It’s all change at Shropshire-based Furrows as it moves to an Employee Ownership Trust (EOT) model.
Earlier this year Furrows announced a major overhaul of the business by switching to become an Employee Ownership Trust (EOT). It’s a big move for the group, which is ranked 127 in the Motor Trader Top 200 with annual turnover of £118.3m. Furrows has 300 employees across its main sites in Shrewsbury, Oswestry and Telford. The new Furrows EOT will own 75% of the business while the Coward family retains the other 25%. Motor Trader caught up with Furrows chairman Nic Coward and managing director Dave Farthing, both of whom will continue to work with Furrow’s current board of directors.
Advisers on the EOT transition project included Grant Thornton, Whittingham Riddell and DWF. Furrows explored options with Grant Thornton’s automotive team and their colleagues, ultimately deciding on an EOT.
Coward says: “When looking at it and thinking about the future, like many family businesses should, you think about succession and the future of the business and the ranges of options – which we started to do two years ago. About 18 months ago we started speaking to the Grant Thornton automotive team and as we looked through options they quickly got us speaking with their colleagues who were involved in EOTs.
“The real spur for that was that for as long as I had ever been conscious of conversations about Furrows, we have talked about the Furrows family. What we have always meant by that is everyone in the business. It was my dad’s obsession to think about the business as a wider family. We know what we are and we are proud of what we are. We are a Shropshire-based motor trade business. We have a customer base to whom we are loyal and we think that is repaid by their loyalty to us. Our customers and the wider community trust us.”
The Furrows family
The EOT was an attractive prospect for Furrows. Both Coward and Farthing believe that an EOT aligns with how the group thinks of itself and the business.
Coward says: “The way we have gone about it is 75% because we can still and want to be there with everyone else. It’s not like we are departing the scene. One of the features of an EOT which might be frustrating to others, but was attractive to us, is that there is by definition a long period over which the whole of the transaction completes. The family continues to be the owner of the sites, we are still here and deeply connected to concerns to make sure that the business thrives and grows but also having said to everyone involved that actually this is going to be your business in a number of years.”
As a family-run business, Furrows emphasises the importance of succession. However, leadership reassures the rest of the business that there is a long-term plan and while the changes are significant they will not be felt as the transition will be smooth as can be.
“Looking decades into the future, people will have never noticed that actually what happened was quite a big change but everything has remained the same and people are still operating within this business that they have always known and loved, and we like to think they know loves them back. And they own it,” adds Coward.
Furrows are committed to ensuring the process is smooth and seamless.
Strong staff and customer loyalty
Grant Thornton and Furrows’ trustee for the EOT, Trident, reassured Furrows that the transition will increase loyalty and be useful in recruitment.
Farthing said: “We employ 300 people across the country and as Nick says we have got loyalty, 10 years in and you feel like a newbie. We have got around 30 plus people over 20 years in service, 15 to 20 people over 30 years in service. We have retired a number of people who have done 50 years.
“Communication has gone down really well with the team they are all very excited about it (the EOT) and it is safe to say they all feel really invested in their new future. We’ve been very good at keeping good staff loyal, we look after them well and they work hard. They have been loyal all these years and possibly the younger members of the team can see a long-term investment.
“Growing up in Shropshire, I’m from Wellington in Telford, Furrows was always a respected name in the county. It had a great reputation and we protect that reputation fiercely, over the decades, well before I started with the company and I’m in my 33rd year.”
Coward and Farthing recall seeing the parents of five sisters, all of whom work in the business, taking delivery from one of their daughters.
“That typifies how we look after our team. If all five work here and are slightly different ages, the first ones must have told the others that it’s a pretty decent place to work. We’ve got people who have brought 20 vehicles off us and not always the same brand. ‘If Furrows have got it and they are telling us it’s good then we feel it’s a quality product’,” says Farthing.
Of the eight people in the Furrows’ senior management team, seven started as an apprentice at the business. Russ Smith, who retired from the business and his managing director position in 2019, started as a technician 15 years before he became MD.
Farthing says: “I think that sums up the business. Customers deal with us for decades and they like to come back and see the same person but that person might be the manager now rather than the salesperson, but that person is still with us.”
“People tend to stay here (in Shropshire) for the entirety of their life, it’s not as mobile as if I was in an urban metropolitan environment. That’s not our world. We like to think that our customers who may well be settled in Shropshire for a very very long time will know that we’re here for a very very long time as well. And that’s going to be a long-term relationship,” adds Coward.
