A successful children’s clothing brand is hoping to rise from the ashes in new rebuilt premises after a fire devastated the original unsprinklered facility earlier this year. It is a great story of overcoming adversity, but there are key lessons here too. Businesses across the UK need to abandon the commonly held belief that fires will not happen in their premises. To prevent similar scenarios from occurring businesses need to be more proactive, making informed business resilience decisions to safeguard themselves from fire’s devastating effects.
The fire which broke out due to an arsonist in the early hours of 1 May destroyed the My 1st Years warehouse and head office in Northampton, with the business reporting the fire cost at £15 million, which included £3 million in stock and £1 million in equipment. The business also had to make refunds to 1,400 customers when trading was paused due to the disruption.
The business has been fortunate to find new premises to lease at a reported cost of £3 million so that it could get itself back in position to be ready to trade. It is also great to see so many loyal customers return to the brand and champion it. Sadly, history tells us this is not always the case.
What has been interesting to note from the owners has been their experience in recovering the business and challenges with under insurance, meaning that they have had to foot considerable additional costs for the recovery. In the case of My 1st Years, the business was underinsured in some areas, so it was paid 20% less than it might have been. Furthermore, insurance doesn’t take into account the stress, anxiety and impact on business potential (i.e. growth and opportunity) that the interruption a fire can have.
It is a challenging story that makes you wonder about preventing a repeat occurrence and plans to mitigate incidents should they occur. One hopes that the fit-out of the new premises has included a sprinkler system. However, this is not certain and is repeated from other such cases. According to a study1 carried out by the Business Sprinkler Alliance, only 16% of respondents considered the risk of fire to their business as a significant factor in their thinking when deciding whether to install sprinklers, with the majority not committed and/or relying on their insurance to cover any potential risk.
Judging by the many fires across the commercial sector, there is a disconnect between the business continuity plan and the building. In a building predominantly used for storage and without active fire protection one of the big risks is fire. This can lead to the loss of the facility that is critical to your whole operation. The continuity strategy would have to consider replacing the building and stock. Just as happened here this will mean you will have to find new premises, machinery and logistics to recover whilst working to maintain customers. At this time machinery lead times have lengthened, and sourcing of materials has increased costs, all factors to consider. You can then look to ensure that any arrangement such as insurance could bridge the gap.
A strategy like this can be adopted by a business that has robust financials and a strong client base. However, a more successful strategy would be to protect the very critical elements of its operation that are vulnerable in the first place with systems like sprinklers.
Sadly, fires such as My 1st Years occur on a regular basis and remain one of the leading causes of commercial property loss. This is another case of compliance with legislation and obtaining insurance not equating to resilience. It is also a case where in rebuilding a business must take decisions on taking risk and managing for the potential outcomes – and to a degree hoping it does not happen again.
Having sprinklers fitted makes buildings and businesses resilient to the impact of fire because they automatically control or even put out the fire before the fire service arrives. In most cases, this results in businesses being up and running again, usually within hours of the incident.
For more information about the BSA visit the www.business-sprinkler-alliance.org
1 UK: Commercial and Industrial Attitudes Study 2018 – Business Sprinkler Alliance