Tibbett & Britten Group plc
Address:
Ross House
Windmill Hill
Enfield
Middlesex EN2 6SB
United Kingdom
Telephone: +44 181 3679955
Fax: +44 181 3667042
http://www.tibbett-britten.com
Statistics:
Public Company
Incorporated: 1958 as Tibbett & Britten
Employees: 30,000
Sales: £1.14 billion (US$1.89 billion) (1998)
Stock Exchanges: London
Ticker Symbol: TBG
Company Perspectives:
Tibbett & Britten Group's objective is to develop in partnership with its clients and consolidate itself as an internationally acknowledged leader in supply chain management by translating experience and skills across territorial and product sector boundaries.
Key Dates:
1958: Company incorporates as Tibbett & Britten.
1969: Company acquired by SPD (Unilever) and Van Gend & Loos.
1973: Wins contract with Marks and Spencer.
1978: Marks and Spencer contract is extended.
1984: John Harvey leads management buyout.
1986: Company is listed on London Stock Exchange.
1990: Tibbett & Britten begins international expansion.
1995: Company enters U.S. logistics market.
Company History:
Fast-moving Tibbett & Britten Group plc is one of the world's leading logistics companies offering warehousing, distribution, and logistical support services, including 'pre-retailing' services. Market leader in the United Kingdom, Canada, and South Africa, Tibbett & Britten has also captured strong shares in the United States, European, African, Middle Eastern, and Far Eastern markets. Tibbett & Britten's more than 30,000 employees operate in 25 countries, with a focus on the 'fast-moving consumer goods' (FMCG) segment. Building on its original specialty as a clothing transporter, Tibbett & Britten's primary business comes from the food, consumer goods, clothing and textile, and automobile and light van transportation sectors. The company offers more than 400 warehousing facilities providing some 2.8 million square meters. Tibbett & Britten's fleet of more than 8,500 vehicles operates almost entirely under its clients' colors, spanning the range of major retailers and manufacturers, including Asda, Brooks Brothers, C & A, Marks and Spencer, Black & Decker, Colgate-Palmolive, Compaq, Next, Nestlé, Nissan, Sainsbury, Sears, Wal-Mart, and Reebok. Over 90 percent of the company's business comes from long-term and short-term contracts. In addition to its client-oriented logistics services, Tibbett & Britten is also a major European multi-modal (road and rail) logistics provider. Tibbett & Britten continues to be led by chairman John Harvey, who joined the company in 1969 and has been the chief architect of its growth. Since the mid-1980s, Tibbett & Britten has posted a 25 percent compounded annual growth record; since the beginning of the 1990s, Tibbett & Britten's annual revenues have multiplied by nearly five times.
Origins in the 1950s
John Tibbett began making deliveries in the 1950s, and by the middle of the decade had begun to specialize in transporting clothing from London's East End garment district to retailers in the city's West End. Tibbett's clothing specialty led him to pioneer new methods of transporting garments. Instead of the traditional method of placing clothing in boxes for transport--which required that the clothing not only be taken out of the boxes again but also often that they be ironed for retail presentation--Tibbett outfitted his tiny fleet of trucks to carry the clothing on hangers. By eliminating the need for boxes, Tibbett also enabled his retailer clients to save on storage space--releasing more of their stores for selling space. The savings in cost and time enabled Tibbett to win a loyal clientele. By 1958, Tibbett had been joined by Frank Britten, and the partners incorporated the company as Tibbett & Britten.
Tibbett & Britten remained a small affair, operating out of a converted house in Leytonstone. While the company began to take on new employees, and expand its fleet to ten vehicles by the end of the 1960s, for much of the decade it was forced to rent out a room on the upper floor of the house, using this rent money to pay the company's utilities bills. When the company took on its first storage contract, however, its days as landlord were ended. The company began a steady expansion through the 1960s, winning a contract to provide logistics services to a chain of retail fashion shops. Tibbett & Britten opened a new depot in London's Docklands district, as the company built up its fleet of trucks.
