Vertu slashes suppliers after break from Nokia

26 August 2013

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27 August 2013 | Will Green

An overhaul of the sourcing department at luxury phone maker Vertu has seen the number of suppliers cut in half.

Since the firm was bought from Nokia by private equity company EQT in October 2012, the supplier base has shrunk from approximately 2,000 to 1,000.

At the same time, a Vertu Sourcing Academy has been established to hone the skills of the 50-strong procurement team, covering areas such as contract management, supplier relationship management and legal frameworks.

Sourcing director Lonnie Salmon, who joined the company in January 2012, said: “In rough terms, we have halved the supplier base since the divestiture.”

But Salmon said the changes were not just about the bottom line and the sourcing team were playing a part in developing new business opportunities, such as partnerships with Ferrari, Bang & Olufsen and American Express.

“It’s not just around cost reductions, but producing value for the business,” he said.

Vertu phones, with prices upwards of £5,000, are handmade at the firm’s factory and global headquarters in Hampshire.

Salmon said inputs were sourced from a wide range of suppliers, from Google to a 150-year-old tannery in Austria.

Salmon said: “We source on every continent. Because the product is so unique we have to scour the planet to bring the best of materials.

“We partner with companies as big as $1 billion down to small companies that are almost artisan. We have a unique blend of relationships that need to be brought together. They all have a unique engagement and relationship. In one particular case the majority of people only speak Italian. When we engage with them it’s very different to speaking with Google.”

The company’s biggest market is China and the Far East, followed by Europe.

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