How Whyte & Ivory scales across borders

Lancashire-based company Whyte & Ivory imports materials in bulk, primarily from China and Pakistan, and prints and manufactures curtain linings and fabrics, distributing from the UK since 2010 and across the US from its North Carolina warehouse since 2016.

Exports make up about 70 per cent of its business, split evenly between the US and Europe. Much of the value the company adds for its customers is efficiency of supply, says Peter. “It is a commodity product they could purchase direct, but none of them are using enough to make it worthwhile. It makes sense for them to pay a small margin to someone who can consolidate similar purchases.”

Scaling globally is central to Whyte & Ivory’s business model. “As volume has grown, it has become easier and more economic,” says Peter. “We are a critical-mass business, smaller than most of our customers but in a specific field, we are bigger than they are, and they need our product. This is a cash-hungry business, requiring a lot of stock and careful cash flow management. We must grow the stock to grow the business,” says Peter.

Trade with smaller European customers became uneconomic post-Brexit so Whyte & Ivory decided to focus on larger customers and on the US in particular. Already home to its largest customer, the sheer size of the US market makes it by far the most promising of its export destinations. In the last three years its US Sales have grown 650%. To tap into this potential, the company has built a network of sales agents and a third-party warehouse. “We’ve got about $4m–$5m of business in the US now, and it could be two to three times more than that quite easily,” says Peter. “The opportunities in terms of scale are enormous within the US.”

Its previous banking arrangements were a significant barrier to growth globally. Until recently, Anne and Peter experienced incredible difficulty transferring funds across the Atlantic. “We struggled to send money from the US to the UK,” says Anne. “There was no contact, no support and no banker to help. We could see a situation where the US might grow larger than our UK business and, as our requirements grew, it became unsustainable.”

“We had restrictions in place on how much and how often we could transfer. We had hundreds of thousands of dollars in the US that we could not move fast enough. Our customers were sending cheques to my dad, and he was walking to the bank with his dog depositing them. It was the only way we could deposit the money,” says Anne. Their UK bank could not help. “Because the bank did not have a US presence, they were not interested, and they could not help us fund the US growth,” says Anne.

Whyte & Ivory switched to HSBC UK at the beginning of 2022. They now work with Relationship Manager, Stuart McNaboe, who helps support their day-to-day needs and connects them to colleagues within the US for their local knowledge and support. They can tap into this knowledge for advice on funding and growing their network. Banking with HSBC UK has also made transacting across borders in different currencies much easier and helped prime the business to scale further. “We feel that HSBC UK is a partner for our future growth,” says Anne.

HSBC UK also has put new facilities in place to give Whyte & Ivory the cash facilities it needs to expand. Stuart worked with the business to replace £2.2m of loan notes with term debt and working capital facilities, saving it money. The company now also has £1.5m import finance available. “We have put in a significant working capital facility to allow them to fund the stock,” says Stuart.

These measures are already making a difference, says Anne. “We now have the scope to say yes to customers whereas before, we thought ‘how will we do that?’ That is powerful. Now we have more borrowing facilities if we see opportunities. It’s much more flexible and we have much more headroom to plan for the future.”

“The new arrangement is also enabling the company to add more value for customers who might be considering buying direct”, adds Anne. “We are talking to customers about how we can help them with terms to make it irresistible to them to continue buying from us.”

Our landmark study, ‘Going global for growth’, captured the views of more than 2,100 UK businesses providing a snapshot of their hopes and challenges as they consider expansion in overseas markets.