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Entrepreneurs Panel

David Pollock
Richard O'Sullivan
Jeremy Roberts
Jennie Johnson
Steve Purdham
Tony Caldeira
Debbie Pierce
Julie Meyer
Charlie Mullins
Laura Tenison
Michael Oliver
Brian Hay

Avoiding Offshoring?

Tony Caldeira

Set up St Helens-based home textile company Caldeira Limited in 1991 to supply cushions, pillows, throws, curtains and bedding to volume retailers worldwide. Caldeira opened a Chinese joint venture company in 2004 and completed its expansion into a 200,000 sq ft factory in the Hangzhou province in 2006. The firm has now moved its headquarters to Knowsley and, in 2007, opened its doors in the US with its first sales office in New York. The firm bought 14 Fabric Warehouse stores out of administration in 2008 to cement its expansion into retail to boost its manufacturing division.

Question: 

I'm thinking about buying a low-end clothing manufacturer, which is making a small loss on its £2 million turnover. At the moment it still does all its manufacturing in the UK – is it realistic to think I can turn it around without offshoring? And is that really worth the effort for such a small business?

Answer: 

It is possible for UK clothing manufacturers to prosper in the downturn without offshoring, but the business will probably need a Far Eastern supply chain and several unique selling points to remain competitive against Far Eastern manufacturers.

UK manufacturers can survive and prosper by either building a brand, working very closely with fashion retailers to get a specific look, having the flexibility to make small production runs or having quick production turnaround times. UK manufacturers can also succeed by becoming bespoke or moving upmarket but this seems unlikely here, as this is a low-end clothing business.

The key to this business opportunity is the strength of relationships with customers and the flexibility of the manufacturing facility. If there are successful longstanding relationships with key customers and the business can react quickly to trends in the marketplace then the opportunity could be lucrative.

Caldeira Ltd has proved that UK
manufacturers can compete in home
fashions. However, in most cases, the
competition in this sector is fierce and
global. So unless the business is special and
can do most or all of the things mentioned, I
would tread carefully.

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