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Frugi family prepares for a growth spurt

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Under its new CEO, Hugo Adams, and chair Julia Reynolds, ethical kidswear brand Frugi is positioned for rapid growth. Drapers visits the brand’s headquarters in Cornwall to learn more about its expansion plans.

Nestled at the back of an industrial business park in the coastal town of Helston is Cornwall’s soon to be not-so-best-kept secret.

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Spring 19 “twinning” collection launched in February

Ethical childrenswear brand Frugi has grown from the kitchen table of wife-and-husband co-founders Lucy and Kurt Jewson to a company worth £10m since it was founded 15 years ago, and is preparing to spread the word.

At its headquarters, a rabbit warren of creativity and colour, the 95-strong team are bustling with energy as Drapers arrives to meet the company’s recently appointed CEO, Hugo Adams, and chair Julia Reynolds.

The pair have ambitious plans to transform the already highly successful business into a global enterprise with a balance sheet to match – all while maintaining the brand’s authenticity. Their three-year strategy focuses on four key areas: growing awareness, expanding internationally, driving wholesale accounts and developing the ecommerce site. Category expansion is ongoing, and in February it launched its first non-maternity clothing as part of a parent-and-child “twinning” collection.

Ethical investment

Lucy founded Frugi with her husband Kurt in 2004, when, as a first-time mother, she struggled to find baby clothes that would fit over her son Tom’s bulky washable nappies. Both with a background in marine biology, the couple re-mortgaged their house, and secured a £30,000 bank loan to launch the brand, then called Cut4Cloth and only online, in just 11 months. The brand’s age range has expanded as Tom has grown. 

What attracted me specifically to the business was its product and ethics

Hugo Adams

Frugi now has 500 wholesale stockists in 28 countries globally and revenue is expected to be up 25% on the year. Turnover for this year is predicted to be £12.5m. Sales are split equally between wholesale and its ecommerce site, which launched at the same time as the brand, and it counts John Lewis and Zalando among its key retail accounts.

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Frugi’s only UK store opened at its Helston headquarters in January 2018. It is profitable and also provides staff with training to better support its 230 UK wholesale accounts.

In July last year, Lucy sold a majority stake in the company for an undisclosed amount to private equity firm True after Kurt overcame a prolonged battle with prostate cancer. As part of the deal Adams became as chief executive, allowing Lucy to relinquish operational control. 

Growth search

“I’ve always liked working at founder-entrepreneur brands, but I wanted to be at the early stages of something that could grow much bigger,” Adams explains. “I wanted to come and work for a business that was ready to grow really fast.” 

Our ethos has always been to prove that, if you want to make a difference, you’ve got to be profitable and successful

Lucy Jewson

He started his career in merchandising at the Body Shop in the 1990s, when founder Dame Anita Roddick was CEO, and spent five years in marketing and business development roles at Dyson while founder James Dyson was still heavily involved in the company.

Adams spent eight years at Marks & Spencer, starting as head of international strategy and business development in May 2008, then was chief of staff to then chief executive Marc Bolland, and latterly was director of property, store development and facilities management until November 2016. He left his most recent role as executive board director at Superdry to join Frugi in August last year.

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Frugi spring 19

“What attracted me specifically to the business was its product and ethics,” says Adams. “The way in which the product is manufactured and the innovation that goes into how the product is designed is great.”

Frugi combines playful patterns and quirky motifs to create “clothes that kids want to wear”. Each collection is inspired by residential trips taken by the brand’s design team, most recently to the Isles of Scilly. Wholesale prices range from £3 for a pair of socks to £30 for outerwear.

Reynolds joined as chair in October, bringing experience from her former chief executive roles at luggage company Antler, outdoors retailer Blacks and lingerie etailer Figleaves. She was also previously buying and merchandising director at Tesco, and worked on the launch of its F&F clothing line in 2001.

“What is happening in this business as far as I’m concerned is exactly what needs to be happening within the market,” she enthuses. “I felt that the people here were good people with strong values and ethics, and that is something that is really important to me. It’s something that is lacking in a lot of retail businesses.

“They allow people to be themselves – something that hasn’t been a high priority in retail over the past couple of decades.”

We are creating a mini-series on the people that make our clothes, from the organic cotton farmers to the workers in the factories

Hugo Adams

Both Adams and Reynolds jumped at the chance to transform such a well-oiled business with a strong infrastructure into an international powerhouse. However, their approach is measured and considered.

Sustainable origins

Frugi’s ethos is rooted in its sustainable approach to children’s clothing. As one of the first brands to be Global Organic Textile Standard (GOTS) accredited, it is a market leader. It uses 100% fair trade organic cotton for its garments and recycled plastic bottles for its outerwear. It manufacturers in Turkey, China and Portugal but mostly in India, where the organic cotton is grown.

“We have a lot of competition and copy cats behind us, so we always have to push that innovation all the time to make sure that we’re different and innovative, and doing things differently and authentically,” says Lucy. “Our ethos has always been to prove that, if you want to make a difference, you’ve got to be profitable and successful because then other people will see that it can be done.”

The brilliant thing about this business is that you don’t have to make anything up – all you have to do is tell the story 

Hugo Adams, Frugi

Products are designed with longevity in mind. Rolled-up hems and collars ensure parents can get the most wear out of items as their child grows, and the 8,000 members of the “Frugi Family” – a private Facebook group launched two years ago – form a simple resale market.

Frugi spring 19

“The irony of it is, that where everything is about sustainability at the moment, lots of companies are trying to play catch-up,” says Reynolds. “For Frugi it’s already here, and has been for 15 years, and so is genuine and authentic.”

