From Farrow & Ball to Fermoie: Martin Ephson's surprising journey

0:03This is Business of Home. I'm your host, Dennis Scully. Every week I'll be speaking with leaders and innovators from all corners of the home industry. My guest this week is Martin F.C. Martin is a driving force behind not one but two well-known names in the design industry. In 1992, he and his business partner, Tom Helm, took over what was then a struggling historical paint company, Farrow & Ball. Together, they helped turn it into the powerhouse it is today. But they weren't finished. In 2012, Martin and Tom partnered again to launch Fermoy, a vertically integrated fabric and wall covering brand that has since grown by leaps and bounds.

0:51I spoke with Martin about why so many UK companies are coming to America, how the global decline of textile mills created a local opportunity, and why his leadership style boils down to a simple principle. Look after people, and they'll look after your business.

1:36What? I thought that was the very definition. I know of amber interiors. You're right. That said. There's still work to be done. There's still more. There was more beige to be uncovered. All right. But ironically, a lot of the rugs that we've come out with in past collections all did actually have quite a lot of color on the scheme of when you're looking at them. The Billy, the Georgie, there was pinks and blues and there was a lot more like reds and greens and a little bit more of a saturation. that I actually wanted to move from. And I wanted to make sure it had a little bit more of a neutral, beautiful base layer.

2:12So that's what this collection is all about. And the geometrics and some of the other patterns that have come into this? It's all inspired by vintage pieces, almost all of it. So anything that we've done and designed into have been inspired by things that we've seen that are never new. It's always old. Okay. So I know Bowie is a big highlight for you. What is that one all about? so bowie is quite moroccan right but it's very much like a contemporary version of a moroccan inspired rug that is very palate neutral it's very soft underfoot it's very durable and it seems very classic to me it's really pretty in a bedroom and i love it in you know any kind of space that's going to really need something super basic to be on the floor but that when you look at it up close there is a little bit more pattern and nuance to it.

3:03To learn more, visit laloyrugs.com. That's L-O-L-O-I rugs.com. And now, on with the show. Tell us a little bit about your family and where you grew up. And there's an exotic story in there. Well, Dennis, I'd like to start at the beginning. It's always a good place. My father was a diplomat and I happened to be born in London where he was posted at the time. And we then moved to Cairo and a succession of exotic other countries, which looking back, it clearly helped shape my aesthetic. And come 10, I was sent away to one of those traditional UK boarding schools, then went on to Charterhouse where I made great friends, including Tom Helm, who unbeknown to me was going to be my business partner for most of my working life.

4:05And after graduating, just to sort of complete the timeline, I went back to Ghana to live for a few years, which was the country of my father's birth, where I had only spent two years as a child and enjoyed it very, very much. But I intended to stay for a couple of years. I ended up staying for four. And when I got back to England, I realized that all my great friends had wonderful jobs and were getting going on their careers. And I was feeling somewhat left behind. And through a series of coincidences, I ended up being in corporate finance where I was gainfully employed for six or seven years.

4:47And being quite entrepreneurial, I had the desire, strong desire, to get involved in a business of my own. My great friend, Tom, asked me to go and have a look at this little company on the southwest of the UK in a county called Dorset, which I duly did. And the background to me going down to have a look at this little firm called Farron Ball Brackets Southern Limited was that Tom had ended up being, or was not had ended up, was at that time decorations advisor to the National Trust. and in those days back in the 80s they used to still do quite a lot of restoration and renovation projects and he had worked there for many years initially under the tutelage of David Milenarik who's one of our finest decorators and had spent many a winter mixing up great big tubs of paint in historic finishes and colors and had been thinking a long time about, you know, maybe a range of historic colors might be a good idea.

6:00And he was on a job in the West Country, a private job, and he was redecorating a dining room in a period house. And he was trying to get a deep red in dead flat oil without great success. And on one of his visits, one of the painters said, well, I think I know where we could get this mixed up for you. And Tom, almost to humor him, said, well, look, I'm down next week. I need X gallons. See what you can do. And the following week, Tom duly arrived, lined up on the dining room floor were all these cans of this incredible deep red in dead flat oil, Tom was completely amazed. He'd never heard of this company that could manufacture these things.

6:45So he hot-footed it to Wimborne in Dorset, which is the market town that Farronbore was based in, and had a look around and thought, my goodness, I can't believe there's still a paint maker making all these historical finishes. But the company looks a little bit sort of tired to say the least. I was one of the few people that Tom knew in finance and said, look, I found this company and make a lovely product, but I'm very worried about the company. So I just don't know if I want to spend any time doing anything with them because I don't know if they're going to be around for much longer. Can you come and have a look?

