Telling the truth about SME life today

Lessons from a North London retailer who moved overseas

One in five UK SMEs currently trade overseas, compared to one in four in the rest of Europe. If the UK was able to match the European average, it would be able to inject an additional £40bn into the economy, according to government figures.

North London-based fashion retailer LN-CC is one of the emerging British businesses looking to make the most of the opportunities available to companies trading overseas. Using his connections within the global fashion industry, chief executive Fraser Harper sources designs from all over the world to sell through an online store and London outlet.

This business model is a great starting point for international expansion. Following successful links with Japanese, Italian and Danish designers, LN-CC recently began looking at the opportunities that might be available in the Latin American market.

Brazil seemed a natural fit for LN-CC, and the perfect starting point for an expansion drive into South America. Brazil’s fashion industry is currently enjoying a boom period due to the rapidly expanding population of wealthy professionals in the country’s urban centres. 

The growth in Brazilian consumer spending has made the market highly lucrative, increasing from $950bn in 2008 to US$1,455bn in 20111. This growth is also reflected in the country’s GDP, which was growing at a rate of 7.5 per cent in 2010, compared to 2.1 per cent GDP growth in the UK. As the Brazilian economy grows, so does the demand for luxury consumer brands and products, creating a wealth of opportunities for British companies particularly given the slowdown in the luxury goods market at home.

Despite the palpable opportunities, however, entering a unique trading environment like Brazil does pose certain barriers, including stringent international trading regulations which need to be overcome. This can be made easier by tapping into the network of support services now available to businesses looking to extend their reach into new, foreign markets.

LN-CC’s Fraser Harper travelled to Brazil as part of Santander’s Breakthrough programme, to give him the chance to establish key industry and commercial contacts that could help the company navigate the unique business and tax environment of the country. 

LN-CC wanted to use the visit to research local PR and media, with the hope of tapping into the country’s thriving magazine market led by Abril, Brazil’s answer to Cond Nast. Their objective is to successfully establish itself as a force in the high-end fashion retail sector in Brazil and make the most of growing consumer wealth.

Meetings with investors and potential business partners organised through the scheme allowed Fraser to gain first hand insights into the workings of the supply, investment and regulatory markets of Brazil. In order to gain traction with media in Brazil, LN-CC has since hired a consultant with the aim of establishing the LN-CC brand amongst its target audience and established retailers in the sector. This has already produced two partnerships with affiliate companies in mutual deals to promote growth.

The partnerships, deals and contacts that LN-CC has formed have provided the company with a stable company base and profile in the Brazilian marketplace, one of the major stepping stones in developing an overseas trade offering.

Developing international trading links is as profitable for UK businesses as it is for the UK economy. It’s crucial that businesses are educated about the prospects of international trade and provided with the necessary support along the way to make it a reality.

John Williams was appointed as Head of the Breakthrough Programme in January this year, after many years spent in international business in the Middle East, Far East, North America and Europe. In the newly created Breakthrough role, John is responsible for ensuring that Santander’s Breakthrough programme meets the needs of fast-growth SMEs across the UK.



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