During this time, Tibbett & Britten had met up with John Harvey, then chief of Unilever's U.K.-based distribution division, SPD, located nearby. By the end of the 1960s, Tibbett & Britten was looking to expand its operations. In order to finance its expansion, Harvey arranged for Unilever, through SPD, together with Dutch transporter Van Gend & Loos (VGL), to each buy 37.5 percent of Tibbett & Britten, while Tibbett & Britten held on to the remaining 25 percent. The SPD/VGL purchase--meant to diversify Unilever's distribution business beyond its core grocery operations&mdash-abled Tibbett & Britten not only to expand its operations, but also to become a more professionally organized business.
By the 1970s, Tibbett & Britten had moved to new headquarters, in Tottenham (its Docklands headquarters had been a garden shed next to the main depot). Strong investment from its new partners enabled the company to expand rapidly during the decades, opening a number of new depots and warehouses, and to take on larger scale contracts from a wider range of customers. Before long, Tibbett & Britten had established itself as a nationally based company, and the first to offer nationwide hanging garment distribution. The company then reformed itself into two divisions, National, and International, which initially focused on allowing the company to enter continental European markets. Both divisions remained specialized on clothing and textile distribution.
Management Buyout in the 1980s
A big boost for the company came when it won a contract to take on distribution work for Marks & Spencer in 1973. The contract, which named Tibbett & Britten as the retailers' exclusive distributor of hanging mens' garments, was extended in 1978, to cover womens' garments as well, placing Tibbett & Britten as the exclusive distributor of the famed British retailer's hanging garment stock. Between 1978 and 1981, the Marks and Spencer contract enabled Tibbett & Britten's revenues to double, and by 1982, the Marks & Spencer contract provided more than 50 percent of Tibbett & Britten's annual sales of £24 million.
Marks & Spencer soon asked Tibbett & Britten to take over all of its hanging garment distribution for its stores and its suppliers, and to build a dedicated depot and distribution network to service this contract. Tibbett & Britten agreed, and in January 1983 the company launched a third division, Transcare, dedicated to its Marks & Spencer business. Establishment of Transcare involved an extensive reorganization on Tibbett & Britten's part, including the opening of new depots, investment in new machinery and handling equipment, and the expansion of the company's fleet of tractor trailers. The investment proved a heavy one, particularly as it came during the economic downswing that marked the early years of the 1980s, and Tibbett & Britten soon found its profits under pressure. By 1983, the company faced a net loss of nearly £800,000.
Tibbett & Britten faced a different transformation in the same year as the Transcare launch. Unilever made the decision to exit its transport operations in 1983; in that year, SPD and VGL decided to end their investment in the Tibbett & Britten partnership. SPD Chairman John Harvey was given the opportunity to lead Tibbett & Britten's management in a management buyout. The buyout was accomplished in December 1984.
Harvey moved first to consolidate the company's clothing distribution operations, reducing expenses in order to bring the company back into profitability. Tibbett & Britten next turned to an analysis of its future expansion. During the company's partnership with VGL and SPD, Tibbett & Britten had not only gained a great deal of investment in technology and operating systems, but had also built up a strong management team with a diversified distribution background. The company determined to put that experience to work, opening out its operations to the wider FMCG market. While the company's Marks and Spencer contract continued to grow, including the design, construction, and operation of a regional distribution center for the retailer in Essex, Tibbett & Britten reorganized to put into place the infrastructure for its diversification into other distribution markets. By 1984, Tibbett & Britten once again showed net profits on the year.
The company established two new divisions in 1986. The first, Dartford Securities Ltd., was established in order to extend its Marks and Spencer business, with new large-scale multi-product warehouses. After opening the first regional distribution center in 1986, the company added two more in 1990 and a fourth in 1991. A second division, Retail Consolidation Services, was created to service the company's other contract clients, built around an IBM-dedicated central warehouse in Milton Keynes, and quickly adding a distribution center in Whitwood, acquired from Unilever. That acquisition also gave the company a seven-year contract to stock and distribute the toiletry and personal care product line of Elida Gibbs. This contract, renewed in 1994, provided the basis of the company's further expansion in this product category.