7:21So I went down and had a look and Tom was absolutely right. Um, we ended up in April, 1992, acquiring a majority stake in, in, in the business. And there were only 11 people employed in the business, and it was really very small. And everything was a priority in terms of reorientating it and setting it on the path to becoming something quite significant. Well, so what did the financials look like at the time? So when you finally get serious about making an investment? In a word, appalling. it would have been easier and cheaper if we hadn't resuscitated the existing business but we didn't want to lose the business's dna and to this day it serves the company well and the current sort of variable make make a good story of you know its origins and the timeline and that that was important and it was particularly important to tom and and me and you know the workforce were heroic uh there they were in battling against all the odds and with a great deal of skill and we used to do everything including grinding our own pigments on a wonderful um grinding machine called an edge runner which is pretty much like a stone mill that one would grind corn and wheat with, you know, really, really something out of our industrial past.

8:51And they had the skills. It's still there to do that. That's what we wanted to retain. So we ring fenced the recipes and the manufacturing, and we basically changed everything else. So we started part-time very, very quickly. We were both sucked into it full-time. And at the time, my wife and I and our children were living in London and we sold up and moved in down west to be near the business and we did that within two years of having taken over the company and the timing was quite turned out to be quite auspicious because it was at that moment in that that time that we could see some light at the end of the tunnel and we were reorientating the business to become purely a decorative paint maker and yes we came up with a lot of ideas but generally they were born out of making a virtue out of necessity in terms of for instance we couldn't afford to give the discounts that the major paint manufacturers did to the painters to secure getting their getting the business we had to appeal to the end consumer and bypass the decorator we put the paint and the choice of paint and paint color back onto the homeowner's agenda and took it off the builder's agenda where it had been for several generations.

10:11We developed a state emulsion to emulate, which was, I think, you call it flat mat in the States, to emulate the paint that it had and be supplanted after the Second World War, which was Distemper, which had that wonderful dry, chalky look. That was what we were trying to do, but with sort of in a modern guise, which is what we achieved but to get people to want to use it we had to make sure that it was the customer that specified it rather than the builder that just bought it and again until we came along people seemed to forget that certainly in the uk you would move into a house and the walls would be magnolia and the woodwork would be gloss white we revolutionized that and changed it forever thank goodness and uh we tom had a great store of of colors and ideas um through his experience in in some of the finest houses in in the in the country and to do a to create a licensing deal with the national trust was essentially a bit of a no-brainer whereby we could use or create to recreate the colors that were found in some of the national trust houses and the National Trust range of paints that had been launched were championed in particular by Min Hogg who used to be the editor of World of Interiors and we owe her a huge debt of gratitude because she picked up on us very very early did a wonderful feature on the colours and that got us onto the path of being the product that people wanted to see on their walls.

11:55And our timing was also quite fortuitous in that there'd been a huge leap in home ownership in the UK. And there was this newfound interest in home that had coincided with some political changes that made it possible for a lot of people for the first time to buy their homes. And so that coincided with a series of TV programs where designers would show you how to renovate your home on a budget. And of course, paint became a central feature of that. And so there was an element of fortuitous timing that we played into. And we were working very hard to make sure that we were the paint that got mentioned in all the what you call shelter magazines, the home interest magazines.

12:45and we worked hard at making sure that when they were doing home features that they were creating that we were around ready to supply whatever it is they needed to put on the walls and that served us very well as we sort of grew the business. And grew the business you did so remarkably I mean as you say it was an incredibly small team when you first started and over the course of 12 years, you had very impressive growth. And how big did the company become before you finally sold? Yeah, it took us sort of 14 years from when we bought to when we sold. The first two years were an incredible struggle, but even then we were getting double-digit sales and profit growth.

13:31We invested back into the business, all the profits. We had no debt. we started off with 11 people as i said and 6 000 square foot and by the time we sold on our manufacturing footprint was about 60 000 square foot and our total number of employees was in the region of 400 and we would sell in a week or even a few days what we did in our first year so we we took full advantage of of the of the opportunity and we did toy with the idea of adding on product that one needed at that same point of the decorating cycle be it flooring carpets or whatever etc etc but we parked all of those except for wallpaper and the wallpaper story was a natural fit for what we were doing and so we stuck to our core business I think you call it the financial parlance we were a pure plate company didn't didn't deviate from what it is we we knew we were able to do and just made sure that every day we did it a little bit better.

