Johnson Tiles is poised to end production in its historic home of Stoke-on-Trent – with bosses saying the cost of making its products in the UK has become increasingly unsustainable.
All 105 staff employed in production at the company’s factory in Tunstall are affected and currently being consulted. It is proposed all future manufacturing will be outsourced.
The move comes after a management buyout deal from parent company Norcros plc announced yesterday (Thursday).
It is set to bring to an end more than 120 years of production in the city. The designer, manufacturer and supplier of high-quality ceramic and porcelain tiles has been operational since 1901.
The new owners say the company will remain a significant Staffordshire employer and a UK leader in the design and supply of tiles.
The UK management team – comprising managing director Stephen Dixon, commercial director Rich Kelsall and procurement director Jason Bridges – will assume full control of the company from the end of May 2024, subject to legal protocols.
A statement released by the company said that following an extensive review of the company’s existing operations Johnson Tiles had announced proposals to move to an entirely outsourced business model.
It added that the decision meant staff are currently being consulted regarding the closure of the manufacturing facility in Tunstall, impacting up to 105 roles in production.
Managing Director, Stephen Dixon said: “We are, of course, making this announcement with very mixed feelings, acutely aware of what this means for our colleagues and what it says about UK manufacturing as a whole.
“It is with a heavy heart that we are looking to stop production at the Stoke plant but the cost of making tiles in this country – despite ongoing investment – has become increasingly unsustainable.”
The statement added that the company had capability to design-match any UK manufactured products and would be able to meet ongoing project requirements. It said, this is, in part, due to Johnsons’ long-standing commitment to carrying higher-than-average stock levels.
It also said that the deal offered the best way to protect the long-term success of the British heritage brand through challenging market conditions and the next stage of growth.
Stephen added “We have a great sourcing business and, together with our strong design and customer service capabilities, we are well placed for the future.
“This deal secures Johnson Tiles position as a leading UK designer and supplier of tiles, as well as ensuring we remain a significant employer in the Staffordshire region.”
Thomas Willcocks, CEO of Norcros plc, said: “We are pleased for Stephen and the management team and believe this agreement is in the best interests of staff, customers and shareholders of both Johnson Tiles and Norcros.
“We are committed to supporting the business as it makes this transition and look forward to partnering on opportunities in the bathroom and kitchen markets.”
To the year ending 31 March 2023, Johnson Tiles UK recorded revenue of £35.3 million, had made an operating profit of £500,000 and had gross assets of £25 million. However, Norcros said that the company had absorbed cash in each of the last three years.
Norcros said consideration for the sale will be £1 million, with a further “modest” earn out being dependent on the future equity value of the business, with both payable in April 2028.
