The owners of Drapers’ International Footwear Business of the Year 2019, Cornish brand Celtic & Co – Kath and Nick Whitworth – are striding into new territory.
A short walk away from the beaches and hills of Newquay, Cornwall, is sheepskin clothing and footwear brand Celtic & Co’s head office. Nestled in the back streets of this Cornish surfing haven lie the family business’s factory, warehouse, office space and shop, all in one unit.
“The brand is based on what you could wear around here,” says Nick Whitworth, who co-owns the business with his wife, Kath. “It’s that perception of a beautiful lifestyle that you dream of going on holiday to every year.”
This lifestyle approach is paying off. The company reported turnover of £8.8m for the year to 31 January 2019 – up 10% on the previous year – and net profit of £652,000.
Around 40% of sales come from footwear, including sheepskin and leather products. The remaining 60% is own-brand clothing – such as knitwear, skirts and trousers, and lighter outerwear – and accessories, which were added in 2008. Sheepskin shoes account for about 30% of total sales alone, and the Sheepskin Bootee slipper is “by far” the bestseller, says Nick.
Next month, the brand will add 1,100 sq ft of office space to its existing 18,500 sq ft headquarters when it expands into a former surf shop across the road. More staff will be recruited over the next three years.
The winner of International Footwear Business of the Year at Drapers Footwear Awards 2019 is Cornish through and through, says Nick: “We’re very casual, even though it’s expensive clothing and footwear. Cornwall is where everyone wants to go on holiday – it’s like an escape.”
The business is split 90% retail through catalogues and its own website, and 10% wholesale. Wholesale prices range from £5 for a children’s sheepskin insole, to £625 for a women’s sheepskin coat, with a 2.4 mark-up for retail.
It has 50 independent stockists, including Templeton Jones in Shrewsbury and L’Image in Devon. Celtic & Co’s coats are also available on rental marketplace My Wardrobe HQ. The Whitworths are not keen to work with department stores, as they believe it would put too much pressure on margins.
The brand’s sheepskin shoes make up 95% of total production in the Newquay factory, Nick says, the rest being accessories. He adds: “All sheepskin footwear is made in Cornwall apart from moccasins, which are made in Somerset [by Glastonbury manufacturer Dane Crafts]. It is moving to Newquay, but the time is not set yet. We have the machines, but our staff need to be reskilled.”
Clothing is made primarily in the UK by suppliers, while 25% is manufactured abroad – mainly in Portugal, but also in Romania and Lithuania. Sheepskins are tanned in Turkey, as the Whitworths say they could not find suitable tanners in the UK.
Celtic & Co may be close to Land’s End, but the owners have dreams of reaching Germany, Japan, Russia, France, China and Korea, through both online and wholesale in the next three years.
Our biggest opportunity is international because we haven’t even got near 0.1% of the world
Currently, the website is all in English apart from the checkout page, which appears in the visitor’s local currency and language. The website will be fully translated into five languages over the next three years, and a full catalogue will be distributed in Germany for the first time for autumn 20.
Around 10% of sales are international, mostly to the US, Australia and Canada, and the brand is seeking for an international agent to find the right stockists outside the UK.
Drapers Footwear Awards judges praised Celtic & Co for building a strong international presence and equally impressive numbers, but the Whitworths are looking for more.
“Our biggest opportunity is international because we haven’t even got near 0.1% of the world from a saturation point of view,” says Kath. “There is a huge opportunity there, but there is the challenge of how do you market. It’s about finding the right partners who believe in what we’re doing, and who have the space for sheepskin jumpers, coats and footwear.”
At home, Nick hopes that Brexit might increase domestic sales, and Kath adds: “I’d like to think people would start to feel proud to be British again. You pay less for local product in other countries – here you pay more. We’ve got to get back to being proud.”
This sense of pride also extends to sustainability. Kath says Celtic & Co has always used natural fibres, and manufactures in the UK as far as possible to reduce its carbon footprint. It has also been working to make its packaging more sustainable.
“We have very little waste and we don’t put any plastic rubbish into our stuff,” says Nick. “Everything [we throw away] rots down – no microfibres, no nasty gases. This is what we’ve always done.”
