Jason and Elvis Bey on building Sydney Tools from the ground up
They might only wear black T-shirts to work but the Bey brothers have grown their Sydney Tools from the ground up. So they don’t need any help from investors in suits, thanks.
Jason Bey is laughing about investment bankers.
He’s not trying to be cruel, but he’s remembering the time about five years ago when he and older brother Elvis were first approached by a banker about potentially investing in their fast-growing Sydney Tools business.
“It was a mate who said he knew a great guy and we should meet him,” Jason Bey tells The List with a chuckle. “And this bloke in a suit turns up and I ring Elvis and say, ‘This bloke is a banker and he’s not from NAB or CBA, what do I do?’ We don’t usually have people in suits around here.”
This article is from The List — Australia’s Richest 250, published March 15, where the Bey brothers are worth $600m.
While he was courteous, Bey made it pretty clear to the banker that he and his brother weren’t interested in selling up, didn’t need outside investment to grow, and were content to keep the business in their private hands.
“It is flattering to receive offers and valuations, but we never built this business to sell it,” he says. “Elvis and I have laid block by block, building this on strong foundations, and we are not a startup that is looking at flipping, taking cash and moving on with our lives. We have got our legacy, and that is continuing our work here.”
A glance at Sydney Tools’ financial results shows why the Beys are happy with their position, having gone from helping out in their parents’ tool repair shop as teenagers to starting Sydney Tools in an old post office building in 2001 and turning it into one of Australia’s quietest retail success stories.
Revenue for Sydney Tools reached $815 million in the 2023 financial year, and the business posted a net profit of $56 million – about the same result as the previous 12 months but in a time of higher costs and lower consumer spending. The business has high savings and low borrowings, so it’s little wonder there’s been a steady stream of inquiries from prospective investors or advisers, which the co-founders have rebuffed.
The Bey brothers are the type of young business owners who wear tight T-shirts to the office, and are probably more comfortable in a warehouse or talking to tradies in one of the nearly 100 Sydney Tools stores that have sprung up around Australia.
They grew up around Sydney’s western suburbs, still live there and are passionate supporters, and now sponsors, of NRL club Canterbury-Bankstown Bulldogs.
Their grassroots origin story does not mean they should be underestimated. The Beys have quietly and methodically – and with a high degree of knowledge about market forces that impact their industry and what their customers want – built an extremely impressive business.
This year is a big one for Sydney Tools on two fronts.
In the second half of 2024, the Bey brothers plan to open their 100th store, which represents roughly a doubling of outlets in the past four years.
Before then, they will likely complete a big move of their Sydney base to the Moorebank Intermodal Precinct. The new, purpose-fitted 27,000sq m warehouse and office space represents the maturing of a company that has grown quickly, to the point that it’s bursting at the seams in its current base in Sydney’s Roselands.
“As the business grows, we have to be more responsible.” – Elvis Bey
Elvis Bey says the Moorebank facility will be a game changer, giving Sydney Tools the ability to ship container-loads of products to its stores around Australia via the interstate freight terminal at Moorebank, which connects to the inland rail network.
“It gives us extra space to grow, but it’s also the 60,000 metric tonnes of carbon that we take off the roads every year without trucks taking our goods around, which is great for our business,” Elvis Bey explains.
“There’s the solar platform that will be on our roof, so we’re putting electricity back into the grid,” he adds. “As the business grows, we have to be more responsible.
“The rail network we will be using brings the country together for us, from Sydney to Melbourne, Queensland, the Northern Territory. If there’s a smarter and cleaner way to do it, we’ll look at it.
“We have to be innovators in our space and look at things that others may not do.”
The Bey brothers grew up in a family of hardworking Lebanese migrants. Their father had a tool repair shop and it was only a short hop from there to getting into the tools business themselves, though with some clever innovations.
The duo bought an old post office building in Dulwich Hill, close to home and an area with plenty of construction around and therefore a steady stream of tradies.
“I guess the second generation don’t want to be repairing tools, so when we saw that building come up for sale, we purchased it,” Elvis Bey says. “It had parking and a couple of hundred square metres of space.”
The Sydney Tools brand was chosen simply because it was their home city, and they figured the red logo would stand out to passersby.
Their first store also had, of all things, an escalator to take customers to its upper floors – an addition inspired by German brand Bosch, which, along with Victa, was one of the company’s first accounts.
“I went to Germany with Bosch and I went to a store in a town centre that had these escalators to take people up,” Elvis Bey explains. “We figured tradies would never walk up the stairs, and you had to get up there. So I thought, ‘Great idea, let’s do that in little Dulwich Hill.’ It worked.”
Sydney Tools has been growing steadily since, and has accelerated its store openings in recent years.
Jason Bey says the business has three key mantras: win on price, range and service.
He and his brother still try to get involved personally in training new salespeople, and they closely monitor market conditions and law changes so they can quickly stock up when new tool or equipment mandates are released or laws and conditions change.
“We don’t make every right decision, but we back each other when right or wrong.” – Jason Bey
“We’re owner-operators,” Jason Bey says. “I think that’s what makes a difference. How many businesses of this size are owner-operators? We understand this business intimately and try to pass on our learnings and teachings to our staff and do what we can to share the information we have, to help our employees.”
The company has ridden the infrastructure boom in the past decade, and its backbone is sales to tradies. In that way, it also acts as something of a barometer for the health of retail spending and activity in the property sector.
Jason Bey says Sydney Tools’ customers are susceptible to interest rate movements. “So in the past year we’ve certainly noticed that the ticket count [transaction count] and also the average spend is down at times. Our costs are up and we certainly have to work harder for our sales. But we are still looking for growth opportunities, and we are efficient.”
As for how the brothers manage to work together, Jason Bey laughs and points to the glass wall that separates their respective offices, which means they can see but not always hear each other.
“I think with me and Elvis there’s an understanding between us – brotherly love is the only way to put it,” he says, with a grin. “I support Elvis every step of the way, [and] he’s got my support. We don’t make every right decision, but we back each other when right or wrong. That’s the sort of relationship we have.”
Elvis Bey adds: “The one important thing is that we have strong principles. We don’t always see eye to eye, and it’s OK for people to disagree. But Jason does have an older, wiser brother.”
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