Agent Provocateur, French for inciting agent, is luring in consumers the world over with its seductive garments. Customer demand from New York to Shanghai has meant that it now has more than 100 shops open for business. CEO Garry Hogarth talks exclusively to Lingerie Insight about how the brand has grown from a loss-making fledgling to a global phenomenon in less than 10 years.
Agent Provocateur recently confirmed that it would not be put up for sale by private equity firm 3i after undergoing a strategic review.
Earlier reports suggested that 3i was sounding out investment banks about conducting an auction of the British label.
But the company, which acquired a majority stake in Agent Provocateur in 2007, was advised by Goldman Sachs to hold off from the sale due to the retailer’s huge growth potential.
Agent Provocateur CEO Garry Hogarth told Lingerie Insight at the time: “3i is the majority shareholder and has invested in the company for seven years, which is quite a long time, so they had Goldman Sachs carry out a strategic review and advise them on whether it was the right time to exit.
“At the end of the review we were all in agreement that, with all the potential that we have, it’s really not the right time to sell, so Goldman Sachs advised them to hold off and there was no protest from 3i at all.”
3i is holding onto its investment and it would seem, from onlooker’s perspective, that it has made a smart move.
Agent Provocateur is thriving. In its most recent financial results, the retailer said that its operating profit rose to £9.6m from £6.2m in the year ending 29 March 2014, while annual sales increased by 36% to £53.1m.
This was largely driven by the opening of international boutiques in locations such as Cannes, Strasbourg, Toronto, Shanghai, Macau, Beijing and Sydney – taking the total number of Agent Provocateur stores to 100 in the financial year 2013-2014.
Since the year end, additional boutiques have opened in Chengdu, Los Angeles, San Francisco, Las Vegas, New York, Toronto and Berlin, and plans have been laid out to open 22 new stores across the globe in 2015.
Hogarth also sees major growth potential in L’Agent, AP’s diffusion line designed in collaboration with Penélope and Mónica Cruz.
“With L’Agent, we’ve got shops in LA, New York and London and we’ve got plans to open another six or seven this year around the world – in China, Australia, the US and the UK,” he says.
“I think that rather than saying to people that L’Agent and the rest of the business has got potential, we should actually realise that potential.”
So you see, business is booming, but this wasn’t always the case for Agent Provocateur.
In 2006, Hogarth received a call from Joe Corré, founder of Agent Provocateur and son of Dame Vivienne Westwood. He needed help with his fledgling brand, which was being run as a small enterprise with 14 shops at the time.
Hogarth agreed to come on board if he could buy a percentage of the company, which he did in October 2006.
“The brand when I joined was very small and it was making a loss,” he says. “It had amazing brand recognition, but to grow the brand and get it into the position where it could expand globally, it needed more discipline.”
Hogarth subsequently changed 90% of the production and increased profitability considerably.
“I used to own a company that was an M&S supplier and I was very into wearer trials, technologists, factory visits and all those things that M&S – in the 90s, anyway – was so good at,” he explains.
“I brought that into AP and it made a big difference; in just over a year we made £1 million in profit.”
When Hogarth joined Agent Provocateur, the retailer was selling other lingerie brands alongside its own creations, and its manufacturing process was being controlled by a third party.
“My view was that we should only sell Agent Provocateur in our shops, so I changed that. Also, we had no real control over the production of our product, which is what I was used to,” he says.
“So I went to some factories that I knew from my past and some new ones that we found. We began to deal directly we the factories, we sourced all of the fabric ourselves and inspected everything ourselves. We found that this not only made a big difference to the margin, but also to the quality and control that we have over everything.”
Agent Provocateur now has a big team of technologists that work tirelessly to improve the fit and feel of the product.
“It’s all very well having a sexy bra, and people may buy it, but if it doesn’t fit properly or it’s not comfortable then they aren’t going to buy another one, and that’s really fundamental to us,” explains Hogarth.
“To have any chance of expanding and making a global brand you have got to get the basics right.”
Hogarth laid the groundwork for a successful brand in the UK, before turning his attention to the rest of the world.
“We already had some shops internationally, but we really needed to get more brand recognition out there,” he recalls.
