How Kat Maconie used invoice finance to keep up with demand
Block heels, strong prints, metallic hardware and graphic silhouettes. These signature details have become synonymous with Kat Maconie, a designer whose brand is pushing the boundaries of footwear.
Who is Kat Maconie?
For Kat, playing dress-up as a child with her mother’s 70s costume jewellery and brightly coloured pumps inspired a dream to design extraordinary shoes. By the time she was 25, she had turned that dream into a reality.
Kat studied at the London College of Fashion and spent her early career working as a buyer for several UK fashion houses. After two years at Whistles, she started to get restless. “I was frustrated with the monotony of working in a corporate environment,” Kat recalls. “I wanted to do something different, that would reignite my passion and excitement for the industry.” So she left to work on her own designs.
In 2009, Kat launched her business with a vision of creating designer shoes that would have both wow-factor and wearability. By 2013, Drapers had named her Shoe Designer of Year – an award she won again in 2018. It all started with a small range of ballerina pumps, expanding into a high-end footwear brand stocked by more than 280 luxury stores worldwide.
Kat Maconie's success
Kat Maconie has achieved huge commercial success in the UK and USA with the biggest demand coming from the Middle East and Asia. Almost 90% of the company’s business now comes from export markets. ”We once sold $1m worth of shoes in an hour on a luxury South Korean home shopping channel,” comments Kat. “Callers waited on hold for 90 minutes to place their order, which really shows how receptive the South Korean market has been to our designs”.
Her experience as a buyer means that Kat is not only a creative designer but also business-minded with a deep understanding of the nuances of supply and demand. The growth of the business was rapidly accelerated in 2015 through Kat’s decision to outsource manufacturing to China.
With growth came cash flow gaps
In 2016, with manufacturing now outsourced and the bulk of their products being exported abroad, the length of their supply chain created gaps in working capital. The factories in China can take a deposit of up to 30% prior to manufacturing an order. From that point, it takes several months of shipping and distribution before the business finally gets paid.
Kat needed funding to bridge this working capital gap. Her first step was to approach her bank for an overdraft but the business was rejected as unprofitable. She then went to an alternative lender but was met with the same response.
How Kriya helped with cash flow struggles
Shortly after, Kat came across a Kriya customer story that featured a fashion entrepreneur with similar challenges. “That was my first introduction to Kriya and it was comforting to know that they’d helped a retail business similar to mine before. So I decided to give them a call”, Kat explains. “Imagine my surprise when it was the CEO who answered the phone!”
Fast forward to 2018 and we’ve been working with Kat Maconie with for over 2 years. Our solutions unlock funds to cover upfront manufacturing costs and help get the business from one end of the supply chain to the other. Turnover has doubled every year for the past 3 years and is on track to do the same in 2018.
“From that first phone call, the service from Kriya has always been great,” adds Kat. “It really helps being able to phone and speak to real people like Alex and Marina. I know them and they know my business, which makes everything quick and easy”.
There’s no slowing down for Kat as the business looks to increase their reach in the USA, Middle East and Asia. Following success in South Korea, the brand has also forged an exciting partnership with a local cosmetics company. Together, they’ll launch a new makeup line that incorporates bold colours and other signature details from Kat Maconie’s boundary-pushing designs.
“We expect our B2B revenues to double as a result of providing Kriya’s flexible payment terms to our trade and business buyers.”
Stuart Zissman, Head of Financial Services
Halfords is the UK’s leading provider of motoring and cycling services and products. Its customers shop across over 1,750 fixed and mobile locations including, Halfords stores and garages, as well as its website, halfords.com.
Today, around a quarter of Halfords turnover is business-to-business. They sell to organisations of all sizes including SME businesses, garages, and workshops, offering discounts on automotive parts and tools with their Trade Card, as well as directly to larger commercial and government customers that buy in bulk.
However, like many well-established enterprises, Halfords found its future growth was challenged by the legacy processes of its past. Find out how they’ve teamed up with Kriya to remove the friction from their B2B commerce.
Halford's challenges
“The exam question” says Halfords’ Head of Financial Services, Stuart Zissman, “was how do we make selling to business and trade buyers less labour-intensive?” Having already overseen a successful consumer finance proposition at Halfords, it was clear to Zissman that their B2B offering had potential to grow by introducing a simple and effective credit solution.
