Business Essentials: She's stuck her neck out for Britain, but will patriotism leave growth in knots?

Joanna Marshall has made a mark in handmade ties, but her loyalty to UK suppliers threatens her ability to compete with bigger labels, as Kate Hilpern discovers

If women love shoes, what are men's fashion passion? Joanna Marshall's goal is to make it the tie. Since she started her business, YoYo Textiles, in 1999, Joanna and her team have been producing handmade silk neckties seen in the highest circles. Prince Charles, Tony Blair and David Beckham have all worn Joanna's designs, and her direct rivals include Paul Smith, Richard James and Duchamp.

Besides competing with these big names in terms of design and quality, one of her strongest selling points is her determination to keep production in the UK.

"Once I've designed the tie, the silk is woven in a factory in Suffolk, and the products are assembled in Nottinghamshire - and I intend to keep it that way," she says.

But at a time when competitors are increasingly carrying out at least part of their production process overseas in order to save on overheads, she now has the problem of how to maximise her profits.

Joanna, 28, studied textiles at Nottingham Trent University and started her business at home, largely thanks to a Princes Trust grant and support from Shell LiveWire, a scheme run by the oil giant to encourage young entrepreneurs.

Her modern twist on a very traditional item of menswear has proved pop- ular, and with two new collections each year, her annual turnover has now reached £90,000. She sells to more than 30 independent retailers, as well as to the Beales chain of department stores.

"In the past, my collections were also sold at Selfridges and Harrods," she says. "But they have recently introduced a new policy of taking on only large brands and designers of ties who also produce shirts and suits."

She feels strongly about the "Made in the UK" label sewn on to all of her ties. "I'm committed to using local businesses and workers in order to help the UK economy," she says. "But it is also about quality control. A lot of manufacturing businesses find that when they import, problems follow. If production is carried out relatively close by, you have more control."

And, she adds, the retailers she sells to are becoming increasingly supportive of her stance. "One of the first questions some of them now ask me is: 'Are your ties made in the UK? Customers like it.' "

At around £50 a tie, Joanna's products are carefully marketed at the same price as her major competitors. "But because of my commitment to manufacturing domestically, it means that I take less of a profit than those who produce overseas," she says. "I want to know how to overcome this problem."

She is considering whether to raise her prices and how to promote the selling power of the "Made in the UK" label.

Making her life even more difficult, she claims, is the fact that some rival products appear to be handmade or hand-finished in the UK when they are not. "I have even heard stories of products having been made in the Far East, only to have a 'Made in the UK' label sewn on when they arrive in the UK."

The YoYo website is an important part of Joanna's business, helping to increase brand awareness and serving as a user-friendly way to purchase available stock. But most of her sales still come from her own approaches to retailers and from enquiries from the shops themselves.

www.yoyotextiles.co.uk

WHAT THE EXPERTS SAY

Stephen Pegge, head of external communications, Lloyds TSB Business

"Joanna has laid the foundations for a successful future but even a premium product must control costs. She can do this in partnership with her suppliers, possibly by arranging tenders for contracts, and accepting orders and handling the management of stock online, which would save her and her suppliers time and money. Even small UK manufacturers are increasingly well set up for e-commerce.

"Raising her profile and generating retail customer demand for her products will also help her bargaining position with the trade. Carefully targeted advertising in upmarket magazines, combined with good PR, could support this. Her client list and background can help to form a valuable promotional channel. This will also assist the online aspect of the business, where customers and retailers place orders for new designs directly through a virtual showroom.

"If Joanna can raise her profile, this will ultimately help in meeting the volume requirements of large retailers. It should then be possible to secure dedicated spaces within high-street outlets."

Bryony Whiteley, England director, Shell LiveWire

"Joanna's commitment to a UK brand is certainly one of YoYo's greatest strengths, but it is also a threat to her competitiveness. As with any business, the choice of suppliers is critical, and an annual review of the competitive tendering process will help to ensure she makes the best deal.

"In a specialist field, a longer-term tie-in with a single supplier should also be explored. An alternative may be teaming up with other like-minded manufacturers to increase purchasing power, or with other designers to create a complete offering for outlets such as Harrods.

"Joanna recognises that marketing is the key to building the brand. Judging by the positive response of retailers and customers, the 'Made in the UK' angle might be more aggressively communicated. Consideration should be given to the introduction of a strapline or, for example, an approach similar to that employed by Ben Sherman, whose clothing designs are notable for the recurrent use of the Union Jack."

Rita Clifton, chairman of the brand consultancy Interbrand

"Joanna must look hard at the three main ingredients necessary to create a luxury brand with long-term value, and see if she can up the ante in each area.

"The first is a great 'craft skill' product. Joanna needs to make British craftsmanship a real customer benefit; people don't buy on flag-waving and altruism any more.

"The second area is the brand 'experience', ensuring it is always seen and presented in the right way. Retailers' merchandising of ties tends not to be particularly imaginative, so Joanna needs to find out how she can help here - as well as making more imaginative use of her website to promote the brand.

"Finally, image and associations are critical. It's nice that Beckham and Prince Charles have been wearers, but you need them to be seen to be loving and using your brand - to be evangelists, if possible. The shoe maker Tim Little has had Robbie Williams and Rod Stewart, among others, as fans."