An order from Tesco could trigger the rebirth of Northeast manufacturing, the owners of a Peterlee factory believe.
After just four months in business, Northeast manufacturer AMA Group scored big, securing a lucrative deal from one of the UK’s leading fashion retailers, Tesco’s F&F. On the back of this, it is now pursuing plans to revive the region’s clothing heritage and capitalise on the groundswell of support for British-made garments.
Joint managing directors Julie Price and Paul Watts founded AMA (the Apparel Manufacturing Academy), with three other directors - Price’s husband David, son Steven Price and Steven Lawson - in March. Their 46,000 sq ft factory in Peterlee, County Durham opened the following month in a former call centre. It has been an instant success. Alongside Tesco’s order last month for 48,000 vests and pocketed T-shirts for F&F, contracts have also been agreed with, among others, activewear brand No Jiggle to create leggings, bras and sports tops, Orion Sportswear to make school sports pieces, childrenswear supplier Smith & Brooks to produce leggings, and Newcastle-based etailer Pink Boutique for a jersey range.
AMA forecast £1m turnover in its first year, but following these early triumphs the figure is expected “to be substantially greater” at around £1.5m.
And Price and Watts are not stopping there. The duo are eager to grow the business by opening more factories, supporting the local community by providing long-term, skilled jobs, and want to educate the industry about the benefits of UK manufacturing.
The directors first met while working together in the 1980s at Claremont Garments, a clothing manufacturer that had multiple factories in the Northeast and supplied Marks & Spencer among others. They worked across different elements of the business, including technical divisions, purchasing and HR, but all went their separate ways in the 1990s.
They were only reunited after Julie and David Price decided to retire in 2010. Their retirement didn’t last long - three months later they were working up a business plan for AMA Group, and seeking to rouse their former team. Price, a self-confessed workaholic, says: “We tried retirement, but once the industry is in your blood, it’s truly in your blood, so we had to get back on the treadmill. We felt the industry was looking to bring garment manufacturing closer to home rather than focusing on Asia. Things are becoming more difficult to deal with out in Asia, with more inflexible costs, and there was a lot of bad press about aspects of offshore sourcing, so we felt the time was right.”
With British manufacturing having been in the doldrums for the past two decades, securing a skilled workforce was a priority. “There is a general skills gap in the industry as retailers have been going offshore for work, so there has been no training in that period in the disciplines needed,” Watts explains.
“We chose Peterlee for the factory because the area in the past had more than 6,000 people employed in garment manufacturing, so there was a ready-made workforce but high unemployment. With so many experienced machinists in the past we felt a lot would still be of working age.”
AMA ran an open morning in April to hire the first 24 machinists, and more than 100 people turned up. Of the 24 chosen, 22 had been long-term unemployed.
Following the F&F deal, AMA is looking to recruit six people each month and ultimately, Watts says, the factory has capacity for about 200 people.
But the company is not just focused on the older generation who already possess the right skills - it wants to nurture younger talent, as youth unemployment in the area is high. AMA is in talks with fashion training body Skillset to develop a Level 2 NVQ to train people in-house with key machinist skills.
AMA is also planning a commercial academy, offering hands-on experience for retailers’ and suppliers’ existing staff so they can learn about manufacturing processes. Launching in six to eight months, this will comprise tailored courses focused on how different processes impact the cost of manufacturing, and the end value of products.
Price says: “We accept that the industry has given us fantastic careers and we want to give similar opportunities to other people as it seems to be lacking at the moment for the younger generations. We want to make our mark on the industry.”
This focus on reskilling the local workforce and creating employment opportunities is part of what attracted F&F.
Its chief executive Jason Tarry says: “The Northeast has a strong textile manufacturing heritage so we’re really pleased to be working with the AMA Group to help revitalise the industry in the area. Bringing skilled jobs back to the region through this partnership is good for local communities and also means customers will soon be able to buy high-quality British-made clothing at great prices from F&F.”
Price explains the F&F deal - which the factory will start working on next week ready to drop in September - came about after the company contacted Tesco clothing technical director Alan Wragg at the start of the year to seek his opinion on the business plan.
“Tesco has expressed an ongoing partnership with us so that should be quite fruitful,” she says. And the relationship with the supermarket could have a big role to play in the company’s wider expansion plans.
“If they want the capacity for the full factory, it’s an option for them. We are working closely with them on our growth plans,” she adds.
And these plans are extensive. “We don’t believe we will stop at these premises, we anticipate we will take premises in other surrounding towns. If you think about the early 1990s there were six or seven factories in the n-ortheast of England, and we want to build a small portfolio - we want six or seven factories for AMA. We will fill this factory by the end of 2015 and then we want one new factory a year after that.”
But the pair warn these ambitions could be stymied by the lack of support for fashion start-ups, even when they are launched by “dinosaurs of the industry with more than 150 years’ experience”.
“There’s very little opportunity for people to start up in the industry or obtain help. While the government is interested in reshoring manufacturing it’s got to rethink the level of support new companies get in the UK,” says Price.
Despite the potential to create a huge number of jobs, she explains AMA has struggled to secure funding from government schemes because the business has not been running for long enough. The team is in talks with Lord Alliance - chairman of N Brown - about access to his Alliance Textile Growth Fund, after seeking his thoughts on the business.
But the opportunities for AMA remain vast and it is keen to capitalise on the growing consumer demand for British-made product.
“The retail sector has to respond very quickly to fashion and have the right products at the right time,” says Price. “If you are offering reduced lead times against Asian-sourced production it allows retailers to respond more quickly.
“Ultimately, it means people are getting paid in Britain, paying taxes in Britain and are spending in Britain, which will help get the economy going. There’s a huge benefit to retailers so it’s worth paying a slight premium for.”
Andrew Hall, operations manager at Pink Boutique in Newcastle, agrees: “Although we’re just in the early stages of our relationship, there are going to be so many benefits to keeping it British. Sample development, lead times, communication and quality control are going to be much improved.
“We’re also very pleased to be working with a company that is ethically compliant. That’s not always easy to find abroad.”
Hannah Statman, founder of No Jiggle, adds: “I love how passionate, hard-working and knowledgeable about the industry they are. I had the option to get my garments made abroad but it was important for me to get everything made in the UK - I like the fact it’s a quicker turnaround, I can be more hands-on, and the quality is better.”
“All the major retailers are focused on bringing more [manufacturing] back to Britain and that will see a resurgence of manufacturing here,” says Price.
She confidently concludes: “We intend to be at the forefront of this.”