This article previously appeared in the Cross-Border Magazine, Edition 1, June 2016
The international team, learning and having fun are the personal drivers of entrepreneur Masud Rabbani, a man with German, Persian, Austrian and Spanish origins running a young luxury swimwear company in New York. ‘Gentleman by nature, rebellious by choice’ is the slogan for Retromarine, selling high-end swim trunks to the fashion-savvy man who doesn’t like obvious labels. Rebirthed only a year ago, the brand has leaped in sales and is on the brink of expanding into five European countries, as well as Mexico and the United Arab Emirates. A story of rebirthing, growing, strategising and outsourcing parts of the value chain.
The story so far
Five years ago, Juan Pablo Jaramillo, Masud’s business partner and founder of Retromarine, was working as a chef in Miami and spent all his money on cool swim trunks because he lived at the beach. There was not much on offer in terms of specialised swimwear for men. One day, he thought he might be able to do it better than the existing brands.
Masud came across the link to Juan’s web-shop on a mutual friend’s Facebook page and ordered a pair of shorts. After six weeks, instead of getting his order, he received an email saying his size was out of stock. One month later, he got another email with a discount code saying the swim shorts were now back in stock. He showed the site to a couple of friends and they ordered six more pairs, but the same thing happened again. “I emailed the guy and said: ‘Hey man, maybe it’s time for you to stop selling stuff you don’t have,” laughs Masud. He received a free pair of shorts and the two men ended up emailing back and forth. Masud, who was working at Google at the time, was looking for a career change and just needed a push in the right direction. He thought that Juan was on to something good.
“We are now over the hump”
After half a life in technology, Masud decided to join Juan’s venture in luxury fashion and embark on a journey of completely rebranding Retromarine: Sales were shut down, the infrastructure was reinforced, and they made sure the channel strategy and supply chain were ready to be fully functional. “That was the ground work of re-setting up the company. We are now over the hump. We are in a position now to talk to everyone. When we started, we couldn’t even deliver 10 complete orders on time. Now we can fulfil multiple orders to department stores without problems, including Neiman Marcus,’’ the proud entrepreneur tells us. “There was a lot of behind-the-scenes work in the past year. Now we have a foundation where we can be confident about being able to do business, and only now we can start really building a brand.”
In order to realise their ambitious goals, Juan and Masud successfully financed their company twice: “Launching a business in luxury fashion is a very expensive thing to do. We are well-funded now and we are growing fast in the US both online and offline, which is why we took the decision to launch in Europe with Salesupply. Alongside that, we will launch in Mexico and the UAE.”
Instagram and department stores
Retromarine builds on a sound strategy of online and offline sales and brand building. According to Masud, it is the right strategy in the brick-and-mortar world that will enhance brand performance in a market: “Say no to big orders until you know you can fulfil them and work really hard on the small orders. There are a couple of nice stores that will never make you big money but they attract the right people, including buyers and PR people from big department stores, editors, and bloggers. Such shops include ‘Shop Basico’ in Miami or ‘Harrison’ in Alabama. Proper gentlemen who dress nicely go shopping there. Making an impact with the right smaller accounts can make sure that the right people become aware of your brand.”
Online, the entrepreneur believes in the power of social media platforms such as Instagram. “In the fashion industry, Instagram is a great tool to show what your brand is all about. It could be a product or a lifestyle. Many buyers use it as a discovery tool to find brands and see if they match with their flow. From the very start, we made a meaningful effort to do it right on Instagram. Not going after great followership, but really carrying out what we want the brand to be,” Masud says.
‘We are international’
For Retromarine, the right time to venture across borders online is now, believes Masud Rabbani. “Offline, international selling is not even a conscious decision. We visit tradeshows and meet people from everywhere,” says Masud. Retromarine is represented in 14 countries via offline sales. The company is international from the inside out. “Every one of our board meetings is like a United Nations summit. None of us are actually American. We speak 14 languages; I myself am Persian but I feel a quarter Austrian, a quarter German and a quarter Spanish. Juan is Colombian. We operate in a very International environment. All of us have lived in at least five different cities and we have a huge international network for whatever you may need. It’s fairly easy for us to think international because we are international. It is an organic, natural kind of thing for us rather than something we need to consciously decide to do.”
