Case study

PRS Guitars

“If you want to grow a premium brand, the challenge is finding advisors that are just a conversation away from helping you find a solution" Gavin Mortimer, CEO, PRS Guitars Europe

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Paul Reed Smith’s beautifully designed guitars have been coveted by musicians in the US and beyond for the past 35 years. After decades of importing ‘PRS Guitars’ into the UK, distributor Gavin Mortimer accepted an offer to sell his company to the US-based guitar manufacturer six years ago.

Paul Reed Smith’s beautifully designed guitars have been coveted by musicians in the US and beyond for the past 35 years. After decades of importing ‘PRS Guitars’ into the UK, distributor Gavin Mortimer accepted an offer to sell his company to the US-based guitar manufacturer six years ago.

Rather than spelling the end of his relationship with the brand, he has instead become an instrumental part of the wider group’s evolution.

He remains at the head of its European hub to this day. His team of six technicians make sure the US-made guitars are perfectly serviced and tuned, before delivering them to retailers across the UK, Ireland and Europe, as well as Turkey and Russian states.

Achieving sustainable growth

“PRS Guitars Europe now has an annual turnover of over £11 million,” says Gavin. “We’re achieving growth of about 15% a year globally. We’ve doubled our business in Europe over the past five years and, despite a tricky year, we’re still over 9% up on 2018.”

The brand could amplify its growth by increasing production, but Gavin says this would be a mistake if quality was not upheld. “Even though there’s a year-long waiting list for our guitars, you can’t just open the tap. So, today our job is more about managing customer expectations than sales. We’re hiring all the time in the US factory, but for every 10 people we train, only three will become the highly skilled, long-term employees we need to make our high-quality product.”

Local market knowledge

Business environments vary greatly across borders, so choosing the right markets is key. Here, Nathan Tinkler and the team at Fortus have played an important role in providing access to the right local contacts.

“US firms think the Netherlands is a great place to do business. But thanks to a local expert that Nathan put me in touch with, I found that actually its legal, tax and corporate structures were not a good fit. It’s a country which is just really good at promoting itself.”

By contrast, conversations with a recommended contact in Germany showed there were valuable opportunities for the brand. “This meant we were able to find out everything we needed to know about trading in Germany,” he explains. “We may be an SME, but the quality of advice we get from Fortus has always been of a level you’d expect as a large corporate.”

That’s why Gavin says he sees the Fortus team as problem solvers who can help with anything. “If I’m thinking ‘how do I do that?’, I just make a call and I get the answer I need. That’s their trump card.”

Nathan and his team understand my needs as a BUSINESS OWNER.

Gavin Mortimer
PRS Guitars Europe

Managing business risk

Gavin has been working with Fortus for the past few years to manage these risks to the business. Yes, he received advice early on about tax and other accountancy ‘101’ services, but these areas of the business are now “buttoned down” and running efficiently. Today, the value is in conversations he has regularly with the Fortus team.

What’s great, Gavin concedes, is that the advice is never black and white. Rather than telling him what to do, the team at Fortus work together to take a wider view of the business, identify any risks on the horizon and formulate strategies. Take Brexit, for instance. “Nathan hasn’t advised us to take one path. Instead, we’ve now got a business plan in our back pocket which covers at least three scenarios,” he says.

Lately, these conversations have moved on to how the two PRS companies can trade more efficiently. “We’re a wholly owned subsidiary, but what’s good for the US business is not necessarily what’s good for us,” Gavin explains. “The Fortus team make sure that any decisions taken does not penalise us here in the UK. Nathan’s been able to do this because he has the stature to build a strong rapport with his equivalent over there. He just gets stuck right in.”

Best advice at the right time

These conversations also result in ideas turning into opportunities. “I always thought R&D Tax Relief was about guys in white coats with Bunsen burners,” Gavin says. “When I described to Fortus  how we’ve been helping PRS Guitars to design and field test their electronic components – getting the right tone from a pickup is a dark art, for instance – they pointed out that we’ve helped to move guitar making forward as an industry, so we qualify for this relief. This saved us about £55k in tax last year.”

Yet, Gavin never feels like advice is being pushed on him. “Nathan and his team understand my needs as a business owner. They know that taking the time to talk about opportunities and risks is vital. At the same time, they never waste my time by talking about services that I don’t really need, like selling me a pension scheme. I know that when I get advice, it’s advice I can trust.”

The Right Answer

I’ve been working with Gavin for over 20 years, but the past six have been particularly exciting as he’s transitioned from UK distributor to being part of a global brand.

We’ve supported the growth of his company in a number of ways, from providing VAT and R&D Tax Credit expertise to having those regular conversations about longer term strategic planning.

It’s also been great to provide Gavin with support of an ‘international flavour’. He knows that, no matter what his question, we have someone in our network who can give him the right advice about whichever country he is looking at.

Nathan Tinkler COO
01604 746760

nathan.tinkler@fortus.co.uk LinkedIn profile

“What’s great, is that the advice is never black and white. Rather than telling me what to do, the team at Fortus work together to take a wider view of the business, identify any risks and formulate strategies"

Gavin Mortimer PRS Guitars Europe