It was the present of a woollen tea cosy that got me thinking.
Vibrantly orange, its label boasted of the long history of the Norwegian wool industry, active since the stone age, and economic significance of the material to the country.
The label also said the tea cosy was “Made in Nepal”. Encapsulated in one woolly commodity was the international nature of a national souvenir.
The tea cosy didn’t need to be made in Norway to leverage the brand equity of the historic wool industry, it just needed to be bought there.
People have been collecting souvenirs, remembrances of their travels, for hundreds, if not thousands of years.
In the beginning, pilgrims brought home holy dirt from holy lands as religious souvenirs and in the 1700s, when the plundering of significant sites had become commonplace, Thomas Jefferson famously sliced a sliver of wood from William Shakespeare’s chair in Stratford-on-Avon.
A century later and the commercialisation of fleecing was well established; “breaking off pieces of Plymouth Rock in Massachusetts was such a common practice that a nearby grocery kept a hammer and chisel on hand for tourists,” Rolf Potts wrote in his 2018 book, Souvenir.
Potts charts the chronology of these tokens of remembrance and their significance to humans, and finds that by the end of the 19th century, cheap mass-market souvenirs had replaced plundered momentos. By the end of the 20th century imported keepsakes had become the norm for a booming global tourism industry,
It is this industry, Robbie Scanlan, the chief executive of Allied Imports, has come to dominate in Ireland and the United Kingdom. Scanlan estimates the business, which was founded in 1973 by his father, controls 40 per cent of all souvenir buying in Ireland and the majority of these souvenirs are manufactured in Shenzhen, China.
For the first few decades of its existence, the business mostly sold twee Irish trinkets, tweedy caps and leprechaun figurines but despite its long history, Scanlan and his business was largely unknown, he’d walk into meetings and be met with unfamiliarity.
It was a problem solved by the acquisition of Tipperary Crystal in 2011.
What Scanlan bought was not a glass-blowing company, but the power of the Tipperary Crystal brand, what it could do for him and how it could increase the company’s international exports.
In the decade since, Tipperary Crystal’s output has inverted dramatically, and a rough estimate by Scanlan puts a quarter of all gifts bought in Ireland in its bucket.
Actual crystal now accounts for only 3 per cent of the company’s sales, the rest is a combination of licensing deals, and “affordable luxury” collections designed in-house.
Tipperary Crystal is aspiring to the model of LMVH, the French luxury goods multinational, an umbrella group with different “houses” or brands across sectors.
“People think I just sit in the bath and think of an idea, it’s not like that. You have to have a process to come up with new ideas, new brands, new products to sell every year,” Scanlan said.
“So that’s a process, as process driven as logistics or warehousing or finances and the sales is a process as well. You have to be selling the product at the right price and to the right people.”
Tipperary now has licensing deals with Orla Kiely, the homewares designer, Graham Knuttel, the artist, Eoin O’Connor, known for his drawings of cows, and the Irish Fairy Door Company.
If you’ve ever been in a Kilkenny design shop or Carraig Donn, you’ll likely have seen one of Scanlan’s pieces.
There are also jewellery and handbag ranges, designed by his wife, Karen, Funky Feet socks and several other ceramics brands that originate from the design team within Allied. It is a gift empire so wide-ranging it successfully covers any occasion necessitating a treat or a gift from cradle to grave.
Growth and diversity
The challenge is to continue to build collections, using the same processes that are already in place, while making the final products appear diverse.
All of these many pieces rest in Scanlan’s cavernous warehouse in Northwest business park in Ballycoolin, a vast expanse of 50,000 square foot, holding 5,000 pallet bays at a time, before being shipped out across Ireland and the UK.
From a well-lit showroom attached to the warehouse, Scanlan explains how the business works across continents, the decision to take on private equity for the first time, expanding into other geographical markets and what he’s looking for in a new brand.
“I haven’t been out to China in two years and normally, I’d be there three times a year,” he said.
