17 minute read
Vivense / 14 Lebus Upholstery / 16 Fibreline
WE STRONGLY BELIEVE IN CONNECTING WITH OUR AUDIENCE, AND WE ARE NOT AFRAID OF GOING THE EXTRA MILE FOR THEM
TURKISH DELIGHT
In June, fueled by a $130m investment, mid-level designer furniture and homewares retailer Vivense opened its UK flagship store – on Borough High Street, Southwark. Already operating through 82 showrooms in Turkey, the Istanbul-based business, founded in 2013 as an online pureplay, is plotting rapid UK and European expansion, reveals the MD of Vivense London, Claudio Deidda …
www.vivenselondon.com
How did Vivense come about? Vivense is an inspiring story of entrepreneurship and friendship. One of the first experiences of our founder and CEO Kemal was helping a German incubator fund a company to enter the furniture Turkish market.
When the company decided to leave Turkey, Kemal believed it was the right time to follow his entrepreneur calling. He decided to look for investment and started his own venture along with longtime friends – Vivense was founded in 2013, and has been growing ever since.
The name itself comes from the Italian ‘vivente’, which means lively – it was picked for its positive energy and international suitability.
Where does the brand sit in the contemporary interiors marketplace? Vivense can be identified as a mid-range brand in terms of pricing, although we believe the quality of our products is slightly superior to what we identify to be our direct competition. Our offer sits in between the variety of choice you might find in a marketplace, and the more curated art direction you might find in a classic retailer.
We want our products to be accessible and tasteful, while also offering enough choice to suit a wider range of customer preferences.
What enabled Vivense to gain such a strong foothold in Turkey? Turkey has a strong tradition at manufacturing furniture. Over the past eight years, we built relationships and partnerships with a large number of manufacturers, which enabled us to offer customers enough choice for them to consider Vivense a one-stop shop for their household.
Claudio Deidda
Why and how did you approach the UK market? The UK is one of the biggest markets in Europe, hence a benchmark for any company willing to grow internationally. We see the UK as a challenge and as an opportunity.
Vivense started as an ecommerce business before adding the showrooms to support the omnichannel experience – we see a very strong affinity between our business proposition and the UK audience.
What was the biggest challenge of taking your brand international? I believe for any international brand the challenge is about deploying locally a strategy that has been, very likely, planned globally. Our target is to meet the specific needs of customers locally while keeping the right consistency at a global level. Customer experience, product selection, messaging, logistics … all these elements might have different requirements according to different tastes, cultures etc – but finding that right balance is what makes companies successful internationally.
For us, having a history of success already means this process will also be about cherrypicking the right excellences to scale fast and quickly assess what needs to be changed in each local market.
Tell us more about the London store – what sets it apart? We sometimes refer to our first London showroom, in Borough, as a ‘museum’. The space was designed to showcase not only our most representative products, but also our brand values themselves. We only have a limited number of roomsets, but they represent what we call “a good life with Vivense” – spaces that not only look nice and tasteful, but are equally welcoming and functional.
The next showroom opening will be in Richmond. It will be different in style and size, developed over two floors and with a more pronounced retail accent to better accommodate the requirements of the footfall from the area. Still, there will be common elements with our Borough style guides – the showrooms will look like siblings, but not twins.
Give us an idea of the breadth of product you offer … One of the strongest points of Vivense has historically been our catalogue. We want to leverage this strength in the UK too, offering a wide choice of products
ranging from furniture to accessories, through lighting, rugs and outdoors.
We are planning for about 100 categories to be live on the website – in the next 12 months we plan to have 50,000 items available for sale, before growing from there. Our category management team is thoroughly assessing the most suitable collections for the market, with an eye on also developing some dedicated ranges for the UK.
Is your product primarily made in Turkey? If so, what are the benefits? At the moment, the vast majority of our suppliers are based in Turkey, as it was our first market and is still our biggest. The choice of using the same suppliers for international expansion comes from our confidence in their capacity to manufacture at large scale while maintaining quality.
We have built our relationships for over eight years now, and it is very important for us to work with partners we can trust, so that our customers can trust us. Today, we have around 1000 suppliers, and we are aiming to double that number over the next few years. The initial response in the UK seems to suggest we have made the right choice.
Was the transition from ecommerce to physical retail a difficult one? Rather than a transition, at Vivense we see physical retail as part of the same omnichannel journey. For some items, a pureplay online proposition might not be the most desired experience – as much as we all love ecommerce, the feeling, touching and smelling cannot happen through a website or an app (yet!). For this reason, our choice is to offer our customers the chance of a more sensorial option should it make them more comfortable with our products and brand.
How does having a physical presence lift your brand above its competitors? It’s all about the customers. In London we are now offering a free interior design service, combining our expertise in home living with helping our clients choose the most suitable products for their space. We strongly believe in connecting with our audience, and we are not afraid of going – quite literally – the extra mile for them.
