Business

Exports keep clockmaker's orders ticking

Futuristic clock made by Smith of Derby
Image caption Smith of Derby's clocks are now exported around the world

Out of all the sources of hope for the British economy, the Queen of Tonga may seem like an unlikely symbol of potential revival.

But for Smith of Derby, selling clocks to customers including the monarch of a small Pacific island represents a crucial part of its business plan.

Its viewpoint chimes with many in British business - while trade at home is subdued, it's exports that really count.

This has been backed by a new report by the British Chambers of Commerce, which says that while the UK's service sector is suffering domestically, many manufacturers are enjoying an export-led boom.

At Smith, the talk is more about Beijing than Birmingham, less about London and more about Lagos.

"We have a simple philosophy," says Bob Betts, the managing director of the family-owned firm.

"We looked at where all the construction cranes were around the world and followed the business."

The company's main business used to be renovating and maintaining nearly 5,000 clocks around the UK.

The firm's work ranges from maintaining the clocks at St Paul's Cathedral to installing one at Arsenal's Emirates stadium.

Emerging markets

The recession forced the company to look at new markets. It now sees 90% of its business in new clocks coming from outside the UK, pushing profits up by 30% in the past three years.

Image caption Bob Betts says the 'Made in Britain' brand is much in demand in China, Russia and India

In a small office renovated especially for overseas clients, Mr Betts points to pictures of the company's newest ventures in East Asia.

"That clock has the largest hands of any mechanical clock in the world," he says, pointing at a poster of a giant illuminated clock surrounded by landscaped gardens and elaborate water features.

The project for the Chinese city of Ganzhou will earn the company more than £1m and has helped boost its profile in one of the world's fastest-growing economies.

The story of success at Smith of Derby represents the direction that many feel the UK economy must look to in the search for growth.

The company does not try to compete with foreign manufacturers of cheap clocks, but instead emphasises its manufacturing excellence in the high end of the luxury goods market.

Mr Betts says that emerging market customers in places like Russia, China and India greatly value the "Made in Britain" brand, and are prepared to pay for it.

While it used to be parish vicars that made up Smith's customer base, now it's just as likely to be Russian oligarchs or foreign governments.

Retail slowdown

Just down the road from the Smith clock factory, Sally McAnulty is helping a customer buy the last of her clothing store's fixtures and fittings.

Image caption Sally McAnulty says the recession hit hard

The store - David Brindley - has been in the family for five generations, but the cumulative affects of recession and the changing nature of the High Street are forcing the retailer out of business.

The demise of the store is in marked contrast to the continuing success of Smith.

For while export manufacturers may be booming, service sector businesses such as retailing are shedding jobs as the economy slows.

"The recession has hit us hard," says Mrs McAnulty.

"Customers come in and try and barter me down for everything, and we simply can't keep our margins up."

The store began life in 1890 and had managed to adapt to changing fashion tastes.

But the advent of cheap retailers, and the pressure on people's pockets from the recession, have done for one of Derby's most famous stores.

The increase in VAT, public sector spending cuts, and the squeeze on living standards have all added to the company's problems.

Renewal or recession?

Derby seems to illustrate the crossroads at which the UK economy now finds itself.

Image caption Smith is selling more and more clocks abroad

The city centre is dominated by a huge shopping mall, surrounded by hundreds of other shops, all of which grew up during the UK's decades of seemingly endless consumer spending.

The credit crunch and subsequent recession are now leaving much of the service sector without the custom they have relied on for so long, forcing many businesses to lay off workers.

Meanwhile, up the road at Smith of Derby, they're now taking on new workers, not making them redundant - a symbol of the renewed hope in British manufacturing.

The Queen of Tonga has yet to be spotted on Derby's main shopping street, but she has been doing her bit to support the city's economy.

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