International ambitions for British sheepskin brand Celtic & Co

Cornish fashion and lifestyle label Celtic & Co is on international expansion course, having seen its export trade increase by an average of 238 per cent year on year over the last three years, in what the company describes as a significant international ‘sales boom’. Overseas business now accounts for more than 20 per cent of its annual turnover, up from just 1 per cent three years ago. FashionUnited decided that now would be a perfect time to quiz the brand’s founders, husband and wife team Nick and Kath Whitworth, about their recent success and caught up with them over the phone to find out how the Newquay-based company is bucking the trend in a difficult economic climate, and what the future holds for the premium sheepskin brand.

According to your latest financial report, you have recorded a ten-fold increase in profits due to an ‘international sales boom’. Which markets have been the strongest for you?

Nick Whitworth: Primarily it’s the United States that is driving this growth. For the last three years we have seen growth of 38 per cent year on year just in the US market alone. American consumers seem to love our product. We have a dedicated US website, and we are also very actively marketing ourselves there through our mail order catalogues, and this seems to work really well and boost both interest in our brand and sales. On the back of our US success we have done the same with Canada and Australia, where we have also launched country-specific websites. We’re focusing on the English-speaking markets for now, mainly because from an operational point of view it’s very easy to localise our UK site in terms of language and keywords, and it’s an effective step that requires relatively low resources. But we are also going after the rest of the world. Japan is picking up nicely for us, too. Our website is now fully transactional in all currencies of the world, so whatever country you’re in, you can shop in your own currency and language at the check-out stage. In the last six weeks we have shipped to over 30 countries.

Does being a British - and also a ‘Made in Britain’ - brand carry a lot of kudos for international customers?

NW: I think it definitely helps with exports. We are British, we produce in Britain and I believe this adds a certain credibility and appeal. People still think of Britain as a big manufacturing country, even though we have sadly lost a lot of it. But being a British brand still stands for quality and value for money, and I think we use that, I hope, to our advantage. I do believe that you can create a far superior product if you can make it yourself, in your own factories, as we do. You can control the quality and what it’s made of, how it looks, how it’s packaged, far better than if it’s done off-shore in China, or Indonesia or Vietnam. 85 per cent of what we produce is made in Britain, and the rest sourced in Europe.

Kath Whitworth: The fact that we’ve always been committed to using only natural materials plays a big part in our USP, too. We will not use anything that isn’t a natural product. We believe in sustainability. Our sheepskin is all a by-product of the meat industry. No matter what we do, it needs to be sustainable – and it is. Some of our pieces last literally for years and become wardrobe staples. Nowadays with fashion, you maybe wear an item two or three times, then it gets discarded and you get another one. That’s absolutely not us. We’re about the long-term. We’re the antidote to fast fashion.

Is it an advantage or is it more challenging to be a specialist brand, especially with a relatively seasonal product such as sheepskin?

KW: I think it’s a bit of both. We have got a much smaller trading window, but obviously we’re doing all we can to overcome this by chasing winter all around the world. But we can also be specialists in what we do, which I think our customers really appreciate. Because not many clothing brands can do that now. We are a seasonal brand, and I don’t think we need to protect ourselves from that. Other outdoor companies manage; just look at some of the good old outerwear companies - that’s all they do. I think it’s just a question of doing what you do really well.

What do you attribute the sustained growth you have experienced to?

KW: I think the biggest thing is we listen to our customers’ feedback and we pretty much try to grow organically. We go for safe, steady, affordable growth and we keep our expenditure under control. But more than anything, we never forget that without the customer, we’re nothing. The customer to us is king, and our customers’ needs and requests drive a lot of our business strategy and development. For instance, we have expanded our product range accordingly due to customer demand, and we now offer a wide range of products, from footwear through knitwear to outerwear, accessories and homeware. Everything we do is in-house, so our call-centre is in-house, our returns department is here, our factory is here, which means we are very very close to our customers, even if we’re not actually the ones who are speaking to them daily. This determines our strategy and product growth and everything we do.

You first launched the brand in 1990. What is your background and how did you come to launch a specialist sheepskin brand?

