The London Distillery Company and Kriya's invoice finance
CEO and Co-founder Darren Rook had wanted to open his own distillery for some time. With over a decade’s experience working in the drinks industry he realised that London had no whisky of its own, despite such a rich heritage of distilleries dating back centuries, so he started the London Distillery Company to bring craft whisky and gin production back to the heart of the capital.
In 2011 the London Distillery Company became London’s first active whisky distillery since 1903, when it opened its site on the Thames at Battersea, before moving to their current home in Bermondsey.
“Our mission was to make The London Distillery Company the first true craft distilling business in London” says Darren. “There’s so much science and skill behind it, but this had been lost with the growth of the city.”
Having set out with a distinct focus on whisky, the gin production that The London Distillery Company is now famous for was merely a side-project.
“With a product like whisky, you have to sit on it for three years before it’s even legal, so we decided to produce some gin in the meantime.”
Their side-project, Dodd’s Gin, named after Ralph Dodd who attempted to open a distillery in the capital back in 1807, soon became the business’ main revenue driver with Fortnum and Mason selling it alongside their own brand gin, also produced by The London Distillery Company.
“We were selling 200 bottles a week” said Rook, “initially we only planned to produce 180 a month. Fortnum’s wanted more stock, so we had to keep up. We ended up having a great year, and the relationship with Fortnum’s has grown ever since.”
The cash flow challenges
It was at that point the company realised cash flow was going to be a challenge “We looked around at finance companies, but we didn’t want 12 month terms, we wanted a flexible option. Kriya is great for a fast growing company like ours, it means we have that choice.”
In 2015 the company moved premises to Bermondsey, meaning they were out of production for a few months. Once again, cash flow was crucial during this time. Although the company had stock to sell, it needed to realise the cash from orders quickly to keep the operation going over the quieter time. Rook said “Kriya was a real saving grace for us in terms of keeping the business ticking over, and has given us a great base to grow from.”
The company has big plans for 2017. “This year we’re opening a new distillery dedicated to gin production”, explained Rook “it will include a bar and tours, so represents the next phase of the company’s growth.”
“We’re also looking into a more retail-centric model, aiming to start selling through supermarkets rather than just to bars as we currently do, so Kriya will be critical again when we’re dealing with long payment terms.”
The benefits of online finance
The London Distillery company uses online accounting software, Xero, to manage all of its accounts. Xero is one of the many accounting software packages that Kriya integrates with to provide a smooth end-to-end experience.
Darren said: “Our experience of using the integration between Kriya and Xero has been brilliant. We’ve been using Xero for 4-5 years now and Kriya for almost 2 years. Both are intuitive and indispensable tools for us. The integration of Kriya with Xero really saves us time when completing transactions, especially when we’re dealing with bulk invoice uploads.“
“Using online finance tools is critical to our business success”, he continued, “Our company is growing internationally and the ability to access our accounts from all over the world is crucial. It also helps us meet our goals on sustainability, something else that is important to me as a founder, as we have no need to print documents and can see and change information in real-time.”
“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.”
