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Wilson plans to woo independents back with the help of Bob Bettley, a silver-haired gent with 47 years in the industry, who has joined Failsworth as sales director. Bettley is planning visits to independent shopkeepers, but he can see only so many. Before he can do this effectively, Failsworth also has to implement a creditable marketing strategy.
“We should be knocking on doors, rather than waiting for them to come to us. But that’s not happening because we don’t have enough coverage. We need more people out there selling our products,” said Wilson.
He is also trying to recruit sales agents, the main link between producers and retailers. Again, Failsworth’s difficulties in past years have left it with sparse agent coverage in Britain, particularly in southern England. Wilson is negotiating terms with some agents but they need to be given a good reason to promote his hats.
He is also banking on increasing exports, which are expected to grow 5%-10% this year.
Half of Failsworth’s business comes from contracts to produce men’s hats that are then branded by retailers. On the women’s side, there are some big contracts in the pipeline to supply retailers.
But Failsworth faces a dilemma as it tries to grow in these areas because it wants to maintain an image of quality. Some of its best contract customers are distinguished retailers who prefer their traditional hats to be made in England.
Though almost a third of Failsworth’s hats are made in China, these are for volume product lines destined for mainstream retailers. Wilson said he would prefer to make all his hats in England, but the industry has a shortage of skilled machinists.
Working at a sewing machine in a Coronation Street-style factory is an unattractive prospect for today’s school leavers, despite the pride that Britain’s hat machinists, cutters and trimmers take in their trade. Consequently, most of the new machinists Failsworth has employed in recent years have come from acquisitions.
Making a hat in China saves Failsworth only a few pence in cost per item. Although Chinese labour is cheaper, Failsworth’s shipping costs are high for outsourced production because it prefers to use the same materials as it does for its home-made hats. Rivals who have eaten into the British trade, meanwhile, continue to do so with materials sourced locally to their Chinese workshops.
Failsworth’s overseas production is likely to increase as its volume business grows and Wilson explores the use of eastern European workshops, a move that would satisfy his prestigious contract customers.
“ I don’t see us closing down our current facilities,” said Wilson. “We need a fallback in Luton. We also need to be able to manufacture stuff here that we can sell at a higher margin.”
British craftsmen and women will still make the company’s superior hats. In proving he can do this at a profit, Wilson has debunked a myth that has helped to perpetuate the industry’s depression: that the closure of Britain’s workshops is inevitable as millinery moves to cheaper locations overseas.
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