In the ever-evolving realm of business supplies and facilities management, one name stands out for its remarkable journey of resilience and growth – Croydon-based Quills Group. Guided by dynamic entrepreneur, founder and CEO Andy Efstathiou, this dealer has transformed itself from a humble start-up in a front room to a formidable force in the industry. With a colourful history and an ambitious vision for the future, Quills Group is a testament to the spirit of adaptability and perseverance.
With infectious enthusiasm, Efstathiou fondly recalls the initial stages, over a quarter of a century ago, when he took the bold step into entrepreneurship, encountering inevitable ebbs and flows. Office products might not have been an obvious choice for someone in his early 20s, but prior experience at Despec Supplies paved the way for his foray into the sector.
Starting with just a list of consumables scribbled on an A4 sheet, Efstathiou soon realised the venture had to transcend beyond selling a mere handful of ink cartridges, prompting the expansion of product offerings. Within a few years, sales had reached a commendable £2-£2.5 million.
As the company flourished, so did Efstathiou’s entrepreneurial spirit, leading him to establish five additional entities, ranging from digital photo frames to importing cables for Sky TV. However, a turning point arrived when one of Quills’ major clients fell victim to bankruptcy, taking around 30% of turnover with it. In response, Efstathiou made the tough decision to shut his other ventures and focus exclusively on nurturing Quills Group – an act which would become decisive for the company’s future.
“At that time, I was dealing with the US and China, had young children and was getting about an hour’s sleep! We had to prioritise, and the bread and butter, which was Quills, won,” reflects Efstathiou.
On the hunt
On the prowl for progress, the journey has been riddled with hurdles. Building a seasoned team and devising the right business model proved costly, time-consuming and draining. This prompted Efstathiou to embark on an acquisition spree, seeking out companies to complement Quills’ core competencies in terms of employee skills and product inventory.
Simultaneously, the dealer had shifted into specialist vertical markets such as archiving, shredding, copiers and waste removal. Efstathiou explains: “In the quest for potential acquisitions, I targeted dealers that were heavily skewed towards traditional office products so their customers could avail themselves of Quills’ full product range.”
Over a span of five years, six businesses were added to the burgeoning portfolio, the crown jewel being the purchase of the B2B arm of UOE in October 2021. When lockdowns struck, Quills faced the daunting task of dealing with the aftermath of the purchases, with roughly 50% of overheads during the two years of the pandemic tied to these acquisitions. Efstathiou candidly notes the balance sheet was “annihilated” at this time.
Another root cause of the financial turbulence lay in Quills’ extensive corporate client base, particularly blue-chip technology companies, which were among the first to transition their staff to remote working.
This seismic shift resulted in a dramatic decline in spend, from hundreds of thousands down to tens of thousands, in one fell swoop. “It’s still tricky,” admits Efstathiou, as office occupancy remains well below pre-COVID numbers concerning bums on seats. “We all rely on non-core OP for revenue but those sales have been impacted by the prevalence of hybrid working. For instance, if a customer has a 40% reduction in occupancy, the impact on our gross profit is nearer to 50-60%. Thankfully, our diversification into various verticals has provided some cushion.”
Sailing through the storm
Adaptability defines Quills’ response to the coronavirus crisis. The dealer established a division named Safer Shared Spaces, specialising in workplace cleaning, washroom solutions and legionella testing, among other hygiene measures. Expanding further into facilities management, the team began offering preventative compliance maintenance contracts and reactive maintenance solutions to on-boarded customers.
Efstathiou underscores the importance of securing these agreements, as they serve as a gateway to reactive work. “We manage the sales element and operate a maintenance software platform through which we populate our client’s database with pre-approved suppliers and rates. It’s a highly data-driven system,” he says.
With the ultimate goal of creating a distinct FM entity, Quills acquired one of its contractors, Formation Group, last year, giving rise to Quills FM. The amalgamation is a complementary union, with Formation bringing expertise in large project work to the mix. “I now have a great managing director to lead the division, and the first year has been nothing short of amazing, with sales hovering around £2-£3 million. We are also bolstering the team and I’m currently in discussions to acquire another business in this space,” shares Efstathiou.
Presently, Quills Group comprises four entities: Quills Office, Quills FM, Safer Shared Spaces and Quills Limpio – a joint venture for print and copier services. With a headcount approaching 40, the company shows no signs of slowing down. Besides the aforementioned potential purchase and several others in the pipeline to fuel FM growth, Efstathiou is also primed to embark on an acquisition trail in the realm of traditional OP. “For me, business is like riding a bike; I have to keep pedalling, otherwise I’ll fall off.”
Ever the visionary, he is exploring the possibility of harnessing artificial intelligence (AI) to enhance operations within the Quills Group. By crafting an AI strategy, the aspiration is to identify areas where the technology can bolster efficiency, confer a competitive edge and tackle challenges head-on.
The art of customer care
While AI promises to fortify Quills’ future standing and serve as a core differentiator for the dealer, Efstathiou contends the company already distinguishes itself through a strategic segmentation of clients into different tiers – platinum, gold, silver and bronze.
Platinum customers are not only assigned a sales rep but also a concierge service for an extra dollop of care and attention. “If they suddenly need 20 pizzas ordered, we can make it happen. As a result, we’ve become instrumental in sourcing specials, which now constitute around 10-15% of Quills Office turnover.”
Regarding product categories, Quills’ primary focus centres on FM and core office supplies, along with transactional furniture and a comprehensive fit-out service. The dealer also excels in specialist areas including managed print services, archiving, waste management, shredding and promotional items. Furthermore, workwear and safety, and catering represent potential avenues of growth.
Venturing into more niche domains, one lucrative source of revenue comes from its warehouse storage and fulfilment facility. Already sporting prominent brand names, Efstathiou highlights the manifold benefits of the scheme: “Apart from the inherent invoicing opportunities, the ability to add any required workplace supplies to the client’s own shipment from one central location delivers substantial environmental advantages.”
On the subject of sustainability, among many of Quills’ ESG initiatives, it began its operational carbon offsetting programme with the World Land Trust (WLT) in 2008. Building on this commitment, the company introduced the Eco Rewards Scheme in 2021, with points earned able to be redeemed towards the WLT Plant a Tree programme when purchasing eco-friendly products. As of May 2023, Quills offers over 8,000 environmental and accredited items.
Across the group, the team collaborates closely with clients to understand how they wish to engage with environmental policies, staff and visitor wellbeing and CSR endeavours. The driving force behind all this is Sales Group Director Tom Davinson, who also sits on the BOSS Federation Environmental Forum. He told Workplace360 that the work and commitment to ESG will “never stop”, adding: “We are fortunate and proud to be able to help make a difference that is not just about the bottom line.”
The way forward
While Efstathiou firmly believes in the future of the workplace supplies sector, he thinks it harbours an excess of players. He says: “Unfortunately, too many dealers are entangled in price wars, demolishing the marketplace in the process. It has adversely affected cost-to-serve and service levels.
“Support is required from the wholesalers in terms of them refraining from opening small accounts, allowing everyone to regain some margin back in the industry.
“By offering more competitive pricing, all stakeholders can benefit from a more balanced and constructive business relationship. Moreover, fostering increased consolidation within the industry is essential, and we are enthusiastic about playing an active role in facilitating this positive change.”
With fingers in a lot of pies, Quills Group stands out as forward-thinking with a penchant for seizing opportunities and bridging market gaps.