The rapid rise and steady decline of DHAIS’ Hearing Health and Mobility in the mobility sector
Entering the mobility sector in the late 2000s with arguably one of the most ambitious strategies the sector had ever seen, DHAIS plc controlled a nationwide network of 27 retail branches in its heyday.
12 years on and the company’s retail arm, Hearing Health and Mobility, has appointed administrators for its mobility division as DHAIS looks set to bow out of the mobility arena for good.
What happened to the mobility retailer which aimed to emulate giants such as Boots and Specsavers in the independent living sector?
THIIS maps out the tremendous growth and gradual decline of one of the mobility retail market’s trailblazers and what the future may hold for DHAIS.
An ambitious M&A strategy
Cardiff-based DHAIS was originally a freelance marketing company, generating sales leads for digital hearing aid retailers, manufacturers and distributors in the United Kingdom before diversifying into the retail of hearing and mobility products.
In the late 2000s, DHAIS’ Founder and Chairman Mark Moss saw an opportunity to consolidate the fragmented but expanding mobility and independent living retail market, incorporating hearing aid centres in mobility stores and using its marketing expertise to drive growth.
The strategy was largely inspired by what was happening in the hearing market with large retailers such as Specsavers and Boots Opticians diversifying into hearing aids. The company set out to implement a similar concept of retailing of hearing and mobility.
The ambitious strategy required capital to establish its retail network, with DHAIS floating on the junior market of the Stock Exchange (then known as Plus Markets) in June 2008.
The goal was to raise funds on the market needed to finance the retail entrance expansion, which would largely be driven by an aggressive M&A strategy.
DHAIS leaps into mobility retail
In December 2008, half a year after floating, DHAIS completed its first acquisition: Hearing Health and Mobility Ltd.
Based in Northampton, Hearing Health and Mobility was comprised of five hearing and mobility stores. Shortly following the DHAIS takeover, it acquired a further nine mobility stores from Cranley Investments.
With 14 mobility stores under its belt, DHAIS – via its subsidiary Hearing Health and Mobility – quickly implemented its hearing & mobility concept by establishing hearing centres in each store.
Not long after entering the mobility retail market, DHAIS almost doubled its store portfolio less than three months on.
Acquiring Keep Able Ltd, a national mobility retailer in administration, for £220k, DHAIS added Keep Able’s portfolio of 13 mobility centres across the UK to its fledgeling Hearing Health and Mobility network.
When DHAIS acquired the Keep Able portfolio, Keep Able had achieved a £2.8m turnover in 2008 but suffered a loss of £300k. DHAIS was confident it would be able to turn around the business and return it to profitability by effectively integrating it into its new group.
After the acquisition and integration, six were subsequently shut, leaving Hearing Health and Mobility will a total of 21 stores in under a year.
Big growth and big costs
All occurring in the midst of one of the largest global economic crashes of a generation, DHAIS’ growth was nothing short of staggering. For the year ended 30th June 2008, the company’s turnover was £2.54m, with an operating of £572k.
A year on, DHAIS had almost doubled turnover to £4.8m but incurred an operating loss of £375k.
In November 2009, Moss said the loss was largely a result of the high level of operating costs involved in integrating the companies it took over but that “integration efficiencies will be felt in the coming period.”
By the year ended 30th June 2010, sales almost double again, reaching £9.4million, however, DHAIS incurred an operating loss of £1.3m, a substantial increase compared to £375k the previous year.
Additionally, the company reduced its store portfolio considerably to 16, exiting 11 loss-making branches, however, Moss maintained that its hearing and mobility aid centre formula would prove successful in the market and championed the benefits that economies of scale would deliver the large-scale mobility retailer.
A year on and the company reported its third consecutive loss, with sales of £7m and an operating loss of £894k for the year ended 30th June 2011 – a marked improvement in comparison to the loss of 2010.
By the end of the year, the company had reduced its store portfolio to 13, however, noted that the losses over the three years were “the only loss periods in seven years of trading, and have occurred primarily due to rapid expansion” in order to gain economies of scale and overcome barriers to entry.