Agent Provocateur tested a range of different markets where the brand had sold well online, and opened concession stores before launching standalone boutiques.
“In Australia, we launched concessions in [department store] David Jones. Australia was our fourth biggest market online and now we have eight shops there. In fact, the shop in Sydney was our 100th shop in the world,” says Hogarth.
“We had a big party there. It was a long way to go, but it had to be done,” he adds, laughing.
Agent Provocateur’s biggest market is the US, with 18 boutiques and two more set to open in New Jersey and New York in the coming weeks.
“The great thing with Agent Provocateur is that it really travels well; we’ve got shops in the US and Canada, in the Middle East, in mainland China, and we’re all over Europe. I think that in many markets, when we open, we do really well because people know about us – they’ve seen us online or they’ve read about us,” Hogarth explains.
Asked whether he plans to expand the brand in Britain, Hogarth says: “We have 12 shops in the UK and I think that’s enough for the time being.
“The thing with Agent Provocateur is that it’s very much a big city brand and I think that with the seven shops we have in London we probably have enough.”
Despite his decision to call time on expanding Agent Provocateur in the UK, Hogarth has big plans for the brand’s diffusion line, L’Agent, both in terms of retail and wholesale.
“In time – and I don’t know how many years it will take – but ultimately there should be more L’Agent shops than AP shops,” states Hogarth.
“It’s not making a huge contribution to growth yet because we only have three shops, but it will do,” he insists.
“The wholesale side of the business is going well too, but we’ve been very selective as to who we sell to,” Hogarth adds.
“In the US, our three main department store partners are Saks 5th Avenue, Nordstrom and Bloomingdale’s, and we’re about to launch in Macy’s. In the UK, L’Agent is in Harrods, Selfridges and John Lewis. We also sell to ASOS, Figleaves and Net-a-Porter. L’Agent is the number one selling lingerie brand on Net-a-Porter.”
Hogarth had been contemplating the launch of a diffusion line for some time before introducing L’Agent in July 2013.
“It was partly to do with not wanting to wholesale AP and thinking about how we could grow the brand over the next ten years,” he says.
“I felt at the time that there was a gap in the market for our type of product – lots more colour, interesting shapes and things. L’Agent is also more accessible because it has a lower price point.”
The CEO met with sisters Penélope and Mónica Cruz after Mónica had starred in Agent Provocateur’s AW12 campaign.
“She and her sister Penélope were big fans of AP and she asked if they could both have a meeting with us. So I met with Penélope and Mónica and they said that they’d love to do something with us,” says Hogarth.
“I said we’re thinking of doing a diffusion range and they were so passionate about it that we agreed to do it. So that’s how it came about,” he adds.
“The best thing about it is that they are really involved; it’s not like we have a celebrity who has put their name to something to get a cheque. They travel around the world with us, they go vintage shopping to get ideas, they go through colours…even down to the labels and shop fit they are very involved.
“We’ve done two videos for L’Agent and Penélope directed both of them – she loves doing that. She works so hard and her attention to detail is incredible.”
Commenting on what the future holds for Agent Provocateur, Hogarth says: “The key thing is keeping the integrity of the brand and growing it at the right pace.
“We’ve got a lot of opportunities in fragrance – we signed a fragrance deal with Inter Parfums a year or so ago, which is doing really well and we’re about to roll out some new products. The products are sold in 40 countries around the world as well as in our boutiques.”
The brand also plans to introduce the first L’Agent swimwear range to buyers in November, for a July 2016 delivery into stores.
The capsule collection will feature 20 pieces, including bikinis, swimsuits and cover ups. There will be a variety of shapes to cater for different body types and a mixture of bright and classic colours, such as bold and navy, alongside printed pieces.
Hogarth says the success of AP swimwear has led the company to expand in this area.
“Swimwear is growing incredibly fast, from virtually nothing a few years ago to just over 12% of our business,” he explains.
“We opened our first AP swimwear concession in Harrods a few months ago and that’s doing incredibly well, so that something we might look at doing [with L’Agent] in the future as well.
“Swimwear is something Penelope and Mónica are particularly keen on – they love swimwear. We’re building it gradually, but I think it’s got enormous potential.”