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04 May 2012

Zutux - 'Part of the Furniture' at The North West Fund

Roger Butterworth, managing director of Zutux talks about the path to funding from The North West Fund...

Zutux main

From Left to right: Joseph Bergin (YFM Equity Partners), Roger Butterworth (CEO Zutux), Paul Gower (YFM Equity Partners)

In March, YFM Equity Partners, managers of The North West Fund for Development Capital, invested £950,000 into Zutux Limited, a bespoke furniture manufacturer based in Trafford Park, Manchester. The business, which was set up in March 2010 by managing director Roger Butterworth and software developer Kevin Charles, makes fitted kitchen and bedroom furniture, as well as free-standing furniture items like bookcases, desks and multi-media storage units. 

Here,Roger Butterworth explains the story behind Zutux and the path to funding from The North West Fund for Development Capital.

How did Zutux develop?

In early 2010, the business started off by importing furniture from the Far East. This went quite well, but we really wanted more control over the design and quality of the furniture that we were selling, so when in February 2011 we heard that the Johnson & Johnson furniture factory in Trafford Park was up for sale we jumped at the chance to buy it and bring the manufacturing of our products back to the UK. The cost of fuel and labour was increasing dramatically in the Far East and we felt that by making our own items here we would get better-quality products and provide our customers with much better value for money. It was also great to bring manufacturing jobs back to the UK and it gives us an added USP in offering domestic-made products.

How long have you worked in the furniture business?

We have people here who have between them more than 500 years' experience in furniture manufacturing. I personally have only been in the business for two years. Before Zutux I was one of the founders of an online retailer of mobile phones based in Manchester. We built up the business into a multinational brand and floated on the AIM market. I decided to make my next business in the furniture industry because I wanted to be directly involved in manufacturing and dealing directly with clients to improve the customer experience and to work in a business with better profit margins.

How did you find out about The North West Fund?

I found out about The North West Fund through a web search while I was looking for investment and in particular those that had invested in manufacturing firms. From The North West Fund's website, I contacted YFM Equity Partners directly and was put in touch with the funding team there.

What was the funding process like and how long did it take?

I spent three months in discussions with YFM Equity Partners, explaining the business and what our future plans were. We then spent a further three months structuring the deal, which is a mixture of loan and equity, and, finally, completing. Like any investment, it was not a completely painless process but it was really well-managed by YFM Equity Partners. I was really happy with the outcome and I am confident we are now well-positioned to execute our growth plans. The deal has already created three new jobs and we are hopeful there will be another 15 positions created over the next two years.

The process was very straightforward. YFM Equity Partners were very helpful and supportive from the early stages as we were making our way through the due diligence process. The team were attentive to our business needs and helped us to create a plan for Zutux's future. We are very much looking forward to working with the team at YFM Equity Partners. It was also helpful that Sir Eric Peacock was brought into the business as a non-executive director. He has brought a wealth of experience which we are sure will help us.

What are your plans for the future following on from the investment?

The North West Fund investment will enable us to grow our range of products for people who value well-made, competitively-priced British furniture. We have just taken on two new recruits in the production team and we will be looking to increase the numbers in our sales team too. We also plan to expand our product range. Our online sale operation is rapidly turning out to be one of the strongest areas of our business at the moment, generating almost a third of our total sales. Over the next year or so we are expecting to see this increase to more than 50%. We feel that we offer products at 'John Lewis-quality' for 'IKEA prices' because they come straight from the factory.

What advice would you give to others who may be thinking of using The North West Fund to attract investment into their business?

The North West Fund was ideal for us and was one of the few funding routes open to businesses of our size. At a time when traditional banking funding and other forms of venture capital are very difficult to obtain, The North West Fund is one of the best methods to get fast capital and expert business support to accelerate the growth of your business. I would urge businesses to ensure they consider equity finance and not just debt finance as a way to grow the company. As well as meaning they are not taking on more debt, it also often brings the benefit of outside expertise in the form of a non-executive director or experienced chairman.

If you are an entrepreneur or a business owner looking for growth funds please visit http://www.thenorthwestfund.co.uk/funds for more information.


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