Manufacturer response
Furrows is not alone in opting to take the EOT route. In February, Cars 2 was sold to an EOT. The business employed over 250 staff members. Glyn Hopkin, employing 800, was sold to an EOT in July 2024. It represents Kia, Renault, Dacia, Alpine, and Suzuki. Also sold to an EOT in July was Anderson Clark Motor Repairs. Helensburgh Toyota was sold to an EOT at the start of last year.
Farthing says: “We spoke to all our brands before we down the route of the EOT. Explaining that we wanted to maintain the family feel and all of the brands were very comfortable with the route that we went down.”
“Brands are going through the learning process as well, a few others have gone through the process so some were aware but others weren’t,” adds Coward.
Used and New
Central to the success of the business is the emphasis on used car performance.
Farthing says: “For years the profit potential in the trade is talked about in used cars with volume and margins we can obtain now. Over the last few years, with the difficulty in getting stock those margins have been very healthy. In our business, the one thing we feel is very important – the new we are successful at and the new ultimately feeds the used.
“On new commercial and new car, our used car departments wouldn’t be half as successful without the part exchanges that are generated by the new departments and the great brands we represent. We do very well with all of our brands and we are profitable in new car and used, it all looks very healthy.
“Used volumes are slightly more, not quite two thirds but 55% to 65% in comparison to new. We are a retail local company so those new sales are mainly retail. We do a smattering of small fleet but we don’t get involved with huge rental and fleet companies that some businesses do. What we call fleet is our local small business with car and commercial. Our numbers are built on local businesses and retail customers that are going to come back to us and service their vehicles.”
Electric leap of faith
Furrows has represented Ford for over 100 years at three sites across the county. It represents Kia at two branches and Škoda at one showroom. The Group has a Ford transit centre for commercial vans and three accident repair centres.
Farthing says: “We have seen quite a change from the start of the year on Škoda, Kia and Ford, all of a sudden we have more price range vehicles in electric. The Puma, the Elroq, and the EV3 all of a sudden are £30,000 vehicles rather than £50,000 to £60,000 vehicles. We are seeing an influx of people now that it is more accessible financially. We sold 28 Škoda Elroqs before the car landed.
“I’m not suggesting we are starting to breathe a sigh of relief that our targets are going to be easy now. They are still a challenge but all of a sudden we’ve got some volume product in there to help us achieve those. We put a lot of emphasis on test drives because it is quite a leap of faith from ICE to EV. We’ve just started putting EVs on our courtesy fleet as well so when people come in for a service they test that.”
Throughout the month of April, Furrows held its Škoda Big Electric Test Drive Events which gave potential customers access to the product line-up in the form of demonstrations and test drives. As well as the Škoda Elroq or new Škoda Enyaq being available to test drive, visitors had a chance to win a holiday voucher worth up to £10,000 plus daily prizes of a £250 experience voucher.
The process of boosting EV adoption has emphasised the importance of in-person interaction between dealers and customers.
“It takes me back to years ago where a customer would have five or six visits before they brought a car. Now it’s 1.6 visits for ICE. With an electric car its back to four or five visits because they want to be reassured. In some ways it has taken us back to the days where, rather than doing all their research on the internet, we are back to seeing them 4 or 5 times for that reassurance. For some it is not just the transition from ICE to EV, sometimes it’s the transition from manual to automatic”, Farthing continues.
“There should be more incentives for the customers to take that leap. Some of the EVs are quite pricey, we’ve got the luxury car tax for cars above £40,000 which a lot of the EVs fall into. Up until now they were excused but now they fall into it same as an ICE engine car. As far as legislation is concerned we could do with some more help. The manufacturers are getting there with the volume of cars and quality of cars but the consumers could do with a little more help from the UK government.”
The Furrows ethos
Now that it has taken the decision to take the EOT route and invested in the deal in terms of time and people, Furrows is looking to the future with confidence.
Coward says: “Dad would always say that his mantra was work hard and be good to people. We would never put that on a poster and put it around the building because that’s not our style but if there’s something that Furrows would recognise about how we go about our lives – being good to colleagues, customers and everyone around us, that’s our ethos. Long may that continue. If there was to be a fundamental underpinning idea about what the EOT will continue, it’s that.”