In order to fund these investments, Tibbett & Britten took a listing on the London stock exchange in 1986. The public offering marked the start of a long period of expansion, which saw the company grow from a base of less than 1,500 employees and sales of just over £32 million in the mid-1980s, to a leading international company of some 20,000 employees and annual sales of more than £1.1 billion at the end of the 1990s.
Expansion in the 1990s
Tibbett & Britten was aided by the changing nature of the retail business. Under pressure from a difficult economic climate and from tightening competition, as well as spiraling real estate costs, retailers also confronted a changing consumer landscape as well. Consumer purchases turned more and more toward so-called 'lifestyle' purchases, with a resulting new volatility in trends and fashions. Retailers in turn reduced back stock, introducing just-in-time delivery practices that required tighter ordering and delivery coordination. At the same time, the growing number of major and globally operating retail chains demanded internationally based distribution systems. Rather than investing in adapting their own distribution divisions to this new market reality, retailers turned to specialized third parties to handle their logistics needs. Tibbett & Britten found itself well-placed to attract this new wave of clients.
The company continued to invest in new facilities, while diversifying its operations to include distribution of new product types and new logistics services. Tibbett & Britten also began making acquisitions, adding the pre-retailing services--such as tagging and labeling, etc.--of International Garment Services Ltd. and two 100,000-square-foot Woolworth distribution centers (subsequently contracted back to Woolworth Corporation) in 1988. The following year saw the signing on of a number of new major clients, including Colgate-Palmolive, Black & Decker, and supermarketers Asda and Sainsbury. In September 1989, Tibbett & Britten acquired Lowfield Distribution, with its seven grocery-oriented distribution sites. This purchase was followed by the company's entry into the North American market, with the establishment of its Transcare Inc. Canadian subsidiary in Toronto.
Into the 1990s, the company continued to make strategic acquisitions of both distribution companies and customer-owned distribution facilities. For example, the company took over Digital Corp.'s U.K. warehousing, stock, and logistics operations. In Canada, the company renamed its subsidiary operations there as Tibbett & Britten Group Canada Inc. (TBGC), taking on the logistics assets and operations of both Robinsons Department Store and Chesebrough-Ponds. Tibbett & Britten also contracted with Talbot Stores as that company launched its own Canada operations. Back home, the company's garment contracts, other than its Marks and Spencer business, were regrouped under the brand name Fashion Logistics.
The acquisition of Silcock in 1992 brought Tibbett & Britten into the automotive transport business. Silcock had been founded in the early 1920s by two employees of the Ford Motor Company, who hit on the idea of delivering that company's Model Ts in their spare time. By the mid-1920s, the pair had set up the U.K.'s first dedicated auto distribution business, with operations in the United Kingdom, France, Spain, Belgium, and Portugal; Silcock's relation with Ford would continue through the rest of the century. In order to fund the Silcock acquisition, at a price of £31.3 million, Tibbett & Britten performed a one-for-five exchange of stock, worth just under £33 million. By then, Tibbett & Britten's annual sales had grown to £231.75 million.
Reflecting the company's steady growth, Tibbett & Britten reorganized in 1993, forming three major operating divisions, Tibbett & Britten Ltd., containing its U.K. business; Tibbett & Britten International Ltd., for all its non-automotive international business; and Silcock Express Holdings Ltd., for the company's U.K. and international car and light vehicle operations. Tibbett & Britten continued its organic growth, opening storage and distribution facilities for its clients, with new additions such as Warner Brothers' Studio Stores and VAG, the Volkswagen, Audio, Skoda and SEAT parts provider. As Tibbett & Britten stepped up its European operations, including acquiring in 1994 Toleman, an automobile distributor focused on Ford imports, it also expanded into South Africa, while deepening its operations in Canada--particularly with winning a warehousing and distribution contract from Wal-Mart, the first time the retailer had ever outsourced for its distribution needs. The Wal-Mart contract, initially only for one year, continued to be extended through the second half of the decade, including a 1998 contract to create a multi-facility network for Wal-Mart's Canada operations, as well as an extension of the contract to provide logistics support for Wal-Mart's entry into Germany.
