in my hand,” he said.