Turning risk into reward

by Catherine Woods - Thursday, 13th December 2007 -

Credit-impaired customers can be risky for a business but not for Brighthouse, says the company's FD, Giles David.

Brighthouse specialises in the sale of household goods on a rent-to-own basis. Its customers typically don't earn much and can't get credit. Brighthouse provides them with household goods, such as electronic appliances or furniture, and they make weekly repayments until they own the equipment outright.

David says Brighthouse doesn't have a problem with customers other merchants may consider a bit dodgy. “We operate a relationships-focused business in the stores," he says. "A new customer would start on a lower value item and then build up a relationship with the store manager and build up a payment profile so they can eventually buy more expensive items."

One of the unique things about Brighthouse’s proposition is that the company doesn’t charge interest on arrears. David explains: “We have a one-off late payment fee, which is £2.70. This is designed to cover the very minimal incremental cost that we would bear. But it’s designed to rehabilitate the customers. Customers who have a strong payment record, therefore, have greater access to more products.”

It’s the type of business that's less affected by economic factors such as a drop in consumer confidence or a tightening of credit markets. “I think that’s one of the interesting things about the business and the results are showing through,” David says.

Turnover for fiscal year 2007 is set to reach £129m. That's 11 per cent higher than the year before.

Picture source

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