“Always” means the 30 years since the Whitworths bought the business in August 1990 for £15,000. Formerly in sales and an Air Force engineer respectively, Kath and Nick were looking for self-employment when they saw a newspaper advert selling a Cornish shoe company, Hide & Feet. It comprised a converted garage with “floppy doors”, one telephone, seven pairs of boots, a couple of sewing machines and a “shed of rubbish”. The business manufactured and sold uggs – the generic Australian word for sheepskin boots. They renamed it the Original Ugg Company and taught themselves how to sew. From there they built the business, making and selling shoes directly to locals and wholesale through a couple of surf shops in the area.
The real period of growth came when they started doing mail order in 1992, via the Innovations catalogue. However, they opted in 1996 to set up their own database and catalogue so they could feature more of their products and sell direct to consumer.
In 2006, they moved out of the original garage to its current premises. This was made possible by selling its UK trademark of “ugg” to Deckers, which owned the American Original Ugg Company, for an undisclosed amount in 1997.
They rebranded to Celtic Sheepskin Company, which was changed again to Celtic & Co in 2013 to reflect the wider range of products being offered.
The growth of the business has not been without its challenges. Private equity firm Piper bought an undisclosed stake in the business in 2010, with a view to keeping the Whitworths on to train the new management before they exited.
“We were more than halfway out,” says Nick, but Piper “didn’t gel with the ethics of the business. They wanted to [move production] to China and India. The customer didn’t take to the new designs and ranges.” The company racked up losses of almost £2m and went into administration.
Kath and Nick bought the business and assets back from the administrators for £60,328 in a pre-pack deal in 2014.
“Over the last five years we’ve turned it back round again,” says Nick. “We’re bigger than we were.”
The business refocused on its core products of knitwear, outerwear and footwear, and refined the marketing strategy by investing in email marketing and digital customer acquisition over direct mail.
I don’t think brochures will ever stop. They’re still a huge driver to the website
“We were very fortunate,” says Kath. “We have a very good relationship with our suppliers and they gave us a lot of time to pay them off. It took time, but we’re still working with them.”
At the time of the pre-pack, they promoted former marketing director Emily Bates to managing director to help with the turnaround, but also made seven of their 52 staff redundant. Today, Celtic & Co employs 65 people, and is a family affair. Kath and Nick’s daughter, Clare, is head of product and wholesale, and around 40% of staff have been with the business for more than five years.
However, a challenge is Celtic & Co’s relatively remote location, as attracting and retaining talent can be difficult, says Kath: “We would never move, but if you were up in a city, it would be so much easier. The bigger we get, the more difficult our location is. Finding skilled staff [is hard], certainly in areas we’re not skilled in, such as international sales.”
Domestically, catalogues are still a big driver of sales. There are five editions a year and a total of 3 million are sent out annually. They also drive online sales, which now make up around 80% of the total.
“I don’t think brochures will ever stop,” says Nick. “They’re still a huge driver to the website.”
More recently, the business has been doing pop-up events at stockists, where they take a wider range of product into stores for a limited time.
Kath says these events have allowed the retailer to showcase its pricier items – which customers might be more hesitant to buy without trying first.
“For somebody to come in and pay £1,500 for a coat is a big purchase, and the shops were really surprised about how many customers were interested in buying coats,” says Kath. She would love to do a pop-up in Selfridges or Liberty somewhere down the line.
Charlotte Shute, owner of Templeton Jones in Shrewsbury, says Celtic clothing is popular with her customers: “In terms of things like the three-quarter length Toscana coat, they are a considered purchase. But people are happy to pay for quality because it will last. The quality is exceptional. It’s nice to support a British company. I really like the message behind their business, and how they work and that’s been well received by our customers, too.”
Nina Gooch, owner of Devon lifestyle independent L’Image, agrees: “It’s local and our customers ask for it when we get low in stock. They seem to love it. It goes from a young age to an older age. It’s got no age barrier on it, really.”
Celtic & Co is targeting 50% growth over the next five years – and may expand into athleisure and loungewear.
“Sportswear is massive, so we would like to try and do more to do with the fit-for-purpose loungewear,” says Kath. “It’s a natural fit but there’s a lot of competition out there. It’s a slow burner.”
With all the adversity the business has battled in its 30 years, it seems the slow and steady approach often does win the race. However, with the retail market more cut-throat than ever, Celtic & Co must retain that ability to overcome challenges, and its focus on quality and customer satisfaction if it is to achieve its global ambitions.