Tom Smith earns King Charles’ honour as IG Design Group boss talks trends and profit margins
As Tom Smith pulls a cracker to celebrate being awarded a Royal Warrant by King Charles III, the CEO of parent company IG Design Group Paul Bal has been in the press explaining the Christmas trends that make up 40% of the firm’s annual turnover.
The just-announced honour means the cracker company started by the eponymous Tom in 1847 has been a supplier to the royals since receiving its first warrant from the then Prince and Princess of Wales back in 1906.
And the tradition has continued ever since, with Royal Warrants from King George V, Queen Mary, Queen Elizabeth The Queen Mother, and Queen Elizabeth II, with King Charles following in his mother’s cracker pulls.
“This new Royal Warrant marks a proud milestone in Tom Smith’s storied history, reaffirming its reputation as a trusted supplier to the Royal Household and a beloved brand for families across the UK and beyond,” commented IG’s brand and marketing manager Katie Brickle, who has also been its Royal Warrant officer since 2011, representing the company on the Highgrove Royal Warrant Holders’ Association where she was the first Madam President in 2022.
And the company’s crackers played a major part in Paul’s interview in The Times a few days ago, where he turned up for a lunch appointment with the newspaper’s Tom Howard bearing a sackful of goodies including Tom Smith’s finest, plus cards and wrapping paper.
Like Katie, the man who joined IG’s board as chief financial officer in May 2022 before taking the top job the following April, maintained a discreet silence on exactly what treats and toys fall out of the royals’ crackers when pulled.
But, as he sat down for a festive feast at the Bleeding Heart French bistro in London’s Farringdon, Paul was happy to reveal the trends, sharing his views that the popularity of Christmas cards is declining slightly but demand for outdoor decorations is increasing.
He told The Times that in the US, by some distance IG’s largest market, there have been some “interesting colour palettes” over the festive season just ending, adding: “You’ll be seeing more blush colours over there. We’re still more traditional in the UK – greens, reds, silvers and golds – although we’re usually a bit further behind the curve.”
He also explained that when he joined IG, the business was having a tough time due to rapidly increasing costs and especially freight rates: “The company delivered Christmas in 2021, but it cost them an arm and a leg.”
There was also the issue that IG had grown by buying dozens of businesses but hadn’t really integrated them, meaning its subsidiaries were often competing for the same customer.
Having almost completed that integration, Paul expects it to help with profit margins, targeting 4.5% for the next financial year with longer-term aspirations to double that.
“One of the challenges we face is commoditisation,” he explained. “We, as an industry, have allowed the rules of the game to be set by China. Whether they win business or not, they’ve acted as an anchor on pricing. We need to put value back into our category.”
As the company adds value through innovation and improving sustainability such as removing glitter and plastic – IG has saved 29 tonnes of plastic this year by not shrink-wrapping its rollwrap – there have still been a couple of profit warnings hitting the share price, mainly due to US issues where biggest customer Walmart ordered fewer Christmas products and other retail customers are struggling.
“In short, there’s just too much retail in the US,” Paul told The Times. “One of the added complications in the US has obviously been the election. When I was in the US over the summer in September and October, people weren’t in the shops.”
