Lilly and Sid: Transition to the Big League
Date: 04/07/2021

Lilly and Sid: Transition to the Big League

Migration from physical shopping to online is real and this is not an isolated incident due to the pandemic, but consumers will stay online because the technology enables them to compare price, product specification, quality etc in a convenient, single platform. The change is much evident in the last 5 – 6 months where the online sales have grown multifold compared to the same period in past years.

Another aspect is that the younger generation have started to understand the impact of fashion on the environment. Fashion is one of the largest industry’s polluting the environment and the buzz for sustainability has been around for the past 5-6 years, but with the pandemic situation, consumers will be forced to rethink their spend on clothing which would result in a greater reduction in waste clothing going into landfill. Strategies and technologies are in place to recycle used cloths which is heavily driven by the online fraternity.

In the entire supply chain, the share to the manufacturers to date has been very minimal whereas the larger portion inevitably goes to the retailers, to fulfil their operating expenses. This may change in the near future, where distribution of value may be recalculated. How this happens is yet to be seen. However, with larger Brands and retailers moving into the online channels to reach to the end consumer, is a start.

Norlanka Manufacturing

Norlanka Manufacturing Ltd. is a part of the PDS Multinational Group which generates an annual turnover of over USD 1 Billion and maintains a global footprint in 15 countries. Backed by a growth driven global giant, Norlanka is a supply chain solutions provider to over 25 brands and AAA rated high-end retail chains internationally. The value-added solutions provided to customers range from design to delivery to market research and intel.

At present, Norlanka works with over 30 factories across the country which provide over 16,000 direct employment in rural areas, assisting Norlanka to ship over 20 Million garments a year. Norlanka is one of the largest sustainable exporters of Baby and Kids wear out of Sri Lanka, along with many other product categories that are under its portfolio and an annual turnover of over USD 100 million. Under the Norlanka banner, there are close to 1,000 employed including the manufacturing facility in Thambalagamuwa.

As a company with international bandwidth, Norlanka continues to attract foreign investment to improve the manufacturing capabilities of their business partners through continuous research. The factories they have partnered with are tier 2 and tier 3 factories, who need support in terms of financing for raw material etc. Norlanka’s ethos is no way different to PDS Multinational, who believes in the entrepreneurial spirit of their partners; this working relationship allows them to step up to the next level and bring pride to their businesses.

The Group’s onboarding policy is based on three criteria. Unique product capability that could bring the competitive advantage, new customer base and geographical reach for production and selling, which can effectively leverage on synergy benefits across the group.

As a company with international bandwidth, Norlanka continues to attract foreign investment to improve the manufacturing capabilities of their business partners through continuous research.

The Acquisition

With PDS’ reputation of being a platform for entrepreneurs to take their businesses to the next level, Lilly & Sid approached PDS in the latter part of 2019.

This brand was launched in the UK by a couple, who grew their brand from zero to a million pounds in 10 years. The story goes that the couple wanted to buy some clothes for their children—Lilly and Sid—but could not find the right clothes in terms of quality. So, they started their own brand. The founder Emma was design head of a large retailer in the UK and she knew the technicality of the products. Imran, her husband and the co-founder was an IT guy. This was a perfect combination to launch their baby/ kids wear products online. However, their growth was coming to a saturation point with the limitation of sophisticated infrastructure and backing to support further growth. This is when they reached out to PDS for a partnership.

Capitalising on the group synergy, PDS turned towards the Group’s largest sourcing arm for kids and baby wear, Norlanka. Being in the B2B business since its inception and one of the largest exporters in the world market in this category of product, the CEO of Norlanka welcomed the fresh opportunity to work with a quality brand on the B2C platform. This is unchartered territory for PDS in its 20 years of business.

After several rounds of deliberation and due diligence, the management of Norlanka Manufacturing decided to acquire a majority stake in the UK based online brand, Lilly & Sid. This acquisition comes at a time, just weeks before the entire world was astounded by the COVID-19 pandemic.

Norlanka has been able to catapult Lilly & Sid to its next phase of growth, leveraging its capabilities like:

  • Sourcing Synergies – Product design, quality and economical sourcing
  • Technology – Data analytics providing right insights to take better business decisions
  • Inventory Management – Right mix of SKUs to hit the sweet spot
  • Online Marketing – Effective use of marketing tools to get high ROI on ad spends. Online sales are already 5x vs PY with better traction of online sessions and conversion
  • New Product Range – New product categories have been strategically added like Mother’s/Women’s wear, activewear, etc. which has got amazing response
  • New geography – Will soon expand into Asian markets as soon as SS21 and gradually build the global footprint
  • Financial Control – Optimum use of capital and resources with strong credit controls and sound risk management practices

The brand is 100% sustainable, organic and GOTS certified and is sourced predominantly from India and Sri Lanka and will be expanding to Turkey and China as Lilly & Sid grows its global footprint.

From being a one-product, one-customer company, Norlanka’s success has been multifold through the years, to rebuilding its strategy on product and customer portfolio. As at today, any big customer is not more that 15% of the company’s turnover and any product category not more that 30% of the total portfolio. Norlanka is working diligently to eliminate any concentrated dependencies in marketplaces by further increasing the footprint in US, Germany, Middle East, China and Australia.

Since it’s inception in 2010, Norlanka’s business model has evolved, proving to be a healthy and sustainable one. Despite the pandemic situation, the growth projections are still towards the positive. Norlanka strives to service its expanding customer base with excellence and encourage all stakeholders, internal and external, to be proud of being part of the apparel manufacturing fraternity in Sri Lanka.