When the going gets tough, the tough get baking.
Well, at least Johnnie Whyte and Vivienne Lawson did when their interior design business Lawson Whyte Design went into liquidation in 2009.
An entrepreneur to his fingertips — “I was never going to work for someone else, ever” — Whyte simply changed tack.
The 51-year-old had started out on his entrepreneurial career straight from school, the King’s Hospital, selling mirrored wardrobes with his sister. “I didn’t want to go to college,” he said. “I wanted to make money.”
His next step was to open a nightclub, Minsky’s in Ely Place, Dublin.
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“It wasn’t gay originally but I turned it gay because the regular nightclub business is a weekend trade, but in gay nightclubs every night is Saturday night, so it made more money that way,” said Whyte.
Nightclub life was fun but unsustainable. “I’d be going into work at midnight and coming home at 7am. Also, it was illegal — I only had a licence to serve until 11pm and of course I was only opening my doors then.”
The nightclub did provide him with funds finally to go to college, aged 28, to study interior design.
“The building boom was taking off, I had loved interior design since my wardrobe selling days and I thought there would be a good business in it, if only I had the tools,” he said. “So I went to college not to get a degree, I couldn’t have cared less about that, but to get the information I needed to set up the business.”
At college he met Lawson, who was to become both his life and business partner. They have three children.
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Their business, which specialised in restaurant and pub design, grew steadily over nearly two decades, with fee income of more than €1m at its peak and a staff of seven.
“We survived two recessions but this current one was different,” said Whyte. “The phone stopped ringing.”
“We held on for a year or so but one big creditor, a developer, finished us off,” he added. “We spent five figures in legal fees trying to get our money and the day we got a court date the developer declared itself insolvent. We went into liquidation.”
One of their last design commissions provided them with an unexpected opportunity.
“We had been asked to design a sweet kiosk for the Ilac Centre but it wasn’t working for our client,” he said. “We reckoned we could do better with it if we had a speciality product such as cupcakes, which had become very fashionable. So we bought the kiosk and did a deal with the Ilac for the space.”
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Lawson and Whyte then set about perfecting cupcake recipes, with the help of patisserie chefs at Dundalk Institute of Technology. They took stalls at farmers’ markets to trial them.
“We chose cupcakes as they were something we reckoned we could brand,” she said. “We had seen how the Millie’s model had worked for biscuits in the UK and reckoned we could do something similar with cupcakes.”
They perfected their recipes and then secured a commercial kitchen in Drogheda and went into production supplying the Ilac centre kiosk. Within a year they opened a second kiosk in Liffey Valley shopping centre. Their third outlet was in Northern Ireland, which became a springboard into the UK.
Today, Johnnie Cupcakes has nine kiosks in the UK, with plans for five more within months.
But in the beginning, while the cupcakes were selling like hot cakes, lack of finance proved a serious drag.
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“The banks were useless,” said Whyte. “We have one, but only to lodge money into a hole in the wall — and they even crib about the way we do that. We have no credit card and no loans. They wouldn’t give us one.
“While we have managed without them — we’ve been making money since day one — I’d have been 10 times further down the road if I had had a bank I could have a relationship with.”
Having no credit facilities forced Whyte to carry out many functions he would otherwise have outsourced. This pleases him. “I knew I needed an online business and social media, things I knew nothing about, but if I’m good at anything, it’s research,” he said. “I won’t pay experts, I’ll learn it myself. I built the website myself.”
While such accomplishments are gratifying, the pace of the company’s progress in Ireland has been frustrating. “From doing the deal with Liffey Valley to putting the kiosk in took seven months,” he said. “Then there are 45-page leases nobody can understand. I don’t want to pay a solicitor €3,000 just to read a lease for me.”
In the UK, by contrast, he gets a standard eight-page lease, in simple English. “I did a 14-shop deal with Capital, one of the biggest players in UK shopping centres, in 55 minutes.”
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Service charges are lower, rates are lower and terms of lease are easier in the UK. “Meanwhile, back home, I’m two years trying to do a deal with Dundrum and still can’t get in.”
Landing the Capital deal wasn’t quite the cake walk he makes out, though it began wonderfully well. “I went in to make a presentation with a box of cupcakes with the Capital logo on them. They loved it, said our concept would suit their shopping centres and where did we want to go first.”
He was unprepared for such a coup. “I knew I didn’t have the resources to do it or a bank to help me, but I bluffed my way and thought on my feet.”
To help, he redesigned the existing kiosk to a point where he can now deliver one in prefabricated form to a shopping centre at 6pm and have it ready for business “and generating revenues” by 10am the next day.
Construction costs per kiosk fell from €120,000 to €30,000 as a result of the redesign, a figure which was easier to manage financially.
By the end of this year, the company, which employs more than 50 people, will have a turnover of €4m.
“This is a numbers game,” said Whyte. “The more shops we have, the more cash we will have to open more shops. We are now looking at France and Germany.”
His in-store location in each shopping centre is crucial. “We don’t see Johnnie Cupcakes as a food company or a bakery, we see it as a guilty pleasure. All our locations in shopping centres — and we insist on this — are not in food courts but near the fashion stores. The kiosk design is more akin to selling jewellery than cupcakes.
“Vivienne and I didn’t start this from a baker’s point of view, it was always about design. You eat with your eyes, so a customer has decided they taste great before they buy them. To get a customer back, however, the taste has to be great, and it is.”