Member Article

GNE go for managed growth as direct mail industry stabilises

Printed envelope supplier GNE has invested £500,000 in new plant and machinery over the last 12 months and is preparing for further investment that could see the Leeds-based business grow its turnover from £18m to over £20m.

Originally part of the Adare Group, the company was acquired by its current management team following a management buyout supported by Yorkshire Fund Managers in 2005. Now wholly owned after a secondary MBO in 2011, the firm is run by managing director Warren Shermer who believes there is scope within the business to grow turnover by a further £3 million: “The market for direct and transactional mail has stabilised and although it is still fiercely competitive, there is capacity within the business to consolidate our market share and grow the company further.”

The firm’s key customers are in the financial services sector, charities and mail order. Like the rest of the industry GNE faced difficult times when the recession hit in 2008 and the UK market place shrank by 12%, compounding the effects of the widening ‘technology gap’ as client and consumers moved towards online banking.

“It used to be the case that demand in our industry broadly followed trends in GDP but the emergence of internet banking and utilities from 2000 onwards saw a decline in mail volumes, which some commentators saw as terminal.”

“Online also tends to be seen as carbon neutral but that’s not the case,” Shermer points out, arguing that the industry has turned the corner on environmental impacts. “Email marketing is now also far more intrusive – and therefore less effective – than traditional direct mail.”

Market research shows that customers want major brands to communicate with them using a combination of email and printed channels, and that direct mail has an important ‘amplifier’ effect when used in combination with email marketing or telesales.

Shermer believes that GNE can continue to compete and prosper, his confidence buoyed further by the Royal Mail’s continued investment in people and technology to take direct mail forward.

GNE currently employs a workforce of 136, operating from its 78,000 sq ft plant in Morley. With the operation already running 24hours a day, six and a half days a week, Shermer says that driving efficiencies and managing lead times is the key to staying competitive.

“Growth is going to come from investment in infrastructure so that we can run more machines more often but we have to be a service company as well as a manufacturer,” he says.

Innovation – bringing new products and solutions to the market – and the ability to deliver within very short lead times are critical success factors within the industry but technology will only take you so far along this path.

“At the end of the day, we all have pretty much the same machinery. What makes the difference is our flexibility and our people – having a ‘can do’ culture and building relationships with our customers.”

This was posted in Bdaily's Members' News section by Leeds Manufacturing .