Start spreading the news: there are more opportunities for UK business in the Big Apple than ever before, all buoyed by a productive workforce, trend-setting locals and an ongoing love affair with all things British
In New York’s West Village, there’s a stretch of sidewalk so English it should probably be called a pavement. As yellow cabs whizz past, diners in Tea & Sympathy sit at Laura Ashley-esque tablecloths, tucking into shepherd’s pie washed down with Ribena.
Booming away in a south London accent is owner Nicky Perry, herself the embodiment of the American dream, with the then-London Stock Exchange tea-lady having arrived here as an illegal alien 34 years ago.
Since 1990, Tea & Sympathy’s store has sold McVitie’s Hobnobs, Sarson’s Malt Vinegar and Rowntree’s Fruit Gums to homesick expats. But in recent years, they’ve never been busier. Today, it has added branded tea bags and cookbooks and, next door, a fish ’n’ chip shop, A Salt and Battery. Needless to say, it’s the best place in Manhattan to get a decent cuppa, too.
In New York, the ‘Made in Britain’ tag’s stock has never been higher. You can see it in fashion, whether it’s the ‘tweenagers’ brandishing Union Jack handbags outside Soho’s Topshop, or Ted Baker’s recent 24 per cent rise in sales.
It’s there in the Times Square billboards beaming the faces of James Corden, Sam Smith or current Broadway queen Helen Mirren. Vestiges of this Anglophilia can also be glimpsed in new MLS football club New York City FC, a joint £66m franchise between Manchester City and the Yankees baseball team, contributing to the annual £130bn-worth of UK-US trade.
“British is synonymous with quality,” says Alexander Jillions, director, member relations at transatlantic business network, BritishAmerican Business. “Take a royal warrant issued to Barbour – that’s unattainable for Americans, like a knighthood.”
Ever since the Statue of Liberty welcomed the “tired, poor, huddled masses”, New York has been a beacon of opportunity for the many immigrants passing underneath the torch-bearing copper siren’s gaze. With 1.6 million people crammed onto this 22.8-square-mile island, Manhattan inspires sky-scraping ambition, chance encounters and seemingly infinite possibilities.
“It’s a cliché but New York is a city where dreams are made,” says British entrepreneur Judith Clegg, who founded boutique consultancy Takeout in 2006, regularly jetting between its London and Manhattan offices. “When you land here to start your business, it welcomes those who want to work hard.”
The most successful approach for British companies, reckons Jillions, is “to combine B2B with B2C” with London’s fin-tech sector particularly primed to benefit. “[NYC-based] companies want to cut costs, especially transferring money abroad, but expats living here would use that service too.”
Another growth sector is food and drink. New Yorkers’ insatiable appetite for the next big thing means there’s rarely been a better time for UK food manufacturers hoping to export (not for haggis producers, though – it’s been banned in the US since 1971).
As Jillions says: “New Yorkers are willing to pay for excellent products and services. There’s money to be made, no question. You’ll also find they’ll give new products a trial, so there’s little need for a hard sell.”
Pros and cons
One food company realising this potential is Mr Singh’s Sauce. Inspired by co-east Londoners, salmon-smokers H Forman & Son (the US is its largest export market), Mr Singh’s struck a deal with grocery chain Fairway last year: the chilli condiments once developed in the family shed are now reaching a new audience. Co-founder and chief executive Kuldip Singh Sahota admits accentuating British mores. “Our marketing material features stereotypical images such as the Queen, James Bond or the Union Jack,” he says. “If your company has heritage, tell that story. America is less than 250 years old. If you’re a Melton Mowbray pork-pie-maker with a 500-year-old recipe, they admire that.”
With labour productivity per employee 40 per cent greater in New York than elsewhere in the US, the city’s work ethic rubs off on British companies too. “You can’t be dragging your feet, umming and ahhing,” says Perry. “British people can be very laissez-faire in business – Americans cut to the chase and get on with it. Things get done quicker.”
For foreign firms, such alacrity can be stalled by New York’s glacially slow bureaucracy. Henley-on-Thames luxury watchmaker Bremont’s new boutique might occupy desirable Madison Avenue real estate, but the hoops it had to jump through before opening left a sour taste (see case study, p52).
Mr Singh’s had to wait several months before exporting to the US, while the FDA (Food and Drug Administration) requested details of the company’s cooking temperatures and ingredients.
Despite mayor Bill de Blasio’s Small Business First initiative – which aims to streamline licensing and permitting for local businesses – New York’s litigious nature can be eye-watering.
