Loaf founder Charlie Marshall on growing his company on average 80% each year
Bed brand Loaf has seen average annual sales growth of over 81% over the last three years. Expecting £20m turnover this year, the company was ranked the UK’s 40th fastest-growing company in the Sunday Times Fast Track 100. Peter Simon, founder of Monsoon & Accessorize, is an investor.
Now founder Charlie Marshall thinks he’s got what it takes to grow Loaf into a £100m company. How will he do it? We ask him for answers:
Q. Tell us a bit about your background and how you set up Loaf?
Having lost a whole Saturday trying to buy a bed, I decided to make the shopping experience as hassle-free, affordable and as speedy as possible. So two years, 187 mattress factories and some seriously comfy beds later, Loaf (Loaf.com) was born. I think too much choice can be really stressful, especially with shopping, so the idea is that we’ve done all of the testing so that the customer doesn’t have to. Customers can come and loaf around on our beds and sofas and see the products up close in our Notting Hill HQ if they want to.
Since launching five years ago and originally being a bed specialist, we’ve become a one–stop shop covering every room in the house – with sofas making up a large part of our business. Customers can now ‘Loaf’ all of their home. This month we’re expanding again to include home office furniture, kitchen storage, tableware accessories and console tables for the first time. And a load more comfy beds and sofas too…
Q. How did you fund the business?
I set up a food manufacturing company called Primal Soup in the late 90s with a business partner. It became the UK’s number-one premium fresh soup producer for the likes of Pret a Manger, Pizza Express, Caffe Nero and Selfridges, among others.
The sale of the business in 2005 allowed me to fund Loaf’s £350,000 start-up costs – we became profitable in the first three months of trading.
Q. How do you attract customers?
Reduce, reduce, reduce! I’m constantly banging on about the three Rs. This involves working concepts through again and again to make them as simple as possible. Stripping back an idea, design or functionality to its core applies to all facets of the business so that the entire shopping process – from that first click onto the website to receiving the goods – is as easy as possible for the customer.
The website is constantly evolving and the potentially complex functionality has been simplified as much as possible to make it incredibly user-friendly. The site needs to be so simple that even my mum can use it.
Our rapid growth has also been the result of increasing the product range (with sofas becoming a significant contributor), ramping up press and Google advertising, and the introduction of direct marketing.
Q. How did you get Monsoon founder Peter Simon to invest and how much did he put in?
We were on the hunt for an investor and by chance Peter came along at the right time. The chemistry worked. Fortunately we were in a very secure position financially and although it wasn’t vital to our growth, the investment means that we can now really ramp up our growth plans even more. We’re both fairly private people so I’m keeping schtum about the amount!
Q. What’s that one key piece of advice you’ve got from him?
I wouldn’t say there was one shining golden nugget of advice but more of a general sense that I liked Peter’s business mentality and what he was about. We share similar values and an approach to business. My journey so far has not been a million miles away to Peter’s, but he has 40 years experience on me. We both started out in Portobello (back in my Primal Soup days), having offices in Portobello and working with manufacturers in the Far East.
Peter has grown two of Britain’s most successful retail names. His guidance and pearls of advice will help ensure we achieve our goals of filling the gap in the UK market for laid-back furniture and becoming a household name.
Q. Do you manufacture the mattresses? If so, where do you do it?
Our mattresses are made on home turf by our lovely chaps in Wiltshire. After visiting more than 180 mattress and bed factories I found the hands-down winner in Blighty. It’s a plus that we get to support British industry whilst offering insanely good quality product to our customers.
Q. What do you need to do to become a £100m company?
To enable us to grow, we are continuously reinvesting cash back into the business. I believe that the future of the online home industry will see physical spaces running alongside online offerings. The plan is to roll out a series of out-of-town retail destinations called ‘Loaf Shacks’, starting in London and the South East.
At the moment we have a brilliant team of 40 employees (or ‘Loafers’ as we like to call ourselves) and this is to grow to 60-strong over the next few months.
Q. How do you plan to increase turnover?
We’ve grown consistently at 80% per year over the last three years. In 2013/14 we’re on track for sales of around £20m, our fifth year of trading. We were recently listed as Sunday Times and Virgin Fast Track 100’s 40th fastest growing company in the UK, coming in top for homeware brands. It’s our aim to become a household name and to get there we’re focused on just more of the same really.
The Loaf Shacks will play a big part in our expansion along with increasing of our product range. We’re currently working through the challenge of growing from a fairly small company into a medium enterprise without losing any of the brand’s magic and integrity. The priority is to maintain the small-business mentality that Loaf was built on. To remain true to our open, friendly and personal approach.
Q. What’s your stake in the business?
I owned the company outright from day one and now Peter’s joined us with a minority stake in the business.
Q. Have you thought of international expansion?
Yes, it’s on the cards but we’re a few years off yet. The UK market is enormous and although we’re building a strong and loyal customer following, we haven’t even scratched the surface. We want to get it right here first and do what we’re doing really, really well on all levels. Once we’ve done that, we’ll look to expand into other markets.