Entry into the United States market came in 1995, with the extension of the TBGC subsidiary to include all of North America, and the launch of startup operations for Brooks Brothers in New Jersey and Philips in Memphis, Tennessee. The company also made a number of significant acquisitions, including the purchase of Dutch publisher VNU's distribution arm, Metra Media Transport, in the Netherlands and the purchase, for £12 million, of Unilever's TKL refrigerated traffic distribution wing in Austria. In that year, Tibbett & Britten once again restructured, forming the company into two major divisions: Textiles & Clothing and Consumer Products.
Although Tibbett & Britten continued to look for strategic acquisitions, the company's strong growth remained largely organic, with expansion spurred by the winning of new contracts and clients. New contracts in 1997 included the takeover of a 170-acre, 1.8 million-square-foot grocery distribution center in California, reputedly the world's largest grocery-dedicated warehousing site. A new acquisition in 1998, of Causse Walon, the leading national automotive carrier in France, added £58 million to Tibbett & Britten's annual sales, which in that year hit the £1 billion mark. In 1999, the company acquired California-based EFL Transportation, an apparel distribution provider to clothing retailers, including Gap, marking the company's entry into the U.S. apparel market. Also in 1999, Tibbett & Britten acquired Remijsen, adding grocery distribution to the company's Netherlands operations. As one of the world's only companies wholly dedicated to providing logistics and logistics support services, Tibbett & Britten looked forward to smooth roads in the 21st century.
Principal Subsidiaries: Dartford Securities Ltd.; Fashion Logistics Ltd.; Transcare Distribution Ltd.; Hi-Tech Logistics Ltd.; Axial Ltd; Tibbett & Britten Austria GmbH (95%); Axial SA (Belgium); Tibbett & Britten Group Canada Inc.; Axis Logistics Inc. (Canada); Matrix Logistics Services Ltd.; (Canada); Summit Logistics Inc. (Canada); SWO Distribution Centres Ltd. (Canada); Tibbett & Britten Clef SA (France); Axial SA (France); Causee Walon SA (France); Tibbett & Britten Group (Ireland) Ltd.; Neptune Freight Ltd (Ireland); Tibbett & Britten Kenya Ltd.; South China Warehousing (Hong Kong) Ltd (75%); Tibbett & Britten International Holdings BV (Netherlands); Metra Media Transport BV (Netherlands); Armadis Armazenagem e Distribuiç Lda (Portugal); SA Warehousing Services Pty Ltd. (South Africa); Tibbett & Britten España SL; Silcock Holdings SL (Spain); Tibbett & Britten Group North America Inc. (U.S.A.); Compass Logistics Inc. (U.S.A.); Galaxy Logistics Inc. (U.S.A.); Matrix Logistics Inc. (U.S.A.); Summit Logistics Inc. (U.S.A.).
Principal Competitors: Consolidated Delivery & Logistics, Inc.; Roadway Express, Inc.; U.S. Delivery Systems, Inc.; ICTS International N.V.; Target Logistics, Inc.; Universal Express Inc.
Further Reading:
Murray, John, 'Tibbett Strengthens Ties to Ford Delivery Network,' Independent, March 30, 1994.
Stevenson, Tom, 'Logistical Hitch at Tibbett,' Independent, March 28, 1996, p. 22.
'Tibbett & Britten,' Independent, September 16, 1999, p. 21.
Source: International Directory of Company Histories, Vol. 32. St. James Press, 2000.
