03 July 2020

How a garden business came up roses in lockdown

A shift in White Stores’ distribution model paid unexpected dividends – enabling the outdoor furniture firm to weather a crisis.

For the outdoor furniture sector, the spring of 2020 provided a rare opportunity – alongside a tough challenge.

Good weather was coupled with the start of pandemic lockdown in the UK, and households with the benefit of a garden made it their focal point.

However, goods were scarce. China had already experienced its own lockdown, so suppliers dependent on Chinese production faced a delay in acquiring stock to meet demand.

Essex-based White Stores had a head start, thanks to the foresight of Managing Director James Whiteley. Long before the pandemic struck, he had worked to slash the lead time of 12 to 16 weeks between placing an order and receiving goods from China.

You can only achieve that by investing in supplier relationships, rather than looking constantly to new suppliers for the best price.

Stock in hand

“We had made a commercial decision that in order to scale our business, we needed to be able to call upon stock immediately,” James explains.

“In the past, we were trying to run stock out of our own cash flow on a just-in-time basis. But it’s a very reactive sector: we don’t know if it’s going to be a good or bad year until we’re in the middle of the season. If it then takes two to three months for new stock to arrive, the summer has ended and you’ve missed the demand.”

In collaboration with the firm’s Chinese partners, James reached an agreement for extra stock to be warehoused in China. White Stores could then call for this to be shipped immediately if early demand appeared high. The 27-day shipping time allows for stock availability within the season.

The arrangement required mutual trust and a willingness by the manufacturer to shoulder commercial risk: “They have to buy the raw materials and put the goods in stock with no guaranteed ship date,” James says.

“I will guarantee to take the stock at some point, but meantime they have to sit on it with only a gentleman’s agreement. You can only achieve that by investing in supplier relationships, rather than looking constantly to new suppliers for the best price.”

The process was assisted by trade finance from HSBC, which has worked with the growing business for five years. The facility reached £2.8m last year.

“HSBC have been tremendously supportive,” says James. “They come and sit with us twice a year to understand what we’re trying to achieve.”

Pandemic logistics

This work paid off to an unexpected degree when Covid-19 hit.

Like other suppliers, White Stores lost production slots in the Chinese shutdown. But within days of its suppliers reopening, it was able to ship 100 containers of goods with a value of $1.5m. In the interim, the firm was able to fulfil orders with existing stock.

Getting the goods in place was only the first step, however. With the firm’s six showrooms now closed and store staff on furlough, the focus switched to online sales.

Within days of the UK lockdown announcement, the warehouse workforce was split into two shifts to minimise infection risk, using full PPE. As online orders soared, the 20-strong team was boosted by eight extra staff to handle demand.

The customer service team was maintained, spread across the office to allow for social distancing. Both teams benefited from a 10% pay increase as a thank-you and an incentive throughout an exceptionally busy spring and summer.

The business found creative ways to maintain customer service in the pandemic. For instance, staff could still provide a ‘deliver and build’ service if the customer could arrange for them to enter the garden through a side gate.

Record results

The results were spectacular. Before lockdown, White Stores had been forecasting an annual turnover of £18-20m. Now it is set to hit £28m – double last year’s turnover.

“That is on the back of being able to be first on the start line by shipping the stock,” says James. “It’s also testament to the incredible efforts of my staff.”

While the combination of circumstances was unprecedented, James has no intention of marking down 2020 as a rogue year. He plans to build from this success.

“We will be reinvesting profits with a view to taking a larger part of the market share,” he declares. “The garden industry is worth £1bn a year at retail, and we make up 2.8% of that – so I still have 97.2% to go.”

I’ve just employed someone who will be working from home in Bristol, which I’d never have considered before.

Lessons learned

White Stores’ operating model will look somewhat different as a result of Covid-19.

Remote working by the finance, marketing, buying and tech teams has proved to James that his Essex headquarters no longer needs to be a focus: “I’ve just employed someone who will be working from home in Bristol, which I’d never have considered before.”

Investment will be ploughed into a near-doubling of the firm’s UK warehousing capacity, to enhance responsiveness to demand.

And James plans to ensure White Stores’ supply chain is diverse enough to handle any future geopolitical shocks: “I’ll be making trips to places like Vietnam, Indonesia and Malaysia, to start developing relationships so we’re less dependent on one country.”

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