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Crimsonwing expertise secures business from Mothercare, Westfield

Crimsonwing chief executive David Walsh: “Revenue per employee, which has grown 35 per cent over the past few years, will continue to grow.”

Crimsonwing chief executive David Walsh: “Revenue per employee, which has grown 35 per cent over the past few years, will continue to grow.”

Crimsonwing’s consistent investment in expertise in Magento, the open source e-commerce application, and Microsoft Dynamics, the business solutions platform, is enabling it to win important contracts from major names, most recently Mothercare, Rezidor, Mastermate, and Westfield, chief executive David Walsh told The Times Business.

The Mothercare contract is a great Malta story

The Anglo-Dutch company, which has a team of 180-plus in Malta, has grown its Microsoft Dynamics consultancy from 20 to 100 professionals (40 of whom are based in Marsa) and its e-commerce team from 30 to 70. With such expertise in demand around the continent, recruiting the talent has been a feat in itself, and the investment is bearing fruit.

Earlier this year, Crimsonwing was commissioned by nursery brand Mothercare to design and implement an e-commerce solution in all its stores in 50 countries. Delivery to stores in Australia and New Zealand will begin as early as next year. The Magento-based solution will be designed and supported by Crimsonwing’s team in Malta, as part of an initial three-year contract.

“The Mothercare contract is a great Malta story,” UK-based Mr Walsh said in a telephone interview. “We have worked hard to build value by investing in amassing expertise in Magento and in Microsoft Dynamics. We were recommended to Mothercare by Magento on the strength of the expertise we now possess. We went through a normal competitive assessment to win the business.

“It has been an excellent strategy choice for us and the Mothercare contract is indicative of the investment we have made. E-commerce solutions are becoming increasingly sophisticated and it is important to have systems which cater for special offers and promotions. Customers demand a very good online experience – they want it to be fast, relevant, with the ability to search for items quickly, and make secure payments. Magento handles all that and we customise it to the client’s specifications.”

The Mothercare solution will involve numerous country-specific variations, and localisation issues include language and sales tax applications. Mr Walsh said the main challenge was the ability to manage the solution from a single core.

Crimsonwing has doubled its business to a forecast €18 million this year since its IPO on the Malta Stock Exchange in 2008, and euro sales now make up half its sales, up from a quarter four years ago. Sales are now split evenly between euro and sterling. The increased activity also means much more business is carried out in Malta, where the company has 50 clients, including some notable local names.

“Externally, it is not immediately obvious what is going on at Crimsonwing but there is a much wider spread of clients now,” Mr Walsh added. “Many of our 150 clients are serviced from Malta.”

Meanwhile, Crimsonwing has won a €2 million joint enterprise bid with the Microsoft Dynamics solution for Dutch company Mastermate, a large wholesalerfor technical construction and construction-related businesses. The 24-month contract kicked off in September and involves the implementation of Microsoft Dynamics within the Mastermate business.

Under another contract, Crimsonwing will run and enhance a procurement solution already in place at Radisson owner Rezidor which handles over €1 billion in purchasing a year.

And following talks with shopping mall giant Westfield to develop a global property management solution for its 120 locations, Crimsonwing has been given the go-ahead to further develop the solution for the shopping centre at Shepherd’s Bush in West London which comprises 450 shops.

Internally, Crimsonwing is in the second year of a three-year recovery plan that will see it aim for a target of €20 million turnover and a projected €2 million profit.

“Over the last three years, Crimsonwing suffered losses from one of our Dutch subsidiaries, VDA, which has now turned profitable, but it has taken us a while,” Mr Walsh said.

“Our other companies were performing satisfactorily. The turnaround has made a huge difference to the overall performance. We have been building our own skill sets and our own IP, sales of which will bring in regular income. It also means that revenue per employee, which has risen 35 per cent over the past few years, will continue to grow. Our €18 million forecast this year is not far off from the €20 million target. We have sorted out the cost base so we should be able to hit the projections.”

Mr Walsh acknowledged that the business environment was becoming increasingly challenging, particularly as vendors make greater and more complex demands of solution providers. Overall, there was less new business around but there was better quality business to be won. Crimsonwing is securing the right business, mainly thanks to the investment in building the scale necessary for ambitious projects, and its international experience, he said.

In Malta, the team was shaping up according to plan and recruitment was ongoing to strengthen the expertise in Magento and Microsoft Dynamics. Mr Walsh said customers were particularly impressed by the Malta set-up and the country’s accessibility. Igaming has tightened the talent pool and recruiting is more challenging.

However, the growing demand for expertise is encouraging more young people to pursue studies and careers in IT, which is a positive outcome of Malta’s attractiveness as an ICT destination.

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