Independent producers bucks retail trend with record £3.5million payout

Independent producers bucks retail trend with record £3.5million payout

11 Jul    Finance News, In Business

A social enterprise is targeting a record pay out to independent artists and producers, of more than £3.5million in the coming year, following the launch of two new outlets.

The not-for-profit Scottish Design Exchange – which provides high street retail space for hundreds of artists, designers, and artisan food manufacturers  – expects to more than double its sales in the next 12 months.

It follows the unprecedented success of its most recent success at the Tron Kirk on Edinburgh’s Royal Mile, and the imminent launch of Foodies, its first spin-out food and drink store, in Glasgow’s Buchanan Galleries.

Both were created to complement existing Scottish Design Exchange (SDX) branches in Glasgow and Edinburgh.

Since it was launched in 2015, the business has provided high-footfall retail space, and generated more than £6million of income, for hundreds of independent producers who would otherwise pay commission to outlets and galleries, which can be as high as 60%.

SDX tenants pay a small, fixed, monthly fee to rent space in its city centre stores, and they keep 100% of their sales, so they’re not penalised for the popularity of their products.

The seven-days-a-week permanent art market space, based at the Tron building on the Royal Mile, has proved an outstanding success, generating record takings for its 21 small businesses since it opened on July 1, last year.

The income it has generated has proved life-changing for all of them, with 18 having to register for VAT for the first time and several able to work full-time as artists as a result of the growth of their income.

In addition, the small art and design-based businesses have generated employment for 51 people and the Tron Kirk Market has become one of the most visited places on the Royal Mile, both by tourists and locals.

All but one of the tenants said they had received additional business support from SDX, compared with five who had received support from Business Gateway, one from Scottish Enterprise and the same number from Creative Scotland.

Meanwhile 14 said they sourced all the raw materials for their products in Scotland, compared with six from England and one from Europe.

SDX chief executive Lynzi Leroy, a former project manager for Shell, said the success of the Tron outlet had supercharged the business, creating opportunities for further expansion.

She said: “Just one of our outlets has created much needed stability for 21 small businesses, allowing many of them to become full-time producers, and to earn a good living.

“Given that most purchase their materials from other Scottish businesses, we are helping to create a sustainable supply chain that benefits, not just our traders, but the companies that supply them.”

Leroy added: “Since the Covid pandemic, SDX has gone from strength-to-strength and we expect further growth and expansion in the next few years.

“Despite the headwinds of a challenging economy, ours has proved a robust and resilient business model.

“Consumers clearly want to buy the kind of high-quality products that are made by our artists and designers, and which reflect their skills, talent and commitment to growing their businesses.”

Artist Liana Moran, who has sold her work through SDX outlets, including the Tron, for six years, said: “SDX promotes artists and helps push us into making our unique businesses successful, always striving to make it easier for us to make these big leaps and become profitable.

“The growth in my business from the Tron alone has allowed me to leave my part-time job and focus on my artwork fulltime. The SDX team are very hands on and always willing to help with business advice. It is great to have their support.”

SDX signed a three-year lease with Scottish Historic Buildings Trust, which manages the Tron building last July.

Uncertainty had surrounded the future of the iconic, 17th century structure – formerly Edinburgh’s main parish church – which had remained empty for 50 years after it closed as a church in 1952. It has been on Historic Environment Scotland’s Buildings at Risk Register (BARR) since 2003.

Most recently, it housed the Edinburgh World Heritage Exhibition, but it has been vacant and unused since the pandemic lockdown forced its closure in 2020.

A spokesperson for the Trust said: “We are delighted to have SDX as our tenant in the Tron and that their first year of trading has been such a success. Not only have they brought opportunities to the local artists they support but as a result the Tron Kirk has been opened to thousands of visitors allowing them to appreciate the beauty and history of this significant building.”

Leroy said: “Despite the enormous success we and our artists and producers have enjoyed to date, across all of the SDX estate, we believe we are still only scratching the surface.

“There remains a massive, untapped demand for our approach to be applied to different markets and settings, including in food and drink.”

Foodies will provide retail space for up to 60 independent producers of high quality, specialist, and artisan foods and drink when it opens in Buchanan Galleries, Glasgow the middle of July, including coffee and specialist teas, honey, jams and chutneys, relishes and pickles, sauces, biscuits, chocolate and oatcakes.

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