NW: I’m an engineer by trade and I was working down here in Cornwall on air crafts. Kath was in sales. I decided I wanted to leave the air force and set up my own business. I always wanted to be self-employed, which is completely the opposite of air force life. One of Kath’s family saw an advert saying ‘Ugg boots for sale’ - the whole business was on the market. Kath had always had a pair for many years and absolutely loved the product, so the interest was there straight away. But the company was originally run by a bunch of surfers who would make a few pairs for a few days, went for a surf for a few days, would come back and make a few more pairs. It was essentially a run-down business, but we could see the potential and decided to buy it. We sold our house, got some money and went for it. There was nothing to buy, really, just a few sewing machines and all the patterns. But we did, and the rest, as they say, is history. From this tiny little enterprise we took over in 1990 we have just grown the business steadily, with just a short interlude in between when we left for a period of time.

KW: It started with the footwear, and we added clothing in 2001. It was challenging and a big learning curve, but it also paid off. Whereas the footwear is relatively easy to develop - a boot is a boot, a slipper is a slipper - clothing changes every few weeks, the style, the fashion, the trends. But it has grown to be an equally as important aspect of our brand as the footwear. I think we both must have some entrepreneurial spirit within us. When we started, we didn’t have a clue how to do it, but we just got on and did it.

Who is your target group in terms of consumers?

NW: Primarily, our database of customers is female. We sell mostly ladies products, and in terms of age group from about 35 years old. We’re aiming for a certain person who wants a bit of quality and is prepared to spend a little more. But for that, our products will last a lot longer than just a few weeks.

How is your distribution structured?

NW: Mail order is our primary channel. The e-commerce and the mail-order are very linked. About 75 per cent of our orders come from online, and 25 per cent are via mail or telephone. We’re always looking for new customers, and obviously the e-commerce is a very good way of doing that with digital marketing. They both drive each other. We would never stop – at the moment anyway – producing and sending a paper catalogue, it’s by far the best way of getting your product in front of the customer, who then go on the website and order online.

Wholesale is a small but also growing part of the business. It accounts currently for about 10 per cent of the business. We are now actively looking to expand. Because there are still a lot of people out there who want to touch and feel of a product the old-fashioned way and prefer to shop in a retail environment. Although the high street is a harsh environment at the moment, there is still room for growth there, because people will always want to go and see and try on. So we now have a trade account manager who is charged with growing our wholesale base and is actively out traveling and visiting shops. We are at the stage where we are assessing the best stores that suit us. Because we don’t want to go into lots of shops on the high street in every town. We want to be in the more high-end boutiques that share a similar ethos to us.

KW: We want partners who will give our customers the best experience. It’s got to be a very sympathetic handling. We don’t want to flood the market – that would just destroy our brand. We haven’t got a target in terms of how many accounts we want to open, we just want to choose the right ones.

Do you have any plans to open your own stores at all?

NW: No. We have a factory outlet, but we’re not aiming to do retail ourselves. It’s not what we’re experts in. I think it would take up too much of our resources. And we’ve got so much growth potential as it is, especially with the international expansion and in wholesale. We’re not aiming to go that way.

Which areas of the business do you feel will generate the biggest growth for you, short-term and long-term?

KW: We don’t differentiate between the three main categories, footwear, outerwear and knitwear, they are all strong performers. I think the biggest growth we will have is more geographically, and that is the USA. We’ve barely scratched the surface there in terms of numbers. We’re doing a lot more marketing this year, so America has huge potential. I would expect that over the next 5 to 10 years, because there’s six times as many people there, the US will overtake our UK business. So, short-term the USA, long-term generally internationally. There are a lot of countries out there. And then obviously the trade / wholesale route. We will focus on it and give it a good push, and which one will win over the long-term, wholesale or international, I don’t know. We will see.

With international expansion a key priority, and being an all-round British business, are you worried about the impact of Brexit? What is your business outlook post March 2019?

NW: The main crux at the moment is the uncertainty. No one knows – is there going to be a deal, or is there not going to be a deal. The uncertainty is a pain, so there isn’t a lot of planning we can do. But outside of Europe, all the international markets we are expanding in, are irrelevant to Brexit, so in that respect I feel we are a little bit protected. A lot of our growth potential is unaffected. And in a way, if we’re no longer part of the EU, then hopefully the UK government will be able to make a lot of good trade deals with other countries, which should make life easier for us. But it depends on what happens. Obviously, if there is a hard, nasty, no deal Brexit, then we’ve got the problem of anything that we bring in from Europe will have tariffs thrown on, and what kind of tariffs – no one knows. At the end of the day, we are a business, we will do whatever we have to do to not only survive, but thrive. We will adapt. But I’ll be glad when it’s all done and dusted and we can all move on.

Photos courtesy of the brand