14:35We were also well before the internet age. So, you know, people sort of forget all of that. And one of the reasons, part and parcel of us having to go direct to the consumer is that we didn't have a nation network of retail outlets. And so we needed to deliver what you wanted, Dennis, to your house. Everyone said we were absolutely mad. There was no way you could deliver paint to people directly, but we did. And we weren't sure that it was necessarily going to work. And now it seems like, well, of course, that's the way you did it. That's how everything gets delivered, but not back then it didn't.

15:17And I'll never forget that a few years after we had launched and started, we were beginning to get a little bit of traction. I was at a dinner party and a friend of mine who actually didn't know I was involved with Farren Boar started talking about this incredible paint business she had come across. And it was just fantastic because when they went down to their cottage in the country at the weekends, the paint she had ordered in the week was delivered waiting for her by the door so she could get on with the decorating. And I said, well, that's absolutely marvelous. And I'm delighted it's working because actually it's me.

15:51In fact, I delivered that paint to your house. I remember it well. You have a charm. Well, luckily, I wasn't actually making the delivery. We were pretty much doing everything else at that stage. Well, I mean, all of these little things that you did that ended up making such a huge impact. And as you were saying earlier, it was so much of what people seem to love about Pharaoh and Ball is just all the associations that they have with the brand and its history and the colors and the story behind it. And you really saved this heritage brand and got it off of life support, as it sounds like it was when you arrived and breathed new life into it.

16:36Yeah. I mean, what we were able to demonstrate is that if you're creative enough, you certainly can still manufacture in sort of post-industrial societies. And I think there's a lot more of that now than there used to be, which is really exciting. You know, artisan manufacturers, craft manufacturers, even quite large manufacturers who are mining some rich seams in various industries that have got so big that there are niche opportunities beneath them. And also there's a trickle-down effect as well because we made a clear-cut policy decision to try and source as locally as we could. Sometimes that geographically was quite a broad net, but generally we were sourcing everything within a few hundred miles of our factory.

17:22And only recently I was catching up with one of my suppliers who I remain very friendly with, who was a can maker. And he related the story, how I'd come to him and was talking about what we were going to do and supply and what I'd need to be having supplied. and I'd look around his factory and I saw this wonderful little pot which contains about 100 milliliters and the whole idea of a sample pot was actually a bit of a novelty and in many ways we certainly invented the sample tin sample pot tin either tin existed but the application didn't And so I said to him, that is the tin I've been looking for to put all our samples in, because we suggest it's absolutely critical that people try out the paint in situ before you go and buy a great deal of it to cover a wall and then maybe decide it's not quite what you thought it was going to be.

18:23And so he said, oh, no, nobody wants those tins anymore. In fact, I'm just about to decommission that whole line, literally, and scrap the machinery. And I said, over my dead body, I'm not buying anything else from you, any other tin size, unless you retain that. Anyway, again, long story short, by the time we sold the business, we were buying over a million of those cans from him a year. And when I saw him the other day, he said, that was the best decision I ever made, not to scrap that line, because I'm now selling between three and four million of those pots a year. So when we opened our first showroom in the States in the D &D building in New York, I was absolutely amazed that people would use FedEx in the very same building to get by sample pots and have them delivered to two floors above or three floors below.

19:15That's how far distribution had moved on since we had originally launched. Well, and that was such a big move for you, too, to come to the D &D building. I don't know how many years into your leadership it was before you came to the States and opened in the D &D. I remember it so well. Well, our first overseas showroom was in France, and that was for a lot of reasons. One, proximity. If we were going to go and test the water overseas, let's do it somewhere fairly close so we can figure out exactly how this needs to be done. Our first UK show wasn't until 1998, which was on the Fulham Road. And from day one, it was a huge success.

19:55And that gave us the confidence to open more. Then we opened in Paris several years later. And a French friend of mine said, if it doesn't work, promise me you'll shut it down in three months. Because if the Parisians don't like it, from the beginning, they will never come. Anyway, they did like it and they did come. And then we started opening up elsewhere. And of course, the holy grail was the States. And the States has been a graveyard for many a British business. So we were extremely cautious about how to do it and what we were going to do. So we spent time understanding how distribution for high-end home products worked in America.

