INTERVIEW: Shane Hilden, Smithie UK

He’s gone from working in a garage and having his stock stolen to growing a £22m distribution business, which is projected to reach £27m next year…

He worked under Centerprise founder Rafi Razzak for 13 years, but until now hasn’t told the incredible story about his own firm. Smithie UK MD Shane Hilden revealed all to PCR…

Visit Smithie UK’s ‘About Us’ section on its website and you’ll get the typical blurb – but it doesn’t tell the whole story.

“Established in April 2003, Smithie operates in Basingstoke as a trade only distributor focusing on the etail VAR and sub-distributor market,” it reads, adding that the team has over 40 years of combined experience in the market.

Impressive but not unusual, the description does a little bit of a disservice to the firm’s legacy – because the full story behind this growing tech distributor cannot be told in such a brief manner.

So how did Smithie UK become a company with a turnover of £22 million, supplying peripherals, SSDs (including the new Samsung 840 Evo mSATA drive), optical drives, security products and more to the likes of Amazon, Ebuyer, Scan, Novatech, Overclockers, Dabs.com and indie retailers? And where did Smithie UK get its name?

“I started in the industry in ‘82 and worked for a company distributing Epson printers called Micro Peripherals Ltd – as they were named then,” Smithie UK MD Shane Hilden explained.

“I stayed there for eight years and helped set them up in the North. Then they sold the company to an Irish firm, and I got a call from Centerprise MD Rafi Razzak. He said: ‘Why don’t you come and do for me what you’ve done for Micro-P?’ I said: ‘You can’t afford me.’ So my current wife at the time said; ‘Look, give it a go,’ and I said… [He sighs]

“So I started. Rafi had a certain turnover in 1990, and he told me: ‘I want to get to this amount.’ I said: ‘When’s your year end?’ He said October. I said: ‘It’s May, what do you mean you want to get to that amount by October? I can get you there by the end of May.’ So I got him to his target quickly.

“I set up his trade team. By the time I left in 2000-and-something, I had grown his trade team, and overall that year, he turned over a substantial amount.”

However, things soon took a turn for the worse.

“My wife got ill,” said Hilden.

“I tried to work remotely, but it didn’t work out. My team were still hitting targets and everything. I said: ‘If you push me, I’m going to go.’ So I said goodbye.

“My wife died later in 2008 – she had a triple organ transplant and didn’t quite make it. Anyway, her name was Marika, and her surname was Smith.

“Her friends called her Smithie.”

Hilden was working out of his garage when he set up Smithie in 2003, with a handful of staff.

Before his wife’s death in January 2008, Hilden became suspicious of activity at his warehouse.

“I had lived in Cambridge for nine months, where Marika was. I was doing a stock-take in December because I knew my remote warehouse were stealing from me, but Marika took a turn for the worse so it was pushed back to the New Year. She died on January 24th 2008, and in-between that time my remote warehouse had a robbery. It was a staged robbery, it was terrible. £80,000 to £90,000 worth of my stock had gone and I had to move the rest. I needed to find a warehouse.

“One of my friends – Taran MD Andy Miles – said to me: ‘I’ve got one.’ I said I couldn’t afford the rent. He said: ‘Don’t pay me then.’ He gave me nine months’ free rent.”

Miles let Hilden move all of his stock there for nine months. However, Hilden’s unfortunate turn of events wasn’t about to end just yet.

“While I was away in 2007, the Euro was about 1.55 to the pound in August. I was logging in, paying remotely and didn’t even think about it, but by the time I came back in February 2008 the Euro was about 1.15 to the pound. My accountants had been booking all my stock in at 1.5 for eight to nine months and I was buying the money remotely and paying it from Cambridge, buying it at 1.19/1.17.

“That cost us £380,000. Luckily, the company had £400,000 in it, so I had to declare my accounts. We lost all our credit limits.

“At that point I thought to myself I’ve put five years into this, I’m not going to let it slide. Obviously it was named after my late wife, so I thought: ‘I’ve got to fight and keep this.’”

THE TURNAROUND

Hilden had earlier hired Simon Riley from Centerprise, who now works as sales director at Smithie.

“Simon must’ve just thought: ‘God, what have I done? I’ve left Centerprise,’” said Hilden.

“Alright, he was a manager there but he’s come to work for his mate in his garage and suddenly he’s lost all his limits.”

But Hilden had an idea. Well, his financial advisor did, to be precise.

Hilden explained: “He came to me and said: ‘Your staff [that used to work at Centerprise] have all got pensions that they haven’t paid into in five, six, seven, eight years. They’re only little bits of money – one might have 30 grand, one might have 25 grand – I’m going to go and talk to a pension trustee and see if I can put them all together and give you the money.’

“Funnily enough, he was also the one who found the name Smithie. My staff were happy to do it, and they all got preference shares. We raised £229,000, plus £60,000 that my present wife Adele put in. Even though we’d managed to go through the year and make a profit, traders just still didn’t want to know. So that sort of got us out of jail.

“Going back to the £380,000 I lost because I wasn’t there – it was horrible. I thought to myself: ‘How am I going to announce this and hang onto everything? Because it’s just going to crumble and die.’

"And it was around the time of the credit crunch. So suddenly all of these companies that used to supply you and give you big credit were going bust. It was really hard to get out of it, but you know – persistence. I didn’t pay myself for a couple of years, that was quite fun. I found a new woman in my life, Adele, and went to get a mortgage and they told me no. They said:‘You haven’t earned any money’, but I showed them why and they still said no.

“Now I’ve got them knocking on my door again.”

DRIVING SUCCESS

This year Smithie’s turnover is set to reach £22 million, and it has projected £27 million for the following 12 months.

Hilden’s business sense aside, what else stimulated him to grow his business to such levels?

While Marika was arguably the biggest inspiration behind Smithie UK, there was someone else who spurred him on.

“Rafi [Razzak, Centerprise owner] knew Marika very well from the 13 years I’d worked at Centerprise, and he loved her to pieces,” Hilden added.

“Rafi and I have like a father-son relationship, in a way. I taught him a lot and he taught me a lot. He will never admit that but in his heart of hearts… I taught him lots and showed him how to go in a different market. It used to make me chuckle when he got pats on the back saying he’d done this and done that – I used to think: ‘I did that.’

“He’s in my sights – that’s my goal. Because the day I left, he said to me: ‘You’ll fail and you’ll be back.’ And I thought in my head… [He makes a face] but he basically spurred me on.

“In the Thames Valley 250 list, Centerprise has gone from £50m to £48m in annual sales from 2012 to 2013, and we’ve gone from £12.7m to £17m. So the gap is closing. Next year I’ve got £22m. If we can get to £30m next year…

“He’s my target. The day I overtake him, I’ll be a happy man.”

Can Hilden reach his goal? Only time will tell. But one thing is for sure – today Smithie UK is a firmly established tech distributor.

And looking back at what Hilden has been through over the years, the only way for him – and his company – is surely up.