Tue Nov 21 2017
You might not have heard of ProSwimwear, but it’s time to take note. Because whether you’re a keen swimmer or not, these guys know how to run a successful business. Founding Directors Mike Capstick and Gulten Capstick are what you might call entrepreneurs. Both come from big business backgrounds and both have worked hard building up a brand, which started as a very small operation in 2007.
Impressively, they now have around 40% market share, outstripping two rivals who were (not long ago) significantly larger than ProSwimwear. Turnover for the last three years proves they’re most definitely not swimming against the tide…
In 2015, turnover was £4m.
That grew to £5.6m in 2016.
And in 2017, it was £7.6m.
So what’s the secret to swimwear success?
To find out, we spoke to Directors Mike and Gulten, and ProSwimwear’s eCommerce Manager, James Graham.
In 2007, Mike and Gulten spotted an under-served market.
“We saw an opportunity in what was quite a sleepy market, with very few technology players. Most of the competitors just had glossy catalogues and gala shops. They had websites but they were basically just the glossy catalogues on the internet with no option to buy online.
"We had absolutely no intention of doing glossy catalogues or galas. Instead we set out to build the best website and create the best shopping experience for customers."
Mike Capstick, Director of ProSwimwear.
So for ProSwimwear, there was no warm-up, just straight in to the race. They knew the market, spotted the opportunities and set out to shunt competitive swimwear into the fast lane.
For many retailers, starting small seems to be the only way. But while ProSwimwear began as a lean, two-person operation, they made sure to stock a large range of competitive swimwear and equipment from the very start.
With no external funding, this might have seemed like a risky strategy to anyone watching on at the time. But they knew their market, spotted their opportunities and made a clear plan. What this decision did was show ProSwimwear as a serious, professional business, in it for the customers. And it soon paid off.
The business is now Speedo’s number one competitive reseller in the world. They sell the Speedo race suit in eight exclusive colours, manufactured especially for ProSwimwear’s customers.
The competitive swimwear market was crying out for more choice, a better browsing experience and an easier way to buy. ProSwimwear had a laser-like focus on this and competitive swimwear from day one.
They not only tried to stock a very large range, but also to stock as many brands as possible and to sell it quickly. The website was at the heart of that plan.
“We were the first to introduce size charts within each product page. Even to this day, on other websites, customers have to leave the product page, go off and find the size chart, then navigate their way back again. It’s simple things like simplifying the customer journey and experience that are working for us.” – Mike Capstick, Director of ProSwimwear.
The focus is almost solely online, which means the user web journey, right through to the eCommerce payment gateway solution is crucial.
One big hurdle the business had to overcome was 3D secure – an additional layer of security against online, card-not-present fraud. Thinking they were protecting themselves, ProSwimwear asked their then payment provider to install it. But they saw a dramatic drop in sales once it was up and running.
Turns out the system wasn’t sophisticated enough to recognise when there wasn’t 3D secure available for a particular payment type, so it was rejecting those sales. The switch to a Barclaycard online payment solution saw the successful introduction of a smart, intuitive 3D secure system, which doesn’t reject sales on the basis of a lack of 3D secure alone.
ProSwimwear does sell offline, to swimming clubs. And the future might well see the business diversifying further offline and into swimwear and equipment for the fitness and leisure markets.
It’s no secret that running a start-up is very different to running an established SME. But what has to change in order to make that leap?
“The biggest change for us, as directors, has been the slow move away from us as the two people who do everything, to managers of other people who run the business day to day. I’m not a jack of all trades any more.
“When we first started and had five employees, every single one of us could go and pick products and answer the phone. Now we’ve got a customer service team and a dedicated web team, for example.
“It’s a big benefit for me. Some people who’ve built a business can’t let go of it. I’m actually looking forward to letting go a bit!” – Mike Capstick, Director of ProSwimwear.
So a huge part of growth is about recruiting and retaining talent, as well as recognising when you need to form partnerships and bring in expertise from outside.
“To actually really grow as a company, you’ve got to put people in place. We can’t watch everything as the business gets better. You’ve got to have managers in every department who you can trust to run things. That’s what happening now and ProSwimwear is seeing huge benefits from that.”
Gulten Capstick, Director of ProSwimwear.
ProSwimwear has been no stranger to cash flow difficulties, although things are better now and the business credit rating is strong. That simply came about from high growth rates. James explains.
“If you’re growing by 30% you basically believe you’re going to continue to grow by 30%. So you’re ordering in products at that growth rate and sometimes you might get it wrong. You might order too much of one product and not enough of another.
“But you take that risk all the time. That product’s coming in. You’re paying for it, believing you’re going to sell at that growth rate. Sometimes you have very big bills from manufacturers and you’ve got to wait for the cash to build up to pay them.”
James Graham, eCommerce Manager at ProSwimwear.
This five-point plan has paid off. ProSwimwear was named in the FT 1000 Europe’s Fastest Growing Companies. Within that, they were the 13th highest-ranking retailer. You only get a shot at that impressive leader board if you can prove sustained growth year-on-year for five years. ProSwimwear grew almost 30% YoY between 2012 and 2017. And to add to the impressive list, check out how Mike and James saved £24k in merchant fees in just 12 months.
This is part of our Mindset & Planning series – content dedicated to practical advice for SMEs when it comes to getting in the right mindset for business growth. Other articles in this series include:
SMEs: 3 reasons why payment providers are crucial for growth
7 reasons why cash flow is more important than profit
11 social media tips that all small businesses need to know
11 great podcasts on productivity