Hotsprings CEO Joanne Goldman is helping to return the iconic Lover brand to form. This is an exclusive extract from our May edition - to read more content like this, subscribe here.
Hotsprings acquired Lover in December, after it went into administration. How did it all come about?
I have personally been a fan of the Lover brand since I immigrated to Australia 15 years ago. Co-founder Nic made contact with me through LinkedIn regarding a potential partnership and there was a definite synergy from the first time I met with both co-founders Nic and Susien. I was immediately interested and we had a constructive discussion but the business was placed into voluntary administration before anything came to fruition. Nic provided the administrators with a shortlist of companies that may be interested and Hotsprings was one of those. We moved really quickly as we had previously met and done some due diligence, and this worked to our advantage.
What was the process for acquiring the brand?
Once Lover went into voluntary administration, Hot Springs had the opportunity to place an offer on the business. The administrators did a thorough job of marketing the business, and assessed all the bids in order to find the best outcome for the creditors and the staff as well as ensuring the business had the best chance of continuation. There were over 20 expressions of interest and five offers made. Our offer was accepted as providing the most successful outcome for all parties.
What was it about the brand that appealed to you?
When I started to do my due diligence through my network in the industry there was so much positivity and love for the brand, a desire for it, from retailers and industry figures. Nic and Susien had not put a foot out of line. They were highly respected, a rare thing to find in a brand that is 15 years old. People have such an emotional tie to the brand, its speaks to them. There is authenticity and soul. We all agreed at Hot Springs, that if we were to acquire the brand, we needed the whole team and most importantly, we needed Nic and Susien, who are the essence of the brand.
What were the early stages in merging the acquired brand into your company?
When we acquire brands, we immediately ensure and it is critical that we understand the inventory and forward orders and that they are captured in our system accurately and physically in our warehouse.We also met with the team, shared our vision with them and reassured them of their job security. We wanted everyone to buy into the fact that we were all going to be working together to get the business back to the strong position it previously had held. We wanted them to move into our premises as quickly as possible and so two weeks later they were in. Immediate concerns around cash flow and the supply chain (vendor base) had to be attended to ensuring we did not delay the critical path any longer than the administration process had done. The acquisition happened just prior to Christmas and Chinese New Year and so the integration of the team and onto our system, had to happen really quickly.
What are the major changes you've made so far?
We relocated the company into our offices along with our other brands. Each brand has their own division and space. It makes for a great incubator of talented people all under one roof. Re-establishing the relationships with retailers and working closely with them to manage current stock, future orders and brand direction with the acquisition. We have also been working on our retail footprint and workshopping the true essence of the Lover brand, it’s DNA, and ensuring its relevance for the future. The Lover and the Hotsprings management team all needed to be aligned with the strategic vision of the brand. We also travelled to the US in February to show AW 18 in an incredible studio in Soho, where the collection was well received.
What were the key challenges?
We were on an incredibly tight deadline. We had a few weeks to on board the staff over the Christmas period, upload all the inventory, understand forward orders, deliver stock and ensure we would receive the salesman samples prior to our trip to the US end of January, as all work in progress had been placed on hold during the administration process. Making sure that the team were engaged and positive was our priority. They had to quickly learn new systems, new approval procedures. They had all been through an emotional roller coaster, which we were very sensitive to, but they all rose to the challenge, and everyone at Hot Springs has nothing but praise for the team and how they have managed the transition. We are feeling very optimistic and positive about where it is all heading and how much we have achieved in such a short space of time.
What was the most rewarding?
The renewed energy that is coming from Nic, Susien and the Lover team. Our support and guidance has allowed everyone to focus on what they do best, our goals and where we all want to take this incredible brand. There is great synergy between everyone.
Have there or will there be any major changes in the back-end supply chain?
No. One of the great achievements of the acquisition is that we have been able to reassure vendors with payment terms and continue with the same factories and contractors, both local and overseas, that Lover previously worked with. The high level of quality of the product will be maintained.
What about the front-end?
Nic and Susien will have the same creative freedom they always had, but now with our support. We want to remove as much of the admin and financial pressure from them so that they can focus on design, marketing, online and retail. We can already see the creative spark emerging after what has been a challenging time for both of them.
Have you started to see any promising results?
Apart from the positive energy from the team. We have doubled our online sales over the last two months by providing resources to the team to streamline processes and give them more time to concentrate on problem areas. It is a key area of growth potential in the business. It’s very exciting. We received international orders from our US trip in January and we are investing in expanding our distribution channels in the US. We have also secured two new retail locations opening in the second half of this year.
What are the plans moving forward?
Similar to our other brands, the focus for Lover will be a combination of strengthening our online channel through marketing, quality product and investing in digital. A robust retail strategy, cherry picking locations which are ideal for the brand's DNA and customer base. Invigorating wholesale sales, by focusing on design and product. Reconnecting with the Lover customer and exciting her with newness.