Confident strides after walking on rice paper

biggest privately owned fork-lift truck distributor. At that time it had

a turnover in excess of #25m and was knocking on the door of Scotland's

top 200 companies.

I recall someone writing to me afterwards to query my assertion, in

the piece, that some fork-lifts can clock up 80,000 miles a year.

Whatever the imperfections of my own understanding of that specialised

market sector -- and I freely confess they are many -- a lot has

happened to Clarion and to some of those involved in it, since the words

appeared.

Last December, its remaining assets were bought by Harvey Plant.

Earlier it parted company with Clark, the Kentucky based manufacturer of

fork-lifts, with whom Clarion had had a relationship stretching back to

the Scottish company's formation in 1976. That #25m turnover proved to

be the high point in Clarion's fortunes. But it has spawned, in an

indirect sort of way, one lusty offspring.

In April 1991, Frank Brown, who had been Clarion's sales and marketing

director, and a Clarion colleague Robert Bruce decided to leave and

start a new fork-lift business from scratch. Brown freely admits he had

enjoyed a well-remunerated life at Clarion. So why throw it all in to

start again? And why do it, with no guarantee that he would find another

fork-lift manufacturer willing to give him a franchise?

He had been with Clarion for 18 years. He had learned the business

from Jim Bisset, its chairman and managing director and major

shareholder. Frank Brown says he left because of an honest disagreement

with the rest of the Clarion board about future corporate strategy.

The company was, he argues, on the brink of real critical mass in a

highly fragmented market. Vital to crossing that threshold, he argued,

was pushing new unit sales even higher. But Clarion was operating in a

shrinking market -- total UK fork-lift sales had fallen from some 17,000

units in 1988 to 15,000 in 1989 -- and that market was notorious for the

rice paper-thin margins being achieved on new truck sales. At the time,

Jim Bisset described it to me as ''a cheap price market.''

Brown found his onwards and upwards ambitions were not shared by the

rest of the Clarion board, increasingly preoccupied with whether they

should be chasing such cut-throat new sales at all. He wanted to push

on. They were tempted to consolidate on the existing hire fleet and make

money from service, parts, and rentals, where the healthier margins had

always resided. Jim Bisset was even toying with the idea of selling bits

of the business off to local managers.

Brown's option might have been to buy Clarion's operations in the

Manchester/Leeds area. He had run that region earlier in his Clarion

career. ''I liked the area. I had lived there for some time. But I

didn't want to go back. This was home.'' So he left, with Bruce, to

start up on his own.

He had his eye on a Toyota franchise. Depending on who you listen to

the Japanese, better known for their cars, are the world's number one in

fork-lifts, selling some 70,000 units a year worldwide. Toyota has

around 12% of the UK market and wants to push that through 20%.

Frank Brown thought he detected a weakness in the existing Toyota

dealership arrangement in west-central Scotland. When they left Clarion,

Brown and Bruce didn't have a franchise. ''If we were going to convince

Toyota, we had to prove to them that we were already in the fork-lift

truck market. We wouldn't get a franchise just because we had paper

plans to be in that market.''

Brown's banker manager politely wondered if he had taken leave of his

senses, but he and Bruce took economically priced premises in the

Hillington Industrial Estate, hired two engineers, and Fairway Forklifts

was born. They bought some second-hand equipment and started doing some

repair work. ''But in truth we weren't doing very much business at

first,'' confesses Brown.

The bank, despite the manager's scepticism about them throwing up a

comfortable lifestyle, committed itself to a #60,000 loan, if a

franchise with a manufacturer were to materialise.

Proposals were put to Toyota. The Japanese came and looked at Fairway.

They must have liked what they saw and what they heard about the

potential for sales penetration, because a franchise for the Glasgow,

Paisley, and Kilmarnock postcode areas was forthcoming.

''We beavered away,'' recalls Brown ''knocking doors, launching

mailshots, even advertising in The Herald.'' Advised by Trevor Clark of

Clark Advertising, the campaigns began to pay off. Fairway had bought

five Toyota units up front and that meant putting their own cash up

front. Although fork-lift manufacturers help with interest-free

facilities, this isn't the car market, with stocks being made available

at the factory's expense.

In the first six months, Fairway sold 15 new units, turned over

#300,000 and lost quite a lot of money. In the second six months, sales

reached 27 new units and turnover climbed to #583,000. In calendar 1992,

a total of 63 new fork-lifts left the Hillington base, helping turnover

top #1.2m. Fairway is already claiming a 23% market share in the Glasgow

postcode area and 19.7% overall. Less than two years in existence and

Fairway has virtually delivered Toyota's market share ambitions. Little

wonder Brown and Bruce are looking for some geographical expansion in

their franchise area.

These advances have been achieved against a grim market backdrop.

Shipments of new fork-lifts in the UK dropped to 12,000 in 1990, 9000 in

1991, and some 7700 at the 1992 trough. Only now are they climbing above

8000 again. Thankfully for Brown and Bruce, the Scottish market has held

up better than most. Scottish sales of counterbalance trucks, which

account for 80% of the total market, stood at 280 in 1990, rose to 320

in 1991, and were still at 275 in 1992. This year looks less

encouraging, but Brown contrasts the Scottish experience with the region

around Coventry, where sales of 208 units in 1990 slumped to just 81 a

year later. ''People were pretty well wiped out there,'' he says.

My main reason for leaving Clarion was the opportunities I saw in

Scotland,'' says Brown. ''I saw other people losing their appetites for

selling new fork-lifts, so the competition wasn't as fierce as it might

have been.''

Brown has a simple way of describing his belief in pursuing new truck

sales, even though margins on them are painfully tight. ''You've got to

go on topping up the barrel or one day you'll go to it for a drink and

you'll find it dry,'' he says.

There are, he adds, other ways of boosting margins when cut-throat

competition keeps the selling prices low. ''A central plank of Fairway

is to keep our own costs and overheads as tight as we can,'' he

explains. They chose low-cost Hillington, rather than a more expensive

location. They were reliant on computers from day one to cut down on

paper flows. The team is tight -- the two directors, six engineers, and

two women in the office.

Brown agrees that one core consequence of this recession is that

customers, be it for fork-lifts or anything else, are no longer willing

to pay prices that will keep the supplier in a flambuoyant lifestyle.

''People are demanding quality at an economic price and that's what we

are trying to deliver,'' he goes on. Fairway's engineers are guaranteed

to be on site to deal with breakdowns within four hours. So far the

average is two hours. Customers aren't charged for travel time or for

the call-out.

Brown recalls the days when a customer like Prestcold, on that very

same Hillington estate, would maintain a fleet of 30 or 40 fork-lifts.

''That's where demand has really contracted,'' he says. ''Demand these

days is from smaller companies, orders come for one or two units at a

time. And we are geared up to meet the needs of that kind of customer.''

''It's no good saying: people should be paying more for their

fork-lifts. If the market says it won't bear, we've got to live with

that.'' So far, Fairway Forklifts is doing just that.

''The only business in Britain that's in the business of making money

is the Royal Mint,'' says Brown. ''Everyone else is in the business of

providing goods and services. You've got to have your heart in a

business like this, otherwise you might as well forget it.''