What attracts consumers to Vivense, and what does your typical customer look like? In a nutshell, the fact our products are accessible, tasteful and functional. We realised some of our bestsellers seemed to have been tailored around the typical London house. As a result, our typical customer ranges from the young professional looking for a fresh, modern style for their flat, to the interior designer falling in love with some of our collections. However, we’ve also had quite a few customers asking our interior designers for bigger house restyling.
Can you outline your ambitions for the UK? Our ambition is for the UK to become one of the strongest market for Vivense. We have allocated a significant budget to make it happen, and we are looking for specific investment as we speak. Furthermore, with Vivense transitioning to a global company, we are planning to make London our European headquarters in the coming months. We believe the UK will become our flagship market shortly after.
How do you plan to market your activities here? Growth will be our main objective for the next few years, so our activities will be aimed at reaching as many potential customers, and introducing ourselves. At the same time, by being new to the market, we are aware a strong brand awareness exercise will be required for us to better connect with our audience and earn their trust.
How is the brand set to grow in Turkey and elsewhere, and will your international experiences inform what you do in the UK? In Turkey, we’ve reached a stage where Vivense is looking at more mainstream, offline advertisement, as our online visibility has almost plateaued in the past few months. While it is a nice problem to have, it is also a challenge we are all very excited about.
In general, having already been successful in the past is a great advantage when entering a new market. We can leverage the positive experiences, and learn from the negatives. At the same time, it will be important to have the reasons behind our previous achievements clear in our minds, assess if the same conditions apply elsewhere, and be ready to embrace the challenges new markets (always) put in front of us
THE SECRET OF MY SUCCESSION
When the day-to-day workload is allconsuming, it’s understandable that some fail to consider long-term staffing strategies until it’s too late – but for British sofa supremo Lebus Upholstery, the answer came at just the right time. Paul Farley discovers why MD Karl Walker believes his business is now in “the best shape ever” …
www.lebus.co.uk
In 2018, Lebus’ managers were approached by an outside party interested in acquiring the business. “Being so busy at the coalface, we hadn’t even considered selling up before that,” recalls Karl Walker. “As it turned out, the offer just didn’t sit comfortably with us, so we walked away.”
More out of curiosity than anything else, Lebus kept in touch with accounts advisor Grant Thornton in the months that followed, and was duly informed of interests from a number of parties, both venture capitalists and trade buyers. Might Karl and his colleagues consider an amalgamation, or even an outright trade sale?
Again, the answer was a resounding ‘no’. “We associate private equity with short-term burn and debt,” says Karl. “Having come out of the Christie Tyler debacle in the early 2000s, we were
all a bit scarred … it would have been easy to take the private equity route, but it probably would’ve seen the assets stripped out of the business, and it relocating it away from the Scunthorpe area.
“We didn’t want to disrupt the day-to-day running of the business, or disappear into the sunset and play golf! Yes, a sale would’ve been far more beneficial for the shareholders, but I don’t think any party could guarantee maintaining volumes or minimising impact.
“It can be easy to get blase about numbers and figures on paper, but seeing a full car park each morning, knowing there’s more than 500 people on site, you have to acknowledge your responsibilities. There’s a moral obligation to the local community.”
Yet a change was necessary. Having grown from a £15m-turnover business in 2005 to £55m, significant potential remained – but, like much of the industry, Lebus’ chiefs were, to a man, all approaching retirement age. Who would take charge once they were gone?
“In truth, none of us had seriously looked at succession,” Karl admits. “It’s the smallest, tightest board I’ve ever been involved in, and a very successful business – but we’d shied away from developing a clear, long-term strategy. And all the suitors we spoke to had a complete lack of understanding when it came to the upholstery sector.”
Coupled with these reservations was a mounting recruitment crisis, accelerated by Brexit yet fundamentally driven by a lack of new blood entering the industry. “It was evident that recruitment and labour retention was going to be a serious challenge,” says Karl. “We’d already implemented our apprenticeship academy and looked locally – and aggressively – to train the next generation of workers rather than relying on skilled EU labour, which was diminishing rapidly.”
Then Covid struck, and any talk of sales or amalgamations ceased. The global situation changed rapidly, and national manufacturers suddenly had an edge over their international rivals. For Lebus, trading proved strong despite the nation being in lockdown, reaching levels of 50-60% and proving that the brand worked online as well as in-store. “Then it went stratospheric,” says Karl.
Throughout all this upheaval and pressure, a different path came steadily into focus. Promoted by the UK Government since 2012, the Employee Owned Trust (EOT) model indirectly confers ownership of a business upon its employees. As well as offering a long-term framework which supports growth and staff retention, EOTs mean tax breaks and employee bonuses. Not dissimilar in principle to the John Lewis Partnership, and a direction taken by retailer Richer Sounds in 2019 (“I admire Julian Richer a lot,” adds Karl), it seemed the obvious solution.
