Milexa Group: building a global brand with a laser focus on sustainability and customer experience

Founded in 2010, Liverpool-based Milexa Group is a pioneering surface design company. The business designs and manufactures innovative wallpaper and flooring products for homes and businesses. It currently has two brands: MuralsWallpaper and Atrafloor. Selling purely through e-commerce, Milexa serves customers around the world, shipping to over 60 countries in 2020. The company was featured at Number 39 of the 2020 Sunday Times Virgin Atlantic Fast Track 100 league table, which ranks Britain’s 100 private companies with the fastest-growing sales over their latest three years.

• Growth journey
• Adapting business strategy
• People
• Cashflow
• Growth opportunities
• Barriers to growth
• Regional support
• Advice for other business leaders

Can you tell me about the journey your business has been on over the past 12 months?

We are up to about 45% growth and it was similar the year before that. We’ve had pretty rapid growth over the past few years. I get excited by the challenge growth brings and the opportunities – and the fact we are moving closer to our vision as a business. 

Our revenues should finish at around £7.3m this year and next year we are going for £9m. When we first went through lockdown in March, our sales plummeted by 40% or 50%. That was frightening. But after a week or two, things started to tick up again. After six to eight weeks, we were back to where we were pre lockdown. We beat our budget in November and are now slightly ahead of our original plan for the year.

We’ve seen a different picture in different countries. In America, large parts of the country are carrying on as normal. We’ve seen a lot of orders from bars, hotels and restaurants over there, whereas we are not seeing that in Europe.

Have you had to adapt your business strategy in recent months?

We sell Business to Consumer (B2C) to home owners, and also Business to Business (B2B) to a lot of hospitality businesses such as bars, hotels and restaurants. That has reduced overall, but we have seen an increase in B2C because people are moving house and spending time at home decorating.

We have shifted our efforts more to the B2C market as a result. We have done some specific marketing campaigns around the home office. That also fits with our purpose because we want to enrich environments and make the spaces where people spend their time better.  

As your business has grown rapidly, where have you seen the biggest growing pains?

Most of our growing pains are around people and internal processes – so evolving the business and introducing structures and processes to cope with increased size. Our headcount is now about 49. We’ve added about 10 people in the past 12 months.

Over the last two years we have introduced a management layer below the leadership team. The reason is to free up the leadership team to work on larger cross-functional projects, and to get decision making down the organisation to the people doing the job. The people closest to the action are best placed to make decisions.

That totally changes the communication processes and dynamics. We have had to think about what works and about our culture – taking the best of what we have and making it fit for purpose for our new size. And we’re trying to look ahead: will this work when we have 70 or 80 people?  

Operationally, on the production side, it’s been quite easy to scale up. We invested around 18 months ago in a digital wallpaper production line. It’s the only one in the UK and there are only three in the world. This increased our capacity overnight about 18 fold. It brought other benefits as well. We could manufacture much quicker, get product to the customer much quicker and it increased our margin.

We have never taken any external funding. Because our business model is solely e-commerce, we manufacture to order to fit the customer’s wall size or floor and are paid up front. We hold some stock, but it’s quite a lean operation. We have always had a positive cashflow and our profitability is good. So we have been able to use retained cash in the business to grow.

What about your people strategy? Can you find people with the skills you need when you need more resources?

If you have the right people, you can deliver your plan and vision. Generally we’ve done well in finding talent, but it is an ongoing challenge. Quite a lot of our marketing activity, what we are doing around website experience and the technology we use is all getting quite advanced. So the talent pool of people with the skills we need reduces.

We have a good story in terms of the products we sell, the journey we are on and our previous performance.

How have you fared from an operational cashflow perspective? Do you feel government measures provided enough support?

We have not had to furlough anybody or apply for a government loan. We were eligible for a business rate relief grant on one of our offices. That was good as it was at the time our sales dropped dramatically. But we have been lucky in that we sell through e-commerce and sell products that go in people’s homes when everybody is decorating.

I think the Government has been quite quick to react and support businesses generally. It’s not easy to roll out a furlough scheme nationally within a few weeks. The support measures have been good on the whole.

What do you see as the main opportunity for your business’ growth?

The main wallpaper products we sell are a single design, like a big mural. That’s been our niche and we are quite established in that market. We now want to start introducing more repeat designs – modern designs, but repeated patterns. The size of that market is so much bigger. So that’s a big focus for next year.

We are also doing a lot of website work to improve the customer experience and the shopping experience – to make things better, easier and smoother. 

With our flooring, it’s about growing that product. Flooring currently represents about 5% of revenue, so we want to get that growing. We will be taking a lot of the things that work well with wallpaper, and carrying them across and hoping we get the same results.

What do you see as being the main barrier to your business’ growth over the coming 12 months?

The main barrier is to do with Brexit around import VAT and duties. We want a proposition which is universally consistent – where customers have one price to pay. But under the announcement in late November, if we sell to France, for example, the customer will have to pay VAT before they get their package.

We are speaking to people about how to deal with this and I think there is a solution. We will have to do something because the uncertainty around how our customers would react to the change is too much of a risk. If it puts off 20% of our customers, the cost to our business would be astronomical. So we will have to do a lot of work just to maintain the status quo in terms of how we sell to customers, whereas we could be focusing on continuing to grow.

Although we are quite lean with our operations, we have bulked up our stock to get us through the next Brexit transition period. We are paying an external warehouse to store it so it’s a temporary thing.

What international expansion plans do you have?

We already trade internationally. The US is our biggest export market and then France, Germany, Australia, Canada, Spain and Italy. We also have a spread of sales elsewhere.

Our international expansion plans are going as expected. The trends of people moving house and renovating seem to be happening in other countries, as well as the UK, even without our stamp duty measures encouraging people to move.   

What do you see as the main challenges facing businesses in your region?

From a Merseyside perspective, there probably aren’t as many businesses in the advanced tech and digital sector as there are in London or Manchester. So the talent pool is a bit smaller. But there are upsides too in that people move around less. So it might sometimes be harder to find talent, but when you do, you can keep it a bit longer.

Liverpool is a good place to be. We’re based in the Baltic Triangle, which is the creative quarter. There’s a really good vibe about the area and so we can generally get good people. 

How do you view the business support available at a regional level?

I have a contact who is part of the Local Enterprise Partnership (LEP). She is good at getting in touch about business support that’s on offer. I have got into the habit of reaching out for an update, if I’m facing a business change or challenge. There’s a lot of support and guidance available. I’ve also recently been involved in a new pilot mentoring scheme and got partnered up with an executive at Amazon.   

What advice could you share for other business leaders?

With all the uncertainty, focus on the things that really matter and that you can actually control. If you nail down the things you can influence and focus on those, you can get the peace of mind of knowing you’re doing the best you can. Then what will be, will be.

https://www.milexagroup.com/

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