Nine years after launching on eBay with a few palettes of stock, Lingerie Outlet Store has grown into a multi-platform business with 10,000ft2 of warehouse space. Speaking from their offices in Swindon, founder Clare Haines and business partner Melissa Burton talk about how they’ve scaled up the company and their future ambitions to become a national retailer.
It is generally accepted that heavy investment from third parties and exposure in the media is the fuel that makes brands fly.
But that’s not always the case. Sometimes, brands burst into our lives with little or no apparent support, as was the case with Lingerie Outlet Store.
In nine years, it has grown from a small business operating out of the home of former sales woman Clare Haines into a multi-platform retailer with 23 staff and a 10,000ft2 warehouse space in Swindon.
Together with her business partner Melissa Burton, Haines has grown the company organically, with no external investment, and by the end of this financial year, Lingerie Outlet Store is set to make £8m, up from £51,000 in 2009 and £3m in 2016.
Here, the partners explain the reasons behind this organic growth and the challenges they faced in breaking down stigmas when it came to selling on eBay.
How did the business first come about?
Clare: The business started in 2009 from home, where I bought £15,000 worth of Triumph lingerie. They didn’t want to sell it to me at first – it took them three months to sell it to me. Later on, I took four palettes of stock from Gossard and some more stock from other brands. Within a year, I got a small premises, which was a really big move for me, and I took on a member of staff. Within two years I moved here and we had a bricks and mortar shop. It’s grown very quickly and organically. We had a 2,500ft2 warehouse space and now we have 10,000ft2.
Melissa came in one Sunday to help me sort some stock out. We started talking about her joining the business and in August 2014 we became equal partners. What she brings is all the finance and operational expertise.
Melissa: I’ve always worked for blue chip companies and I had just left a telecoms company. So what we did then is take a step back and look at our buying strategy, our operations and cash flow. And then we decided to build our foundations for growth. We overhauled all of our software systems so now, in every sense, apart from having robots, we are state of the art. You have to do that to succeed in internet selling because your customer feedback is in your face, so we ship on time, we dispatch on time and we deal with customers on time. So although there was a little bit of trepidation from some of the manufacturers originally around selling on platforms like eBay, they do appreciate that we have excellent customer feedback.
Why did you launch on eBay and not your own website?
Clare: Because eBay give you all the tools you need and all you need to do is follow their rules. I’d worked in advertising before and so I understood the construction of putting together an advert or a listing. But what I didn’t understand was all the marketing that goes with it. They do the marketing for you and they get the customers for you – you don’t have to go out and find your customers. That comes later, when you’ve learned how to do this. So it’s just about climbing the ladder and it’s a learning curve that you go through very organically. They also only give you a visibility that you can accommodate.
Melissa: Our accountant said that you are going into a bottomless pit when you launch a website because you could throw as much money as you like at Google ads, but when you are up against Bravissimo and Figleaves, who do you think has a bigger advertising budget? It’s not easy to differentiate yourself and make a name for yourself in lingerie. We are doing that now but that’s because we’ve got the business. But without eBay, where do you get seen?
Where did the idea come from to start selling lingerie?
Clare: I was in sales first and I was always the best sales person wherever I went. At one point I was selling to lots of businesses who didn’t have the first clue about business and realised that I should be running my own company. I decided to take the summer off, as I’d saved a bit of money, and then Woolworths went bust, so I bought some Woolworths stock and other bits and pieces. But I wasn’t making the margins, so I thought, why am I buying from clearance companies? They are making the cut. So I literally picked up the Yellow Pages and searched for manufacturers in Swindon and Triumph came up. At the time, it was the recession so I thought I’d buy clearance. I wasn’t even thinking about buying full-price stock. So I asked them if they had any clearance and was absolutely shocked when they said yes because why would you clear a bra? So that’s why I got into it and it was one of those moments where I thought ‘there’s something in this’.
