J Newsome Tools Bucks Trend to Expand with Import-export Business

Sheffield-based J Newsome Tools, which supplies hand tools to 2,000 retailers and manufacturers in the UK, has expanded its European export business and started a new division importing supplies from China after securing funding from Lloyds TSB Commercial Finance.

Established in 1967 by Jack Newsome, the company began by selling hand saws, chisels and trowels for builders out of a van and grew into one of the largest suppliers to DIY stores, car and tractor manufacturers in the country.

Martin Newsome, who began running the business alongside his father in 1972, saw rising demand from companies in Europe for high-quality tools. He built a large inventory at its 16,000 square-foot warehouse, enabling it to speed the delivery to its growing customer base. The export business now accounts for about 15 per cent of the company’s turnover.

Martin also began importing goods so he could supply his customers with the latest tools being developed at a low cost in China. The import division, which contributes 10 per cent of revenue, has secured contracts with two suppliers in China and imports in bulk to lower costs for its customers.

Total sales rose 10 per cent in 2009 and are predicted to continue to growing at the same pace next year.

The company used an invoice discounting facility from Lloyds TSB Commercial Finance, which releases the value from its sales ledger, enabling the company to access capital to support investment in its stock. This replaced the firm’s existing overdraft and trade finance facilities.

Martin Newsome, owner of J Newsome Tools, said: “Resellers are under pressure to keep stock low so they can get maximum return on capital. They need high quality tools that are value-for-money and can be delivered quickly. We’re the experts at doing that.

“The UK business is doing very well and we wanted to take advantage both of demand from overseas for our tools and from demand in the UK for some of the tools that are being developed in China.

“By using a funding facility from Lloyds TSB Commercial Finance, we were able to capitalise on discounts when building-up stock because we have good access to working capital. The business is in a strong position for the future.”

Charlotte Jackson, regional manager, at Lloyds TSB Commercial Finance, added: “J Newsome Tools is a great example of a family-owned company that has a long heritage in one of Sheffield’s traditional businesses.

“By using an invoice discounting facility, the business has been able to improve its cashflow and expand its service both in the domestic market and overseas.”