Graham & Brown’s long-term roll-out strategy

It’s a story that would astonish – and delight – Harold Graham and Henry Brown.

In 1946, the two men started to make wallpaper in Blackburn to satisfy the home decoration market in the post-war housing boom. Today, three of their grandsons still lead the business. Their company now sells its products in 75 countries. It directly employs 30 people in China. It continues to make wallpaper in Blackburn.  And even the room that was their original boardroom survives, transplanted from its original building into part of the current offices.

The story and the heritage of Graham & Brown is at the heart of this two-family-owned company. But so too is its long-term future planning.

Building an international presence

The £80m-turnover, 540 employee, Graham & Brown has been an international business for at least 15 years. Initially, sales were into Europe and North America. Five years ago, says chief executive Andrew Graham, they broadened their horizons.

“People like our story, that we still manufacture in Britain, and they want to buy into British brands,” says Graham.

In China, rather than going through the distributorship route, the company established its own presence. “We are taking a very long-term view,” says Graham. Today, 500 retailers are operating Graham & Brown showrooms across the country. China is the company’s fastest growing market.

In a country where there are more wallpaper manufacturers than anywhere else in the world, you have to stand out. The Chinese consumer, he observes, find the story of this business with a 70 year heritage, its industrial nature and its long-term family-owned outlook particularly appealing.

Elsewhere in the world, the company has gone through distributors. Some of its markets – Libya, Egypt, Russia and neighbouring CIS countries – have been tested by severe civil strife, political upheaval and diplomatic tensions. It doesn’t make wallpaper selling particularly easy.

As a privately-owned business, Graham says, they can take a long-term view.

“It takes a long time to build a new brand overseas. If your horizons are just two or three years, then you cannot ride the waves of uncertainty. There just may be too much volatility. If you think in terms of ten or 15 years, then you can build a business.”

Given the volatile nature of these markets, there is a clear risk of not being paid. Despite all the uncertainties, to date (and with much touching of wood) there has not been a default payment. But payment does come in more slowly than it should.

In Russia, says Graham, “payment is currently taking twice as long so we have to slow down the development of new products. We talk to our distributor on a daily basis because communication is so critical at these times.

“We are taking a view that we will carry on doing business with them and will do everything to support them. Once we have got through this period, we will have built a stronger relationship. It would be easy for us to drop out of the Russian market but we are not going to.”

One reason behind Graham & Brown’s resilient approach is that it obtains credit insurance for these markets with the assistance of UK Export Finance. “We talk to UK Export Finance as much as we talk to our commercial credit insurers,” says Graham. “They are being incredibly supportive and helpful. It is really advantageous; without that support it would be very hard to take this long-term view.” (UK Export Finance put together bespoke cover under its Export Insurance Policy. This covered the company against the risk of not receiving payments for goods. You can read the detailed case study here.)

The Chinese word for crisis, he notes, is composed of two characters that can represent danger and opportunity. A short-term view just sees the crisis but “if you develop a business out of a crisis, it makes you stronger.”

In Libya, for example, where Graham & Brown has been for five years, the revolution and current civil war has tested the strength of the relationship with their distributor. “They hope things will settle down but there is currently little certainty. They have had to retrench. But we had identified them as having a long term view and UK Export Finance has helped us significantly with that particular customer.”

In addition to making its own lines, Graham & Brown collaborates with leading interior designers such as Kelly Hoppen

In addition to making its own lines, Graham & Brown collaborates with leading interior designers such as Kelly Hoppen

Putting political upheaval aside, general market conditions are more dynamic than ever before, says Graham.

“You can’t stand still. If you just do what you have always done, the market will move against you. Right now, the biggest retailer in Australia is buying its wall decorations from us – a company that designs and manufactures in Lancashire.

“That is happening because we have a superior product. But a retailer such as that sources its products globally, so it can buy from many other suppliers. You have to be comfortable living with the opportunities and the risks of operating in a global marketplace, and be able to constantly reinvent your business.”

That said, Graham & Brown looks set to steer a steady course – however choppy the waters.

“My intuition tells me that if 50 per cent of our business today is exports, it will likely be 75 per cent in five years’ time,” says Graham.

“There’s only one European nation in the top 20 by population. Just look at India and China. As a manufacturer and a brand, we have to be in those markets where one-quarter of the world’s population exists. So exports outside of Europe will drive our growth.”