In recent years, HSS Hire has pursued a policy of developing partnerships with builders’ merchants to open up access to the lucrative plant and equipment rental market, providing an enhanced ‘one stop shop’ solution for customers.
According to AMA Research and as presented in HSS Hire’s most recent set of publicly available accounts, the value of the UK equipment hire industry is estimated to be £5.7bn whilst its “fragmented supply base” of over 4,000 providers (the biggest of which represents only c10% of the market) is said to offer an opportunity for businesses to grow market share. Indeed, despite the prevailing economic pressures, the sector has experienced 25% growth since 2017, with recent forecasts suggesting it could reach £7.1bn by 2026.
In the firm’s full year report for 2022, HSS Hire CEO Steve Ashmore outlined the potential for “capitalising on converging customer and supplier requirements” with each experiencing “difficulties and high costs associated with transactions.” He explained that “customers have broad requirements and consequently must access lots of suppliers, frequently struggling to control their expenditure” whilst rental equipment providers — from local specialist plant hirers to national generalist hirers — suffer from having “lots of end markets to serve, many customers to target but most (having) a lack of reach.”
Furthermore, there are “large acquisition costs associated with targeting the market and returns can be limited by underutilised resources” whilst the fragmented and highly competitive nature of the industry “could result in excess capacity, therefore creating pricing pressure and adverse impacts on planned growth.”
Merchant partnerships
Since 2020, one part of HSS Hire’s wider strategy has been to reorganise its network, removing a sizeable number of its own locations and developing a model of ‘implants’ within builders’ merchant branches. Allowing the rental specialist to reduce its costs, the format is said to offer significant benefits to merchants by opening new revenue streams from their existing customers with limited outlay whilst being able to leverage HSS Hire’s expertise, brand reach, logistics, support services and buying power.
Established in 1957 and now with revenues of c.£332.8m (FY2022), HSS Hire offers solutions from c.700 suppliers and provides national coverage from its 38 Customer Distribution Centres — which hold the majority of its hire fleet and carry out much of its equipment testing and maintenance — and its increasing investment in technology and digital solutions.
In recent months, the continued expansion of its builders’ merchant network has seen concessions added in branches of MP Moran (Kilburn), Alsford Timber (Beckenham), Kellaway (Swindon), Howarth Timber (Cheadle and Barnsley) and Beers (Wavertree), bringing the total number to around 85 at the end of 2023.
“There is a natural fit between the services offered by builders’ merchant and a tool and equipment hire specialist.”
Bart Murphy, HSS Hire
Selco Builders Warehouse is the latest merchant business to enter into partnership with the leading tool and equipment hire specialist in a move said to further enhance its own reputation as a ‘one-stop shop’ for tradespeople. It opened its first two satellite operations in its Slough and Milton Keynes branches, with Tottenham and Ashton-under-Lyne following before the end of the year. A “significant expansion to the partnership” is planned for 2024.
A satellite desk can be found at the trade counter in the branches, with HSS Hire teams in place to provide specialist advice for the full offering.
Selco CEO Howard Luft said: “This is a perfect partnership and an exciting development for our customers heading into 2024. Here at Selco, our commitment is to offer everything a tradesperson might need to go about their daily work all under one roof and the relationship we have formed with HSS Hire strengthens that proposition even further.
“At the heart of the ethos of both ourselves and HSS Hire is to offer outstanding service so it’s very much a win-win scenario for our customers. We are excited to have launched the partnership and look forward to it continuing for many years to come.”
Bart Murphy, Director at HSS Hire, added: “We are looking to expand into strategic locations across the UK and this partnership with Selco represents an ideal chance to do that. There is a natural fit between the services offered by builders’ merchant and a tool and equipment hire specialist and we are delighted to be working in tandem with Selco to enhance the journeys for both sets of customers.”
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Main image shows HSS Hire signage at the Watford branch of Lords Builders Merchants.
A version of this article appeared in the March 2024 edition of Professional Builders Merchant magazine. Click here to read the full digital issue, via the PBM website.