1. B2B buyers expect payments terms
“All successful B2B propositions have some sort of financial support” Zissman explains. Whether large or small, Halfords’ business buyers want to be invoiced on payment terms. This is especially beneficial for garages and workshops, which thrive on efficient working capital cycles, allowing them to source parts upfront and defer payment until they have received compensation for their services.
Halfords recognised the opportunity to enhance their offerings by providing scalable trade credit, which was previously untapped. As Zissman says, "offering payments completes the circle."
2. Manual, unscalable processes were holding back growth
Halfords' hands-on approach to B2B processes presented an opportunity for greater scalability and growth. Wholesale orders, managed via account managers, involved manual quotes and purchase orders, which added complexity.
“We’d like to say yes to every single customer that wants to order from us,” says Head of Trade Card, Chris Millan. However, processing these detailed orders for existing buyers took time, limiting the retailer's ability to proactively attract new business and expand their account base.
What Halfords sought was a way to make their B2B offering more accessible and achieve a better economy of scale.
“We work with sole traders, business customers and government entities. Kriya is the only supplier that could support all three.”
Chris Millan, Head of Trade Card
The search for a solution
Recognising the need for change, Halfords set out to find a way to modernise its B2B offering. With Kriya's 12-year track record and willingness to collaborate on a solution for their unique requirements struck a chord with Halfords.
A solution for all B2B buyers
Halfords has a diverse buyer base and needed B2B payment terms that could be offered to limited companies, government entities and sole traders.
Multichannel
With trade customers already purchasing online and in-store, Halfords needed a solution to offer payment terms holistically across their sales channels.
Risk expertise
With their focus on Motoring and Cycling, Halfords sought a partner with strong expertise in finance and payments, including robust credit and fraud detection capabilities, to help onboard their buyers.
“We are experts in motoring and cycling, and to ensure exceptional service for our customers, we decided to partner with Kriya, specialists in B2B payments and lending decisions.” Stuart Zissman, Head of Financial Services
The B2B vision
Halfords partnered with Kriya to transform their B2B offering. By integrating Kriya PayLater with their Trade Card, the retailer is combining trade discounts for B2B buyers with the ability to pay on account for online and in-store orders.
Adopting an eCommerce-first model has a number of advantages. Firstly, providing online buyers with highly-demanded payment terms expands the businesses they can sell to. Secondly, much of their offline business can be shifted to a self-serve, online checkout. Not only does this provide a smoother buyer experience, it also frees up the Halfords team to focus on the customers where their expertise has the most impact.
The near-infinite scalability of the Kriya solution means Halfords can not only improve their overall B2B customer proposition and experience, but they can also see financial benefits through the partnership too.
“Offering trade credit through payments makes it much slicker. It’s something buyers are familiar with from the consumer world.”Chris Millan, Head of Trade Card
Wholesale change
Halfords have kicked off their payments transformation with their wholesale offering.
Business buyers come to the Halfords wholesale team to place bulk orders and request custom details, such as branded bikes and accessories. Before Kriya, this fully offline sales channel required multiple teams and processes to transact each order. This process led to delays and hampered conversion, such as inventory becoming unavailable during the order, or customers purchasing elsewhere.
By streamlining the entire wholesale workflow into Kriya Merchant Portal, Halfords now have a single, automated flow for processing orders.
Wholesale buyers are first onboarded into Merchant Portal. This screens for credit and fraud risk, directly providing their sales team an instant spending limit decision for the buyer. Orders can then be placed on payment terms and invoices are automatically generated for the buyer. Additionally, Kriya assists with credit control by managing payment collections too.
“We needed a way forward that was less hands-on because the whole process was very, very manual.” Chris Millan, Head of Trade Card
How it works
The buyer places a wholesale order with Halfords
Halfords onboard the buyer into Kriya’s Merchant Portal
Payment terms selected and purchase complete. The buyer pays at the end of the following month.
Partnering for growth
Reflecting on the journey so far with Kriya, Zissman says “It’s that personal touch and relationship that makes the difference to the product we’re building together.” For Zissman, it's not simply outsourcing the expertise to a third party. “It’s more like we’re onboarding Kriya into Halfords and by extension they’ve become part of our team”.
There’s a busy roadmap ahead for Halfords and Kriya, with plans to bring the whole multichannel offering to market by the autumn of 2024.
We're very excited about this development,” says Millan. “Introducing payment terms to our Trade offering eliminates barriers that previously slowed us down and unlocks opportunities with a vast number of businesses we haven't historically engaged with.”