Melissa: Now, we sell as much full price as we sell clearance. For every single one of our brands we sell full price and we don’t sell clearance for everybody.
When did you launch your own website?
Melissa: Within the first year. The website has been around a long time, but it has been updated every year. One of the reasons why we took quite a lot of staff on this summer is to have people working full time on the website.
How did brands react when you first started selling clearance?
Clare: That’s a really interesting question because it took all my 20 years of sales experience to really sell to Triumph because nobody at that point wanted you to sell on eBay. So in the very, very early days it was difficult, and that’s why we opened the bricks and mortar shop – that was the only way we could get Freya and Fantasie at that time.
Melissa: The shop was beautiful. You can still see where we used to hang everything. We’ve always been upfront and honest about selling on platforms and the big revelation for the brands was that other companies weren’t – they were selling on platforms but not being honest about it. Most weeks we will get a manufacturer telling us that somebody is buying our stuff and selling it without being honest about it. We have never lied to our customers. Some brands have one name on eBay and another on their website, but we are Lingerie Outlet Store on all platforms. There was a stigma about eBay, but not anymore.
Did you ever think about opening another bricks and mortar store?
Clare: The best thing about having a bricks and mortar store was the people and getting them into the right size. That was the brilliant side of it – making people smile – but unfortunately that wasn’t the money making side of it at that time. Would I go back into it? Yes, 100%. There’s a unit just opposite Swindon train station and I had my eye on it for a long time. It wouldn’t be big enough for us now, but I loved the idea of it. The stock would come from the warehouse, people could buy full-price stock and they could get a fitting. I had visions of having 10 fitters. Maybe one day! But on the other hand, women do phone here and our customer service team talk to them for 10-15 minutes, advising them on fit and styling. We have a no quibble returns policy and free postage. I think we have a very personal touch and I think that differentiates us from the rest of the market place.
Melissa: And that’s why our next area of investment for 2018 is all around dealing with customers and making it a more personal experience. Yes, people like going into shops and being fitted, but by the same measure, people do like to buy and try and home. Personally, I don’t try anything in store, even clothes. Some retailers would make a killing if they sorted their lighting out. So yes, bricks and mortar would be lovely, and it’s working brilliantly for Bravissimo, but it’s a massive investment. Short-term for us it’s about improving the online experience and making it more personable.
Your business is projected to raise £8m this year, up from £51,000 the first year. How have you been able to achieve this?
Melissa: What we did is we sat down, looked at our buying strategy and came up with a very clear business plan and got on with it. We work very hard and we focus on building good relationships with people. We have had some moments where it has been very difficult because running your own business is tough. When I came here, I thought I’d be working a few hours a week, but when you run your own business you have all the HR to do, all the accounts to do – corporation tax, inland revenue, pensions – as well as health and safety. You’re also responsible for all the strategy and all the decisions. But it works out because we plod on and get on with it. We had a HMRC audit last year because we had grown so quickly and they wanted to understand our business. The lady that came to visit us was so complimentary, she said ‘you have that magic’. That’s what we do with all our manufacturers – get them to come and visit us to see how the business runs – and they are always impressed.
Have you made a profit?
Melissa: We make profit, but we reinvest it into the business and that’s how we have grown. We haven’t had any investment from external companies. So all of our double-screen computers, all the scanners, all the stock – everything we have we reinvest into this company because that is our short-term strategy. So we make a profit, but we are 100% committed to growth right now. We believe we are the largest independent in the UK now. In some instances, we believe we are selling more than the nationals on some brands where we have heavily invested. We want to be synonymous with a national – that’s where we want to be – and in order for us to get there we need to grow, so we are not taking all the money out and living the dream.
Where do you want to be in five years’ time?
Melissa: I think we will have stabilised as a national business. We have identified huge growth areas and we want to push into those now. And we want to be the go-to place for your lingerie needs. We do a tremendous amount of cross-brand selling because we have that diversity of styles available to meet all lingerie needs.