“Timing is everything,” says Karl. “When we’d first explored the EOT route, container costs were £3000, and there was ample Eastern European labour – but, thanks to Covid-19, the supply chain was coming closer to home. The potential for growth was huge, but staffing was critical if we were going to stand a chance of managing the additional capacity and volumes, given the perfect storm raging around us.
In July, Lebus’ shareholders took the decision to sell 100% of their shareholding to their employees, the board members all remaining in situ and “fully committed to the business”. Karl described the EOT as “the perfect compromise”, ensuring “the continuity and integrity of the business, while fully engaging a committed workforce in the knowledge that they will all share in the future success of the company”.
A few months down the line, and some of the benefits are already coming to light.
“The new approach has already proved itself in operations, which are working so well – HR, compliance and factory management are now seeing the benefits of this approach,” Karl explains. “It’s allowed us to get our key managers involved with onward strategy, while developing a sensible exit plan for the key operators – all while maintaining the business’ existing DNA, and providing bonuses for everyone.
“We’ve already witnessed a far higher level of colleague buy-in, with productivity going up, and younger staff engaging more closely with us, knowing they have a long-term future and eager to make a difference themselves – you can feel the connection.”
Recruitment remains a challenge. Having hired 70 new members of staff already this year, Karl would like to see capacity bolstered by a further 20-25%, eyeing “double-digit growth” if executed effectively. But although the local competition for labour is fierce (Next, DFS and Wren all have manufacturing facilities nearby), Karl believes that the lure of the EOT could prove attractive.
“It’s already had a positive influence on attracting new members of senior management,” he says. “Once it starts to wash through to the factory floor, hopefully we’ll really see the benefits.”
For now, though, Karl is simply looking to make the biggest possible impact at 2022’s January Furniture Show. “In the short to medium term, there’ll be no changes at all,” says Karl, now no longer a 25% shareholder, but an employee of the trust.
He says it’s “business as usual” at Lebus. Yet it rather appears that the decision to entrust employees with company ownership, rather than just chasing the money, is far from it
Ashley
Pasha
MORE THAN A FILLING
Founded in 1982, Yorkshire’s Fibreline is now the UK’s largest independently owned upholstery cushion fillings manufacturer, best known for its Encore line of fibre, feather and foam fillings. This month, MD Richard Prudhoe tells Furniture News why manufacturers need to have all their ducks in a row right now …
www.fibreline-ltd.co.uk
FOR MONEY
Richard Prudhoe
What significant developments have there been at Fibreline over the past 18 months? The last 18 months have been challenging on so many fronts that we’ve had to develop and adapt our products and processes in many ways. I think, though, that our continued focus on investing in technological advances, at the same time as investing in our people’s skills, continues to be our focus.
The introduction of degree apprentices to the business reflects this commitment. We now have four degree apprentices within the business, and we plan to take on two each year going forward. Bringing new blood into the industry is essential if it is to develop and survive in the years to come.
How have the supply chain issues affecting the industry impacted Fibreline? The supply chain has been, quite simply, horrendous. The foam shortages 18 months ago started the process off, and things have not recovered since. Our current challenge, as for many, is the issues around the container shipping of key raw materials. For us, that is causing problems, both in availability and the cost of feather and polyester fibre. We do not see this improving until well into next year – and now we are seeing huge hikes in the price of raw feather, as the Chinese reduce their consumption of duck and move to pork. Honestly, you could not write it!
How have manufacturer demands changed? We have seen a steady increase in demand for our combination range of Encore fillings. Price is always important, but people are now realising that ‘low price’ does not mean value for money. We are therefore seeing customers wanting higher-value-added fillings that provide comfort but also great performance over time.
How has your eco-friendly FibreFill Blue filling been received by the industry? We are starting to see an increasing conversation around sustainability and recycling. For us, that is not really a new story. We installed solar panels on the factory five years ago, and have offered fibre made from plastic bottles since the day we started in 1982 (and over 95% of our waste from production goes for recycling).
FibreFill Blue is made from GRScertified recycled polyester fibre. It has been well received by those customers who are now also focusing on the sustainability of the furniture they make.
How are the characteristics/benefits of your products conveyed to the consumer? The characteristics of our basic range of fibre, feather and foam fillings are pretty well understood by our customers. We are reliant on retailers explaining the benefits of the combination Encore fillings. These are FIRA Gold-certified products, and we offer supporting sales literature for those retailers that would like to make use of them.
What are you working on right now? We have several continuous improvement projects on the go all the time in the business. And yes, we are working on new products, too. But right now, I am trying to decide between getting my HGV licence or breeding ducks – I’m not sure which will result in the better supply of the feathers that we need in 2022 …
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Dave Atwell, Furniture Technologist | Marks & Spencer
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