Isle Mill Moves to New Facilities, Concentrates on Export
September 20, 2000
Inveralmond, Perth, (UK) - The Isle Mill, a prominent Scottish weaver and exporter has moved several of its operations from Pitlochry to Perth. "We had been headquartered in a small town (Pitlochry)," said Blair MacNaughton, managing director of the Isle Mill. "Unfortunately, the town didn't have any developmental potential because there was no property available. We were forced to relocate about 25 or 30 miles away in Perth We either had to move to expand or be stuck in a smaller place for the rest of our days."
The Isle Mill, which employs about 60 people, manufactures and wholesales woven furnishing fabrics for the hospitality and interior design sectors, using only natural fibers such as wool and wool blends, cashmere, silk and cotton. Clients include P&O, and the Hilton and Sheraton hotel groups.
The company moved into an existing warehouse onto which it built office space. The 17,000 square foot facilities, which cost about $1.1 overall, will house the operations of four companies, including the Isle Mill, which make up the MacNaughton Holdings Group. The Isle Mill's head office, sales, design, marketing, finance and warehouse operations, as well as production control are now based in the Perth facilities.
Operations director Bill Wheelan said the company's expansion and move will initially create about 10 new jobs.
MacNaughton said the new facilities are part of a 3-phase project. "We have plans for another 6,000 square foot warehouse." He said the third phase - the construction of 20,000 square foot warehouse - was likely to be finished in about three to five years.
Currently, the company is upgrading all its computer and in-house information technology systems, according to MacNaughton.
The group recently invested about $500,000 in new looms from Italy. This machinery, which included Staubli electronic jacquards on Somet weaving machines, is already up and running at The Isle Mill's processing facility in Keith.
"We invested in new winding and weaving equipment to increase our technical and design capabilities," said MacNaughton. "Interestingly, the euro quote the loom manufacturer gave was 14 percent lower then their sterling quote. If you are buying or selling in Europe you have to be dealing in euros."
The company's continuing commitment to growth and renovation has resulted in increased turnover, especially with regards to its export operations.
At the 1999 Export Awards for Smaller Businesses, The Isle Mill was named Scotland's top small exporting company for its export sales, which almost tripled in three years from about $640,000 in 1996-97 to nearly $1.8 million in the 1998-99 financial year, rising from 17 percent to 38 percent of the total annual turnover.
The award, sponsored by British Trade International, was proof that a U.K. textile manufacturer and exporter can overcome the problems of a strong pound.
These export earnings helped push profits from $200,000 to $752,000 over the period, close to a fourfold increase. U.K. sales, meanwhile, grew by a more sedate but still healthy 33 percent.
"Because we manufacture the highest quality fabrics, we are competing in a niche market and our customers are prepared to pay for the best," said MacNaughton.
"But quality in itself is not enough; we also have to be flexible and responsive to what our customers want. Where some manufacturers will not supply fabric in quantities of less than 1,000 meters, we will supply short runs as low as 150 or even 100 meters. It is still profitable because we are at the very top of the market and our margins are higher than the mass producers."
MacNaughton recognizes that exporting is the key to the company's future. "We have a reasonable share of the U.K. market, which will continue to grow. But if our sales figures are going to follow the current trend, we have to export."
He said the company has found ways to avoid being seriously hurt by the strength of the sterling. "At times we have had to reduce our margins, but we now quote in euros or any other local currency and convert when exchange rates suit us."
MacNaughton said the company decided to sacrifice margin in order to protect its market share. Four years ago, he pointed out, the pound was trading at $1.20; it is now about $1.50, a 30 percent increase in value. "Keeping to a DM price, with only small increases to account for rises in the German inflation rate, has allowed us to retain much of our European business. It will be easier to get back our margins if and when the pound depreciates over the next couple of years - as has been predicted - than trying to regain market share."
Much of The Isle Mill's export growth is coming from the buoyant American market, where, MacNaughton said the Scottish firm is beginning to make its mark with wholesalers. "Research showed it would be best not to go in under our own brand but to sell anonymously through a number of different distributors," MacNaughton explained. "We started selling a core range but our reputation has grown with the wholesalers and some are now commissioning their own collections." The company began selling to North America five years ago. "It's an incredible market for us," said MacNaughton. This year, U.S. sales are forecast to exceed $1.6 million.
He also said that the company was considering developing other niche markets, particularly in Japan and Southeast Asia. "I am not sure now is the right time to move, but we are researching opportunities as their economies start to recover, so we will be ready when the time comes.
"And with an exciting new collection to be launched in September, I am quietly bullish about the company's future."
The Isle Mill is part of the Scottish-based MacNaughton Holdings, which has improved turnover from $3.5 million to $4.6 million over the past three years. Group exports now account for around a third of sales, compared with 20 percent in 1996-97.
MacNaughton Holdings
The Isle Mill is part of the Scotland-based MacNaughton Holdings Ltd., which has been manufacturing - not by its current name - since the 1700s. With MacNaughton at the helm, the company is in its seventh generation of family ownership.
MacNaughton Holdings Ltd. consists of four divisions employing approximately 120 people.
The oldest is MacNaughtons of Pitlochry, which was the first business for the McNaughton family 200 years ago.
The Isle Mill Ltd, which is the upholstery weaving company, began in 1962; The House of Edgar Ltd. is a Highland wear company that was begun in 1964.
The newest addition to the group is Whitehill and Wilsons Ltd., which MacNaughton Holdings bought in 1998. "It's a small, 150-year-old company, and it's the last company in in Scotland, which makes paisley shawls," MacNaughton said. "One of the nice things we got when we bought that company was that we got an archive of paisley designs. Our latest launch in September will be very much based on paisley.