Going to Europe, however, was a very conscious decision, especially because a new country for Retromarine goes well beyond just launching a webshop in another language. For each new market, Masud strives to identify whether there is sufficient offline demand and if he can find the right salesforce to represent the brand locally. According to the entrepreneur, the decision of which countries to focus on first is based on the one hand on the e-commerce market size, and on the other, the ability to get a good quality online sales force. The UK was an obvious choice, combined with Germany, France and Spain. “In London and Ibiza, we launched a couple of stores offline to test if there is a market for a product of our price range.” The online infrastructure and the offline activities are two inseparable parts of the sales strategy. “If people see our garments anywhere, they need to have the option to buy them online,” explains Masud.
Network of freelancers
With only two fulltime employees, Retromarine is now going from one country to eight. How do they manage this growth? “We are hitting our limits. Still, we are always very careful with decisions we make and critical with ourselves. We want to be careful with our investors’ money.” In order to keep things moving smoothly, there are 20 freelance collaborators working on PR, online marketing, social marketing production and sales. Once the initial sales goals are achieved, Masud and Juan want to hire more staff in-house: “At the end of the day, it’s best to have the knowledge and people in-house sweating and bleeding next to you.”
For Europe, Retromarine plans on replicating the small accounts strategy in order to build up their brand image and gain momentum before negotiating with the ‘big guys’. “Department stores are really hard to work with; the rules they have, the margins they take, so it is good to be strong when you go into these negotiations. You’d rather them come to you than the other way round,” believes Masud Rabbani.
Shopify, Amazon, Dropshipping
Most of Retromarine’s e-commerce activity runs on Shopify, a platform Masud is extremely fond of: “Shopify is a great platform which allows you to do everything easily and quickly, with plugins and support. It also offers the possibility of dropshipping, which is very important to us.” Third-party selling activities on Amazon are controlled in-house. Recently, Retromarine has also coded and integrated an Amazon login, allowing Amazon Prime customers to benefit from free two-day shipping on their brand website, which would otherwise cost 15 dollars.
Alongside these two channels, Retromarine works with Bluefly via a dropshipping process and is open to setting up more dropship channels: “Dropshipping is a good way for us to open up doors without the retailer taking a big risk.“
E-commerce: The first impression matters
For the European expansion, Retromarine has contracted warehouse space in Germany through Salesupply. The clothes are produced in Colombia, which has a free trade agreement with both the US and most EU countries. By shipping directly to the German warehouse, VAT and custom expenses and operational difficulties can be avoided. But that is not the core reason why Masud Rabbani wants stock in Europe: “Money aside, the main reason is that to me, the final customer is the most important person. That is the person who is willing to spend 155 dollars with my company right now. Not having products in Europe would mean, in the best case scenario, a delivery time of five business days, which is unacceptable.” Retromarine strives for a 24- to 36-hour delivery service. In addition to shortening the delivery time, working with Salesupply means there will be native Germans taking care of the customer service. “Right brand representation and excellent customer service are key factors, because the first impression matters.”
‘Your highs are high and your lows are low’
Being part of a fast growing start-up in a very dynamic retail environment, Masud realised that ups and downs can sometimes be very close together. He recalls: “We once had a huge shipment of 1200 units and no money. So we rented a huge van to go pick up the containers at the cargo terminal of JFK Airport. It took us two hours to find the right cargo terminal and five tries to get the car up the ramp. That same afternoon, I had to change out of my gym gear and fly to Dallas to sit in a suit and tie and speak to the president of the Neiman Marcus group. One day I’m driving my van to the cargo terminal in jogging pants, and the next day I’m negotiating with the manager of a five-billion-dollar retail giant. That is what a start-up is like; your highs are high and your lows are low, and you have to do pretty well everything yourself. There is not a single thing in this company that Juan and I haven’t done ourselves yet.”
Letting go is not easy
Even today, Masud and Juan are still personally involved in most parts of the value chain. “I still reply to a lot of emails because in that way, I learn a lot about our customers.” Due to the expansion, the company is in the process of outsourcing the entire customer service for Europe and the US. The new customer service representatives are equipped with training material and are sent examples of the tone of voice in order to understand the brand and the way it is supposed to be represented. “Not everything will always go right, and then you have to stand up for your mistakes and people will forgive you. I would go as far as saying that if you screw up, and then make it right, that customer will be more loyal than if everything works perfect. It’s a funny cycle,” believes Masud. “Customer service is really important to me and I have been very hesitant to give it away. It is such a key component to building your brand and your reputation. But we are outgrowing the stage where we can handle it ourselves.”
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