“That is a challenge for me, because you’re looking for new factories and new suppliers and new partnerships that you can work with. We normally churn maybe 15, 20 per cent of our suppliers in a 12-month period.
“Whereas now I’ve been working with the same people for two years. And so you have to be careful to be on top of your game and look at new productions.”
Orla Kiely is an example of what Allied can offer brands that are already popular in their own right. Scanlan is fastidious about design, explaining the exacting way Kiely’s products, ranging from salad bows to aprons, need to be created to have the symmetry and shine that have defined her style for decades. The textiles for her new collection are from India, the ceramics are from China, and the water bottles are from the far east.
“There are six things we offer to brands when they licence with us,” Scanlan said.
“Firstly integrity; there’s loads of guys out there that will say, they’ll offer you the earth, moon and stars, and they don’t deliver.
“You can not say how successful or unsuccessful a particular range will be but all you can do, is bring in this collection, put our marketing process behind the product, sell it and it will reach its own level of sales, whatever that is, whether it’s a multi million euro level, or whether it’s it’s a €500,000 level, that no one really knows how popular a particular collection will be.
“The second thing is sourcing and the ability to source, the third is having the finances to follow up on your promises.
“There is no point signing up for a licence and constantly running out of stock because you haven’t got the financial capital to buy in the level of stock needed.
“We also have the design capabilities, and the logistical abilities.The last thing is marketing and the sales process.”
He is currently on the lookout for new brands with strong equity already attached to their name, especially those that can work internationally.
Stocked in over 200 retailers around Ireland and the UK, Scanlan took advantage of cheap retail spaces on offer during the pandemic and opened two Tipperary Crystal stores in Dublin city centre, as well as franchising five more around Ireland.
“The core reason for the retail shops was first and foremost to make money, but another reason was to get it out to the public, that Tipperary Crystal does more than just crystal,” he said.
The latest accounts filed for Allied, show revenues of almost €13.4 million in 2019 and a pre-tax profit of €2.5 million. Scanlan expects revenues to more than double within the next three years and has taken on private equity investment to get there.
With the backing of Renatus Capital Partners, who invested several million euro in 2020, Allied is trying to get its revenue to €30 million in the next three years and has brought in several big names to its board.
They include Anthony Davey, who was the chief executive of Farrow and Ball, the paint brand when it was sold for £550 million last year and John Herlihy, the former head of Google Ireland. Paul Duffy, a previous chairman and chief executive of Pernod Ricard, is also on the board.
It’s important to Scanlan that any future growth is done in a sustainable way.
“I see these online businesses, that are valued at $6 billion and never made a profit. But the way I’ve been brought up, you make a gross margin, you watch your overheads, it all makes sense,“ he said.
A family business
The way Scanlan was brought up was in the business. His dad founded Allied Imports in 1973, and he worked with him in their office on Hanover Quay, where Airbnb’s European headquarters are now.
In the 1970s, it was a decrepit storage building and Scanlan worked there from his early teens, bringing boxes from containers into storage.
Scanlan, who describes himself as passionate about the marketing and design side of the business rather than numbers and accountancy, graduated from marketing in DIT in his early twenties and moved to Hong Kong to do a post-grad.
The goal was in part to learn Mandarin but after six months he realised he was learning the wrong language and before he got to grips with the real thing, he was called back home as his father had had a heart attack.
He was 24, and within four years he would become managing director of the family business.
Reflecting on the decision to take on external investment for the first time, Scanlan reasons: “If you want to be a big boy, and you want to play with the big boys, you’ve got to act like a big boy.”
The introduction of these figures to the board, where Scanlan, his wife and his brother Stephen still sit, indicates a likelihood that Allied will be up for sale at some point.
“If in the future, we were looking at the sale of the business, and it was a couple of family members and a bit ad hoc, it might have been difficult,” he said.
“Now, if we look at a future sale, it would be a relatively large deal and it’s gonna be squeaky clean, red hot, there’s going to be no information gaps and it’s going to look like what you would expect from a large corporation.”