"Our group of companies are all kind of niche companies - middle to upper end of the market -all supplying a rather curious product if you like."
The Isle Mill, which employs about 60 people, manufactures and wholesales woven furnishing fabrics for the hospitality and interior design sectors, using only natural fibers such as wool and wool blends, cashmere, silk and cotton. Clients include P&O, and the Hilton and Sheraton hotel groups.
The company moved into an existing warehouse onto which it built office space. The 17,000 square foot facilities, which cost about $1.1 overall, will house the operations of four companies, including the Isle Mill, which make up the MacNaughton Holdings Group. The Isle Mill's head office, sales, design, marketing, finance and warehouse operations, as well as production control are now based in the Perth facilities.
Operations director Bill Wheelan said the company's expansion and move will initially create about 10 new jobs.
MacNaughton said the new facilities are part of a 3-phase project. "We have plans for another 6,000 square foot warehouse." He said the third phase - the construction of 20,000 square foot warehouse - was likely to be finished in about three to five years.
Currently, the company is upgrading all its computer and in-house information technology systems, according to MacNaughton.
The group recently invested about $500,000 in new looms from Italy. This machinery, which included Staubli electronic jacquards on Somet weaving machines, is already up and running at The Isle Mill's processing facility in Keith.
"We invested in new winding and weaving equipment to increase our technical and design capabilities," said MacNaughton. "Interestingly, the euro quote the loom manufacturer gave was 14 percent lower then their sterling quote. If you are buying or selling in Europe you have to be dealing in euros."
The company's continuing commitment to growth and renovation has resulted in increased turnover, especially with regards to its export operations.
At the 1999 Export Awards for Smaller Businesses, The Isle Mill was named Scotland's top small exporting company for its export sales, which almost tripled in three years from about $640,000 in 1996-97 to nearly $1.8 million in the 1998-99 financial year, rising from 17 percent to 38 percent of the total annual turnover.
The award, sponsored by British Trade International, was proof that a U.K. textile manufacturer and exporter can overcome the problems of a strong pound.
These export earnings helped push profits from $200,000 to $752,000 over the period, close to a fourfold increase. U.K. sales, meanwhile, grew by a more sedate but still healthy 33 percent.
"Because we manufacture the highest quality fabrics, we are competing in a niche market and our customers are prepared to pay for the best," said MacNaughton.
"But quality in itself is not enough; we also have to be flexible and responsive to what our customers want. Where some manufacturers will not supply fabric in quantities of less than 1,000 meters, we will supply short runs as low as 150 or even 100 meters. It is still profitable because we are at the very top of the market and our margins are higher than the mass producers."
MacNaughton recognizes that exporting is the key to the company's future. "We have a reasonable share of the U.K. market, which will continue to grow. But if our sales figures are going to follow the current trend, we have to export."
He said the company has found ways to avoid being seriously hurt by the strength of the sterling. "At times we have had to reduce our margins, but we now quote in euros or any other local currency and convert when exchange rates suit us."
MacNaughton said the company decided to sacrifice margin in order to protect its market share. Four years ago, he pointed out, the pound was trading at $1.20; it is now about $1.50, a 30 percent increase in value. "Keeping to a DM price, with only small increases to account for rises in the German inflation rate, has allowed us to retain much of our European business. It will be easier to get back our margins if and when the pound depreciates over the next couple of years - as has been predicted - than trying to regain market share."
Much of The Isle Mill's export growth is coming from the buoyant American market, where, MacNaughton said the Scottish firm is beginning to make its mark with wholesalers. "Research showed it would be best not to go in under our own brand but to sell anonymously through a number of different distributors," MacNaughton explained. "We started selling a core range but our reputation has grown with the wholesalers and some are now commissioning their own collections." The company began selling to North America five years ago. "It's an incredible market for us," said MacNaughton. This year, U.S. sales are forecast to exceed $1.6 million.
He also said that the company was considering developing other niche markets, particularly in Japan and Southeast Asia. "I am not sure now is the right time to move, but we are researching opportunities as their economies start to recover, so we will be ready when the time comes.
"And with an exciting new collection to be launched in September, I am quietly bullish about the company's future."
The Isle Mill is part of the Scottish-based MacNaughton Holdings, which has improved turnover from $3.5 million to $4.6 million over the past three years. Group exports now account for around a third of sales, compared with 20 percent in 1996-97.
MacNaughton Holdings
The Isle Mill is part of the Scotland-based MacNaughton Holdings Ltd., which has been manufacturing - not by its current name - since the 1700s. With MacNaughton at the helm, the company is in its seventh generation of family ownership.
MacNaughton Holdings Ltd. consists of four divisions employing approximately 120 people.
The oldest is MacNaughtons of Pitlochry, which was the first business for the McNaughton family 200 years ago.
The Isle Mill Ltd, which is the upholstery weaving company, began in 1962; The House of Edgar Ltd. is a Highland wear company that was begun in 1964.
The newest addition to the group is Whitehill and Wilsons Ltd., which MacNaughton Holdings bought in 1998. "It's a small, 150-year-old company, and it's the last company in in Scotland, which makes paisley shawls," MacNaughton said. "One of the nice things we got when we bought that company was that we got an archive of paisley designs. Our latest launch in September will be very much based on paisley.
"Our group of companies are all kind of niche companies - middle to upper end of the market -all supplying a rather curious product if you like."
