The Thoughtful Agency's Prav De Silva talks to CSB Brands founder Paul Edwards about vertical success.
Blood and business don’t mix, the old saying goes.
CSD Brands founder and creative director Paul Edwards never got the memo. His company, which operates 11 Neverland Store locations and has a wholesale brand portfolio spanning 15 countries, is scattered with both.
“We have seven family members in various departments,” Edwards says. “It’s the passion and focus of not only our family, but everyone in our company, who believe in us and what we are doing that counts. Our best decisions are always based on the staff as they are the ones who will take you forward.”
It was the year 2010 which proved pivotal to this recruitment drive, with the business now employing 80 staff. What began as an indent selling model to streetwear retailers diversified into a vertical retail operation.
“When we began wholesaling our brands, major retailers hadn’t started going vertical, online shopping was still in its infancy and social media was non-existent,” Edwards says. “The tide was changing and we were able to tap into that market.”
For Edwards, Neverland Store was first and foremost a space to showcase products and styles not necessarily backed by alternate wholesalers at indent.
“It’s extremely frustrating as a creative and product developer when people don’t believe in your vision. Neverland Store is our platform to showcase our vision, the full story as it was designed, not just the safe styles” he says.
“Our wholesalers need to play it safe; they are accountable to budgets and sales targets and may not have the flexibility to take risks. We couldn’t sell 20 pairs of our hero style at indent, but we sold over 100 in one night at Neverland Store.”
“Going vertical gives you the platform to showcase the product you believe in when the big players don’t. Then you know if you’re crazy or if you’re a genius.”
The seed for further business diversification came after a trip to the United States in 2010.
“I noticed how accessible brands and products were because of how quickly they had embraced social media and online shopping,” Edwards explains. “At this stage we had one store and were wholesaling to 300 doors around the country.
“I wanted to connect not only with new customers, but also with our wholesale accounts.
“We launched neverlandstore.com.au in 2011 with a focus to showcase our entire product line from all our brands, plus gain insight on where our customers were and how they felt about our products.”
This eCommerce operation is now accountable for $3 million in turnover, Edwards says. It has also played an integral roll in the company’s retail rollout.
“With retail sentiment headed in a decline the opportunity of cheap leases became available, so with the insight we had gained from our top performing geographic areas we could target certain areas we knew our customer would be.
“Over the past five years we have opened up 11 stores in these point pointed areas."
While social media is a great way to measure a style’s consumer relevancy, Edwards believes “nothing compares to the insight of what people will spend their wage on.”
The best way to gauge design success is always the sales data.
“Having the vertical business means we can drop a style, have it sell out within a day and respond in hours. We can have a repeat or update of the style in-store and online in three to four weeks. Neverland Store is how we listen and respond to our customer.”
That is not to say a vertical model is without challenges, Edwards adds.
“Retail is by far the most challenging part of our business. Store design, operations and the customer experience are our biggest ongoing difficulties. Online shopping has cemented itself as a part of our lives now, and while retail is showing signs of a comeback, it’s not consistent.
“The constant challenge is giving consumers what they want next, in new ways, before they’ve imagined it. We’re building a business for a generation of consumers who need more.
“If online shopping is about convenience then retail must be about the experience. Our challenge is evolving this business on a self-funded budget to perfect that dual offering of convenience vs. experience.”
The group’s wholesale arm, which includes brands such as Kiss Chacey and Sushi Radio, has also grown since its inception. Retail clients now include the likes of Urban Outfitters, Nordstrom, Myer and Glue.
The key is diversification and risk-taking, Edwards explains.
“Our brand stable development approach was a deliberate one, with each new brand acting as insurance for its predecessor. I knew I wasn’t brand loyal, so I didn’t demand that from our consumer. We’ve made more mistakes than we have successes.
“In the early years its was unrealistic manufacturing costs, the cost of being self funded, tying money up in stock and being unable to move it. Being overstaffed or understaffed have both hurt us at various stages, and I don’t think its behind us.
“Our company is still very small and we have the flexibility to make mistakes, try new things because others can’t or are too afraid. If you want to do anything in life you have to just do it.”