20:37We took our time to really research who did what and where. and the upshot of that was a showroom in the D &D building. And again, we were the very first paid people to ever get into that space. And I think the Coen brothers, who were people who owned that building at the time, we had to go and see them in some incredibly intimidating office on the 70-something floor of some building. And they were extremely skeptical. In those days, you had to be interviewed to be able to get a showroom. and I think they thought it was sort of slightly amusing and let us give it a go. Anyway, it worked out extremely well.

21:18But they said, if you've got the money, we'll let you do it. Other way, yeah, we'll take your money, that's fine. We didn't have that much money because we were reinvesting everything we did have back into our growth. I wonder, because back in those days, you had to show them the financials and really go through the interview. Yeah, yeah, yeah. It was an intimidating process. But anyway, we got there and fortunately it worked out. And then in 2006, having grown the business significantly and had a lot of fun along the way, and we had a lot of people approaching us. And at a given point in any cycle, you've got to say, well, you know, maybe we should take some of these approaches seriously, which is what we did do.

22:00And it was very nice to have made a sale and then be able to do some other things in our lives and still had a young family. And it was great to be able to spend more time, literally spend more time with them. And then Tom and I had a bit of a reboot. Yes. Well, so to wrap up, Farrow and Ball, so as you say, lots of people began to approach you. Clearly, people could see the business was doing well. What made you finally decide to sell to whom you sold to? I know you were very mindful of not wanting the business to be broken up or acquired by a big competitor and just molded into what they were doing.

22:41Tell me a little bit about that before we move on. Private equity was really getting into its stride in the early 2000s. And that seemed like quite an interesting place to get involved. Because as you say, if we were going to sell out, the natural sort of candidates would have been the large paint makers who would love the volume to put into their existing operations and love the opportunity to enhance their margins. But we just thought that would be a disaster because they would generally want to close down Farron Ball and just accommodate the volume in some of their existing plants and all would be lost.

23:24So they weren't even in the reckoning or the running. And we knew that if it was a financial purchaser, well, they would be building on what we had created. And that was important to us. And we set up the deal that a lot of the people who had worked with us, because, you know, you're so dependent on all your colleagues, were going to do well out of a sale by us and purchased by others, and walked away, you know, with our heads held high. The business was preserved. The business model was intact. And people who had contributed to our success were going to be rewarded. And that all happened. And I'm glad to say that the business is still thriving, still the market leader.

24:12And as far as I'm aware, doing well. Yes. And as you've talked about in the past, you left plenty of runway space for that business. It's important to leave gas in the tank. Well, you also made the decision not to stick around. So you and Tom both, and it sounded as though you didn't want to see whatever changes they were going to make, right, happen? Yeah. Absolutely. Absolutely. Yeah. So you might have gotten even more money, Martin, if you had stuck around, if you'd gotten the consultant agreement for a while, but you... Undoubtedly, but it's not all about the money. And Tom and I just really wanted a bit of time.

24:51Well, exactly. So you take some time off and I'm so curious as to when the two of you start to think, all right, it's time for us to try another business. Well, like so many of these things, it was actually quite unplanned. We were having lunch together about three years after our sale and talking about all the things that we didn't do. And by that, I mean the associated products that I mentioned earlier that you need at the same point in that decorating cycle. And we were thinking, wouldn't it be quite interesting to maybe explore how well we could do in one of those areas? And probably maybe one glass of wine too many.

25:31We thought, yeah, let's scope it out and give it a go. And the chosen medium was fabric because it's a crowded market, but we felt there was a clear-cut opportunity there. And so we bought a factory whilst it was totally empty and said, okay, now how are we going to do this? Well, so to your point about it being a crowded market, what was the opportunity that you imagined was there? What's been happening in the textile industry like so many others is that there are fewer, fewer mills, which means there's less choice of substrates or materials. the enjoyment of the printed fabric had started to disappear.

26:16And we felt that we would like to sort of bring back the enjoyment of the printed fabric. So the enjoyment is in the texture. It's in the total differences. It's in the balance. A lot of the subtleties that are being sort of rubbed out by volume production. But we thought that in the mainstream market, there was an opportunity to present things in a little bit more exciting way. And actually, even the physical presentation and to sort of cut a long story short, we de-risked the fabric manufacturing business from our perspective by essentially taking the Farron Ball model, a fully integrated vertically integrated business where we control all the elements of the manufacturing and the distribution and the brand and just change the product instead of now being painted fabric and from a customer's perspective it was critical for us to be able you know we've come from a color industry background and to be able to present all our all our designs in a wide range of colors and to do that without being bankrupted by inventory you needed to be needed to manufacture to order everybody said oh no there's no way you can print to order particularly on natural fabrics because you're going to weigh 16 meters at minimum just getting the color right and we love a challenge like that and we did have some expertise on color technology that we brought that we learned from the paint industry so the idea for us was to bear down on all the variables control all those variables, and get the color printing right first time.