For stockist Jo Webber, owner of independent Jo Amor in Tiverton, Devon, its ethical approach is what makes the brand so attractive: “We’ve had Frugi for several years now and they’ve been building it a lot. We like its values and use of organic cotton and that the fabrics are still so nice.”

The challenge now is to get that messaging out beyond its loyal customer base via digital marketing, social media and word of mouth.

Frugi signed with digital marketing agency Crafted in November 2018 and has trebled its online marketing spend over the past four months compared with last year. Most of this spend will go on pay-per-click marketing, search engine optimisation (SEO) and social media, targeted . This will be targeted at three customer demographics: the “environmentally motivated”, “design led” and the “gifting community”.

Telling stories

A new content series and push on social media will also increase transparency.

“One of our key priorities is to be the brand our customers want us to be,” says Adams. “The content series is about showing customers what we do, how we do it and why we do it.”

In January Adams spent time in India following Frugi’s supply chain from the organic cotton fields and through every stage of the manufacturing process.

We are creating a mini-series on the people that make our clothes, from the organic cotton farmers to the workers in the factories 

Hugo Adams, Frugi

“I took our videographer with me and we are creating a mini-series on the people that make our clothes, from the organic cotton farmers to the workers in the factories, as well as showing the processes that contribute to our GOTS accreditation,” Adams explains. “The series will be used on all our channels as part of an overall strategy to reinforce our values of honesty and transparency.

“The brilliant thing about this business is that you don’t have to make anything up – all you have to do is tell the story and make people aware of how it all works.”

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Frugi spring 19 post-pregnancy clothing

The brand is also keen to use social media for its intended purpose: to have a conversation with customers, rather than trying to market or sell to them.

The Frugi Family Facebook group is an invaluable resource to Adams. He looks at it “at least two or three times a day”, and considers it “market research that you can’t buy”. The brand turns to the group for product advice and even uses the members’ children as models for marketing campaigns. 

This, alongside the brand’s blog, aims to create an authentic voice by providing parenting tips and showcasing the design stories behind new collections.

The approach promotes more people buying less, rather than fewer people buying more – an ethical and sustainable plan for growth, Lucy tells Drapers. 

Each collection is inspired by residential trips taken by the brand’s design team, most recently to the Isles of Scilly

Wholesale push

Growing its wholesale base both domestically and internationally will be crucial to reaching more customers. While driving bigger key accounts is a focus, Adams recognises the importance of its independent stockists, which “Frugi will never move away from”.

The short-term focus for independents is to expand into London and south-east England, where Frugi is somewhat lacking.

“Generally, they are the one kidswear store in a town, where people gravitate for advice and have great relationships with the owner,” says Adams. “That’s a really great customer base for us that will continue to grow.”

“I have always admired the way [Frugi]  have built on their success and always appear to be moving forward with new ideas,” says Julia Bird, owner of Fowey-based independent Birdkids, which stocks Frugi. “We love that the designs are reliably practical for active kids and everyday wear – it’s not often that the brand is loved equally by children, their parents and grandparents.”

Global reach

Frugi’s biggest international market is Germany, where it has 165 stockists and is sold via etailer Zalando. However, with no presence in the US, Asia and limited reach in the Middle East, Adams relishes the fact that the brand has “not even scratched the surface of its global reach”.

Over the next three years he plans to at least treble international sales, which currently account for around 45% of the total. Under a strategy of “focus, drive and explore”, Frugi will expand in its existing scalable markets, target growth in markets where it is under-represented and explore new markets.

Culturally and creatively there are so many good ideas that the challenge is how we channel those rather than doing a hundred things superficially

Julia Reynolds, Frugi

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Frugi spring 19

An easy way to achieve this is by expanding its ecommerce capabilities. Adams explains that although it sells to 60 international markets online, this is done through an ecommerce local payment solution, so Frugi does not have a local transactional presence in any market outside the UK.

“There’s lots of opportunity to make it much bigger, but our first priority is to optimise our existing site,” he says. However, as with all areas of the strategy, Adams and Reynolds are taking a “step-by-step approach”.

“It’s not broken,” he says. “What we’ve got there at the moment works well, so it’s a sort of test-and-learn approach to optimising what we’ve got, as opposed to needing to change things fundamentally.”

People powered

Adams and Reynolds agree that the cornerstone of Frugi’s success is its staff and their unrestricted creativity. On a tour of the headquarters, it is hard not to feel inspired when weaving through each team – this is evidently a brand that champions its people.

“As a manager, it’s relatively easy to take creativity, and channel it in a way that is process orientated and systemised,” says Adams. “What’s really difficult to do is to take an organisation that is process driven and drive creativity out of that.”

As a manager, it’s relatively easy to take creativity, and channel it in a way that is process orientated and systemised

Hugo Adams, Frugi

Staff are not limited to their job remit but are encouraged to explore areas of the business through lunchtime seminars and training. Frugi’s “fun committee” organises team events, often involving fancy dress, and the spirit of the office is one of an entrepreneurial nature, Adams enthuses. 

Reynolds adds: “We’re in a really nice position where culturally and creatively there are so many good ideas that the challenge is how we channel those rather than doing a hundred things superficially.”

Under the new management and with True’s full support, Frugi is set for a period of exciting and seemingly boundless growth. It is a brand with a lot to shout about, and is unperturbed by its competitors and the dismal state of affairs on the high street. Cornwall’s secret is ready to be let out.

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