“We supply from local stock, nationwide, the small builder’s ever-changing routine kitchen and joinery requirements, assuring no-callback quality and best local price. Howdens was designed from scratch with the needs of the small builder in mind. That is our absolute focus.” - Matthew Ingle, Howdens Founder and Former CEO, 2010

Founded in 1995, Howdens was built to serve the local builder. The company manufactures and sells kitchen cabinets and joinery to builders who fit the kitchen for the end user. Howdens’ trade-only model is engineered to avoid the inefficiencies of a retail model where all cost savings are passed back to the builder.

The company operates from ~800 depots and has ~32% market share by volume of the UK kitchen market. Howdens’ unique business model generates a consistent ~50% ROIC and has compounded FCF per share at 12% per year over the last 20 years.

We recently interviewed two executives to explore Howdens: one from the largest UK kitchen retailer, Wren Kitchens, and another with a Former Howdens executive who worked in the Netherlands business before the company exited the country in 2018.

We interviewed these executives because we’re exploring two questions that we believe are important for Howdens:

1. How could the growth in Wren Kitchens impact Howdens' core UK business?
2. What can we learn from Howdens' history in the Netherlands that could help us understand the French market opportunity and the broader European growth opportunity?

The Potential Threat of Wren Kitchens

Unlike Howdens, Wren’s retail model is focused on serving the end residential homeowner refurbishing their kitchen. The difference in the targeted customer between the two companies defines the business model. Howdens runs an always-in-stock inventory model with favourable credit terms for builders to buy and fit joinery products. The focus is on helping builders complete jobs and get paid quicker.