A turnaround on the cards?
Despite the losses of the previous three years, results from 2012 suggested that DHAIS’ retail model may be coming to fruition. For the year ended 30th June 2012, turnover had increased to £7.4m with an operating loss of £142k – a significant reduction on the previous year.
The improvement continued the following trading year, with turnover up to £7.9m and an operating loss of £86k in 2013.
By 2014, DHAIS achieved its first profitable year since floating, with group turnover at £9.6m and an operating profit of £162k.
With a retail network of 15 stores and now Motability-accreditation, DHAIS saw hearing aid sales increase by 65 per cent whilst mobility product sales grew by 11 per cent.
With revenue failing to grow as much as expected in 2015 to £10.6 and increased marketing and infrastructure costs, DHAIS dipped back into loss, reporting an operating loss of £82k. By the year ended 30th June 2016, turnover had decreased by 7 per cent to £9.9m and the company suffered another operating loss of £198k.
In 2016, the company confirmed it was reviewing options for its mobility division and focusing on its hearing operations, which Moss said: “Continues to offer significant growth and profit potential.”
Emphasising difficulties in operating its mobility division profitably, the company in 2016 stated: “Some of the stores are spread far apart thus not benefitting from the cluster advantage enjoyed by some of our mobility competitors.”
Moving away from mobility
Following its announcement in 2016 regarding its mobility division, DHAIS began gradually realigning its business activities by reducing its mobility operations and expanding its hearing aid division.
In addition, the company decided to focus on organic growth and highlighted that no further acquisitions were planned in the near future.
Underlining its shift in strategy, DHAIS announced in March 2018 that it would be delisting itself from the stock market to streamline the business and benefit from cost-savings. In Jan 2019, the company became DHAIS ltd once again.
In its strategic report for the year ended 30th June 2017, the company highlighted a number of changes to its Hearing and Mobility network.
DHAIS sold its Sidmouth and Northampton branches to local mobility retailers whilst closing a further three stores during the year.
The retail alignment for 2017 came as the company saw a further reduction in turnover and an increase in operating losses.
In its annual report for the 18 months ended 4th January 2019, it surrendered a further two store leases during the period and reducing its store portfolio to just five.
It reported an operating loss of £415,000 in the 18 months to January 2019, however, achieved a turnover of nearly £12m, largely thanks to a 12 per cent rise in DHAIS’ hearing division.
The end of Hearing and Mobility?
Appearing to be the final step in DHAIS’ departure from the mobility sector, a note on the door of Hearing and Mobility’s Bournemouth store recently informed visitors that Hearing Health and Mobility has appointed administrators and says the branch has ceased trading.
The note reads: “Please be advised that Alistair Wardell and Richard Lewis of Grant Thornton UK were appointed as Joint Administrators of Hearing Health and Mobility Limited on 22nd January 2020.
“This branch has ceased trading until further notice.
“Queries in respect of the Administration should be directed to the above office, quoting reference D20597045.”
It follows the takeover of Hearing and Mobility’s Cardiff branch in December 2019 by Snowdrop Independent Living and marked the first acquisition by the Welsh mobility supplier since its MBO earlier in the year.
The former Hearing and Mobility website now also directs visitors to a new Hearfocus website.
According to the Hearfocus website: “Hearfocus, formerly Hearing & Mobility, are one of the UK’s leading private hearing healthcare companies. Since 2008 we’ve helped thousands and thousands of people enjoy the benefits of better hearing.”
Speaking to a spokesperson at Hearing Health and Mobility, it was confirmed to THIIS that all remaining Hearing and Mobility stores are now temporarily closed and all enquiries should be directed to the administrators at this time.
It is not yet known what this means for Hearing and Mobility customers, particularly those that have purchased powered mobility devices from the company in the past, however, it would signal that the ambitious mobility retailer that set out to transform the mobility retail sector over a decade ago has come to an end.
