Resources | Customer Success | November 13, 2017

Control of Cash Flow Helps Clothing Manufacturer Tey-Art Sustain Fair Trade

The company gets paid within days, allowing it to quickly reinvest in production.

Witnessing horrific working conditions in India in 1998 drove home the importance of fair trade sourcing to Mary Ann Weerts, the founder of Tey-Art Inc.

Weerts earned a degree in textiles, clothing, and design from the University of Nebraska-Lincoln. After graduation, she worked as an import buyer for several companies.

“When the salespeople get an order, the import buyer finds a factory somewhere in the world to produce it at a certain price point,” she says. “I was managing production in Asia, Africa, Europe, South America and Mexico. You’re trying to get the best quality product for your customer and meet their specifications.”

Weerts was in India on a rug sourcing assignment when she visited a factory that was involved in pit looming.

“They would dig a pit in the ground, and the loom would go into the ground,” Weerts said. “The workers were handed a ladder that went into the pit, and their job was like doing a StairMaster for 12 hours a day. They were skin and bones. I decided there was no way I could do this.”

Her experience served as the inspiration behind her company Tey-Art Inc.

About Tey-Art Inc.

Weerts founded Tey-Art Inc., based in North Oaks, Minn., in 2001. The company imports and distributes handcrafted alpaca clothing and accessories for women.

Tey-Art’s products are manufactured 100 percent in Peru. “We work with eight different artisan groups,” Weerts says.

“The facilities are very clean. Any time you’re dealing with textiles there’s a lot of fiber in the air, so they wear a mask over the nose and mouth, similar to what you would see a surgeon wear.”

To prevent work-related aches and pains, the Peruvian artisans take periodic stretch breaks. And the artisans make good wages.

Most of the artisans are women. Weerts says the work “provides them with an opportunity to utilize the skills they learned generally as children. A lot of the women use their salary to provide their children with a much better education.”

Tey-Art also provides microloans to help Peruvian suppliers launch their businesses. “We give them a small loan, like $1,000,” Weerts says. “That allows them to purchase yarn, and then they can knit or crochet.”

Fairtrade, the movement to help producers in foreign countries achieve better trading conditions and promote sustainability, is a core principle of Tey-Art.

“Our intarsia (a knitting technique used to create patterns with multiple colors) knitters get paid more than Peruvian teachers do.”
Mary Ann Weerts
Founder, Tey-Art Inc.

Weerts says it’s the right way to do business and is gaining momentum in the United States.

“We are at the forefront of the fair trade business,” Weerts says. “And we’re one of only two companies that are really involved in the distribution of alpaca products.”

Tey-Art’s products include women’s sweaters, hats, scarves, mittens and glittens, which are mittens that have flaps so they can become gloves.

“We’re trying to utilize fibers that are native to Peru and blend them, so you have a very sustainable product that people are willing to purchase over and over again,” Weerts says.

In addition to importing and distributing, Weerts still does quite a bit of the design work for Tey-Art’s products. “Now that my company is larger I can’t do 100 percent of the designing,” she says.

“I use some designers in Peru. I’m more like the merchandising manager, giving them ideas of what I’m looking for, and they do the detailed work of the design. Or I make a drawing and they take graph paper and put in all the colors and count all the squares for intarsia knit products.”

Tey-Art distributes its products to a wide variety of customers, including Fair Indigo, an apparel marketer that emphasizes its commitment to fair trade principles.

Other customers include 10,000 Villages contract stores; Smithsonian Catalogue; small shops and boutiques; and museums that are interested in fair trade.

“A museum doing a Peruvian exhibit might buy a seater from Tey-Art, or items such as scarves or socks,” Weerts says. “I did a special exhibit for National Geographic with hand loom pelts, bags and headbands.”

How C2FO helps Tey-Art

Weerts says C2FO helps Tey-Art fulfill its fair trade commitment by providing lower capital costs. C2FO does this is by enabling Tey-Art to access early payment from its largest customers.

Using C2FO to get customers to pay her company early has helped Tey-Art solve one of its biggest challenges, Weerts says.

“Obtaining capital at a lower cost is always an issue for a smaller company,” she said. “In this type of business, a lot of capital is needed to purchase yarn and get everything into production. When we go to a banker or utilize other financial products, we don’t have access to the lower rates for loans that a Fortune 500 company does.”

“We obtain much faster payment. As opposed to 30 days, we are paid in less than 10 days. That shortens the time it takes for us to fund our operations in Peru, which speeds up our production.”
Mary Ann Weerts
Founder, Tey-Art Inc.

Looking toward the future, Weerts says Tey-Art wants to offer more products such as socks, hats, mittens, and headbands at natural food stores and co-ops.

“Our focus is to become more of a gift category major player in the natural food business. We want consumers to recognize that our products are not only fairly produced, but made with natural fibers and are high quality. It’s something they’re going to keep wearing. We need to get away from disposable items that clog our landfills.”

Weerts says C2FO will help Tey-Art achieve its goals. “As we expand, having less expensive capital will help us keep our funding costs down. If we have lower capital costs, we can reduce the cost to the consumer.”

Weerts says she would recommend C2FO to her business customers, because “everyone can benefit from less expensive capital.”

Based on her success and lessons she has learned building and operating Tey-Art, Weerts advises aspiring business people to, “Make a high-quality product using fairly paid people. Somebody can always offer a lower price. The key things are quality and workmanship. I have customers come to us and say, ‘I have had one of your sweaters for five or six years and I wear it all the time, and I have to have another sweater from you.’ That’s a piece of pride that I have.”

Success Snapshot

Tey-Art Inc.

Tey-Art Inc. uses C2FO to accelerate payments from clients, which lets it pay its artisans faster and accelerate production.

Why C2FO?

By using C2FO, Tey-Art can avoid using traditional lending, which lowers its cost of working capital.