From middlemen to kings of cashmere: Heritage profits from a gutsy decision
The issue
Heritage Cashmere produces luxury clothing and accessories for leading retail brands. But until recently, there was nothing high-end about the Yorkshire-based group’s business performance. In 2006, it was failing to make a profit on a turnover of £2.2m.
Over 10 years it had become less a manufacturer and more a middleman for imported cashmere. It wasn’t adding value, and its margins were being squeezed by low-cost competition.
Heritage joined Designing Demand, the Design Council’s business support programme, embarking on the Immerse service, which offers intensive support for established firms .The brief was simple: revive what had once been a promising company.
“When I first saw Heritage,” says Designing Demand design associate Andrew Williamson, “my impression was that things were a bit here, there and everywhere. The team could see there were several quick wins we could deliver.”
The crux of the problem was the company’s physical environment. “Everyone was in their own pigeonholes and no one communicated properly,” says Williamson. In particular, the design department was underused and out of sight. “Design was adding cost but not value.”
The solution
Immerse begins with a day’s intensive assessment to determine a design action plan. Then, over 18 months, companies are given support to implement their plans. For Heritage, the key was to build a stronger identity as a designer and innovator and to compete more effectively.
We knew what we wanted but we didn’t have the guts to go for it... it’s been a sea change in 18 months John Kaye, Heritage Cashmere
“The process looks for innovative and creative design ideas,” says Williamson. “We came up with a list, grouped under areas such as strategy, environment and culture. Heritage was very receptive. They wanted us to show them how to implement all the points in the action plan.”
“It was obvious to us that they should pull the design team and the sales team much closer to everyone else so everyone could understand how they worked,” he adds.
That required investment, as well as physical and attitudinal changes. Despite the gathering storm clouds, Heritage found £40,000 to build new design facilities – a long-term commitment. “As long as you can explain to people why these things are an investment, not a cost, they are prepared to commit,” says Williamson. “You have to help them understand how their business will benefit.”
The outcome
Heritage’s designers now work directly with clients, helping them to understand and anticipate customers’ needs. One result of this was a London fashion showcase that generated revenue of £300,000. A new relationship with a Thai company has provided access to innovative technology for printing directly onto cashmere, bringing unique products to market. Heritage also plans to create an own-brand offering and to produce branded items for hotels.
“We knew what we wanted but we didn’t have the guts to go for it,” says Heritage chairman John Kaye. “The changes we took on board put design at the centre of the business – it’s been a sea change in 18 months.” A profitable one, too. Turnover in 2008 was £2.75m, and the forecast for 2009 is set to match that figure, with a budgeted profit of £100,000, the first in the company’s history.
Much of the success is down to attitude. Williamson explains: “The best businesses are saying: ‘If we don’t invest in product design, communication and so on, we’ll be on a slippery slope.’ If you don’t prepare yourself for when the recession starts to ease, you risk losing ground on your competitors.”
For more on Designing Demand, visit www.designingdemand.org.uk.
Article first published in Design Council Magazine, Issue 6, Summer 2009