UKTI recommends hiring American attorneys, noting: “The US market can be quick to engage in legal proceedings.” Thanks to liability laws, getting US insurance (everything from employer’s practice liability to commercial insurance) is essential.
However, Perry says: “If you claim against insurance, your premiums quadruple. Our building caught fire a few years ago and was completely ruined, $35,000-worth (£22,000) of damage. I lost my phone system, computers, office, everything.
“My insurance company paid out quickly to get my business open again. But my insurance went up from $8,000 a year to $20,000 a year. These are things that stop businesses moving forwards.”
With New York wages higher than the UK, recruiting represents another problem. The average salary in the UK is £26,500. Manhattan hotel toilet-cleaners can trump that – their average earnings are £32,500. Despite this, hiring takes less time than the UK, thanks to New York State’s ‘at-will’ status. “This means there’s typically no notice period,” says Clegg. “Hiring somebody doesn’t take three months like in the UK.”
‘British-ing it up’ in New York
Although British executives don’t need to summon a Gordon Gekko swagger to succeed in New York’s competitive environment, some gutsiness is needed. “British companies have the potential to do extraordinarily well in NYC, especially if they have the right courage,” says Clegg. “Some of the biggest mistakes I’ve made are not grabbing more opportunities with both hands.”
“Always play up your British accent in New York,” adds Perry, who ensures all Tea & Sympathy’s staff hail from Blighty and drops Cockney-isms to a (possibly confused) delivery boy during our interview.
Clegg admits “British-ing it up” upon first moving to New York, holding afternoon tea parties in her apartment, with cucumber sandwiches and Winston Churchill’s favourite champagne, Pol Roger.
New York’s aggressive networking scene is a good place to put that new cut-glass diction to use. It’s not unusual for executives to attend five events in one night, à la fearsome Vogue editor Anna Wintour.
“If we organise a cocktail evening from 6-9pm in Manhattan, we’d turn the room three times in terms of guests,” says Clegg. “In London, people just stay.”
Jillions advises: “This is the city that never sleeps, get yourself out there.” That includes making marketing material US-ready, whether it’s websites with Americanised spellings or tweeting key clients.
Singh Sahota uses one social media-loving New York super-fan as a brand champion. “His mother-in-law’s food is terrible, so he’s constantly posting pictures about how Mr Singh’s Sauce makes it taste better. We’re always re-tagging his posts.”
However, America’s ingrained customer service culture also means if you upset clients, says Jillions, “word will spread quickly through social media”.
The Transatlantic Trade and Investment Partnership, a putative free-trade deal between the EU and US, is expected to be finalised in 2016. Described as having the “potential to be the biggest trade deal ever”, it aims to reduce tariffs and regulatory barriers to give the US and EU more freedom to access each other’s markets. Jillions believes it’ll be “beneficial for companies located outside London who wouldn’t be thinking about exporting right now”.
Until then, New York remains ripe for expansion. As Clegg says: “If you want to do it, you better be ready to be one of the best in the world or have those ambitions.
“New York’s high standards and pace can be unforgiving. But it’s also an open and welcoming market for people who want to deliver amazing products and services. I hope British businesses trade more with America – there’s tremendous opportunity.”
Case study: Bremont Watches
Founded by brothers Nick and Giles English in 2002, luxury watchmaker Bremont produces handbuilt timepieces from its Henley-on-Thames headquarters. With sales increasing in the US, the siblings decided to have a Stateside ground presence.
New York was chosen for its UK-friendly time zones and ‘staging post’ role for the rest of America, with Bremont finding a property on Madison Avenue in November 2014. However, as Nick explains: “It’s a huge aggro and stress setting up a boutique in New York.”
Bureaucracy was a particular bête noire. “You need a permit for absolutely everything from pouring concrete to the fire-sprinkler system. Our fire permit took us months to get.” Staff costs were also expensive, such as paying $250 (£159) an hour for a labourer or the army of attorneys, architects and accountants. Bremont eventually hired an expeditor, who helped secure permits. Six months later (“an awfully long time when you’re paying rent”) Bremont’s NYC boutique opened, employing eight people. Visiting New York once a month, Nick’s noted higher customer expectations. “They demand it [better customer service],” he says. “If you won’t have it next week, you’ve lost that sale.” There’s also the concept of after-sales. “Americans love to be absorbed by the brand and feel part of a club. Once you’ve sold a watch, your relationship with that person has only just begun.” Despite the setbacks, Bremont is now starting to reap the rewards. “If you want to be on Madison Avenue, you have to pay the price.”
New York City Guide