Hull Live speaks to founder David Kilburn on MKM’s incredible journey to becoming a £1bn turnover business
“Never” did David Kilburn think the business he set up with good friend Peter Murray in the autumn of 1995, in the wake of redundancy, would go on to reach £1bn turnover. “We just wanted to make ourselves a living, and we were ambitious because we wanted to be the best in the area but we didn’t have a vision to become a multi-site business,” the 80 year-old told Hull Live.
In those early days, David, then 50, and the small team he had assembled would ring a fire alarm in their Hull warehouse to celebrate a sale. That practice would quickly have to be retired amid the sheer volume of sales flowing in.
MKM Building Supplies now boasts more than 130 branches and employs more than 3,000. Its name adorns Hull City ’s 25,500-capacity stadium and the firm is majority owned by global, $185bn investors Bain Capital. And last year David was given a CBE for his services to the construction industry and charitable work.
“In my case, it was ‘I needed a job’ and in Pete’s case it was a new dawn, a new opportunity,” explained David. “In many ways Pete was taking a bigger risk than me – he is 10 years younger than me – and he was in his prime at 40.”
Running a business was not alien to David, who had launched a Scarborough site some 10 years earlier. It was acquired by Harcros – the builders’ merchant firm that would later make him redundant.
MKM started life in a small warehouse on Clough Road – not far from where the business’ central office is now located. Five people made up the initial team, including Andy Beet, Richard Taylor and Janet Taylor – who later became Peter’s wife.
With a small amount of money from a handful of friends, the business scooped up orders thanks to David and Peter’s connections in the area. But the team had to rent a truck to make deliveries.
Just a year into trading, they launched its second branch in Driffield, closely followed by another former Harcros colleague opening up in Scarborough. It was to be the start of something which set up MKM to become the UK’s largest independent builders’ merchants.
“The magic dust of MKM was really created when we opened Driffield because that’s when we put the business model together that gave them a 25% stake in their own business,” explained David.
The branch director model is still the “heartbeat” of the business — affording many managers a lifestyle change which brought greater autonomy, status in the business community and better pay. It means each branch is part-owned by its manager, via separate limited companies.
“All these other businesses tend to have area, regional and national management layers to run a multi-site business like ours,” said David. “We have none of that. These people are – although we don’t call them that — MDs of their own businesses and they’re charged with making all of their own decisions, supported by the centre. We don’t have a head office at MKM, it’s a dirty word.”
The set up has produced some particularly gratifying moments for David over the years. He explained: “One Christmas Day, my phone rang. It was a branch director calling simply to say thank you. His wife was outside unwrapping a car he’d bought for her, and he wanted me to know that without our model — giving people ownership, real responsibility and the chance to succeed — it wouldn’t have been possible.”
As they started out, larger competitors had been telling customers that MKM “wouldn’t last three months” and even leaning on suppliers not to support David and Peter. In fact the opposite transpired, with many manufacturers offering MKM extended credit which was useful as it found its feet.
And it turns out that footing was solid, because in its 30 years, MKM has weathered a number of storms – not least the 2008 financial crisis. By this point David had bought out other shareholders alongside private equity investors 3i, with Peter leaving the business. The crash rocked UK construction output, but MKM managed to continue trading with only a 10% fall in revenue, where David says some competitors had shed 30%.
“People were working that much faster and harder because they had an ownership model. Also, we didn’t make redundancies. We decided we’d stick with the people and that shedding numbers would be an absolute last resort. That was because it was the people who got us to where we were. We’ve always thought that paid us back in spades over the years.”
The business went on to steadily open more branches before Covid took it from “near tragedy to boom time”. MKM’s branches were inundated by tradespeople wanting as much material as possible, fearing it would be forced to close. Having navigated social distancing requirements at its counters, the resulting “bonanza” from furloughed workers taking on home renovation projects and spending diverted from holidays gave the group a major boost.
In 2020, MKM opened its 70th branch and appointed Kate Tinsley as CEO. Since joining, she has grown sales from about £465m to £1.1bn. And now there are ambitions to have 250 branches within the next decade. “It’s still got huge opportunities for growth,” said David. “I see the business continuing to grow significantly over the ensuing years. And for those people that will be with the business, it’s going to be an exciting time.”
While it might be difficult to replicate those days of ringing in sales with the warehouse fire alarm, MKM employees now have plenty to be proud about thanks to the company’s extensive charity and community work which has included work with the Humber LEP, David’s chairing of the Regional Growth Fund, its founding of For Entrepreneurs Only – a peer-to-peer support group for those starting businesses in Hull and East Yorkshire and most visibly, the sponsorship of the Hull City stadium.
“There are a lot of things we do that are below the radar, but then we do the obvious stuff like investing in MKM Stadium,” said David. “It’s because we’re proud of Hull. The city gets beaten up on the national stage more so than most places. It’s always in our psyche that we need to promote Hull because other people don’t necessarily recognise it for what it is.”
Kate Tinsley said: “Thirty years in, MKM still feels like a family business — even with 135 branches and billions in turnover ahead of us. That’s rare, and it’s something I’ll never take for granted.”