27:56This month, I'm catching up with Amber Lewis about her new rug collection for Lalloy. You were talking earlier about really wanting this to be a collection for everyone. And I think an element of that is the perhaps surprising fact that it is available, ready to ship. Tell us about that aspect of it. I mean, look, times are rocky, right? We know. So I really am so appreciative and so pumped to say that they are actually available and in stock, meaning you can get your paws on them quite fast. And I think that that's kind of the dedication that the Laloys put into these things is that when they are launching something, they really make sure that it's going to be a value for everybody, including coming out how they're going to come at it from a stock in stock position, which it's not easy to do, right?

28:48I mean, imagine you're juggling the economy and all the ups and downs of what's going on every single day, but then to make sure that your customer is going to get what they need and what they want to continue that user experience and really customer service is just what they do so well. Well, exactly. And I think availability and I think inventory levels are important to them and they want to be able to show a product and then say, yes, it's readily available. I mean, people will take to the streets if we don't get a Bowie in stock nine by 12, you know? Well, exactly. Particularly after you've just described it as you did.

29:26People are going to hear this and they're going to want to be able to. To learn more, visit LolloyRugs.com. That's L-O-L-O-Y Rugs.com. And now back to the show. When you started thinking about the fabric brand, was it always with the thought that the United States was going to be a key and big market for you? So when you were at Farrow and Ball, it was years before you would come to the States. But I'm assuming that everything that you learned about the American market told you that it was a pretty big market if you really want to build a dynamic business. But were you thinking small in the beginning and staying in the UK?

30:13Or were you always thinking about the US? No, not at all. Funnily enough, we weren't thinking particularly big about this business because we'd been there, done that. And one of the reasons for selling is that we both run the business in a very personal style. And it became less exciting when there are many, many people working for you that you don't really know. I was a firm believer in management by walking about, and I would love to speak to people all over the company at every level. And you're slightly reluctant to do that if you don't know their names. So it was never our intention to build Formoy into another Farron ball in terms of scale and reach.

31:00but we have been well received and of course you know that by implication means you know you're going to grow and it's been very satisfying but we've been growing at a controlled pace and we we're still you know we're very small we only employ 50 people and and and that's a good number um i think i know everybody and that's that's that's a good that's a good place to be um and And just sorry, to go back to your question, America, United States was always a central part of our plan. And for several reasons. And that became even more of a focus when Britain decided back in 2016 to get out of the EU.

31:44Which was such a great decision, don't you think? Oh, wait. People have different views. But, you know, sadly, it has made us as a nation poorer. And you can't just walk away from the biggest trading bloc in the world and think you're going to be OK. Anyway, that's by the by. And we were active in several, in quite a few European markets. And when the Brexit, which was us leaving the EU, really cut in, we had already lost a huge amount of our European business, which we haven't to this day recovered. And we launched in the States just within a few years of having launched the whole business. And in 2016, when the Brexit vote took place was when we said, look, America's where we're going to have to really focus and devote a lot of our energies to.

32:36so that that's that's what we've done and uh we we are represented by a fantastic network network of third-party showrooms and throughout the states um and uh we think we look after them well and they look in turn look after us well as well and we're growing with all of them um fairly rapidly in what is a crowded and difficult market so we're doing something right since we originally spoke dennis we've launched our wallpapers, which was actually just last month. They've been incredibly well received. And we think that there's going to be reasonable appetite for our papers in the US as well. So we're very excited about what we're already doing and what we plan to do in the future.

33:24In selling in America, we talked earlier about how so many British companies, uh many have have tried and and failed on different levels to to make a go of it here in the u.s every british company that i speak to today is uh is focused in a in a laser beam like fashion on the u.s because things are challenging in britain because european market has been challenging i'm wondering what it really takes in your mind to be successful in america well one reason um that everybody's keen to sell in America is that you are the biggest and at the high end, the most sophisticated market in the world. And you'd be mad if you're producing a quality premium product for the home sector and not wanting to be in America.