On Monday, news broke that LVMH's private equity fund L Capital Asia had taken a majority stake in the Australian swimwear brand Seafolly for an undisclosed sum. On track to generate $120 million in sales this year, and claiming 35 percent of the swimwear market in its home country, it's easy to understand why an investor would want to get involved. That Seafolly's campaign models share a wide overlap with the Victoria's Secret squad — Martha Hunt, Behati Prinsloo, Miranda Kerr, Jessica Hart, et al. — can't hurt, either.
So what's Seafolly, which has been family-owned since CEO Anthony Halas bought out his father's partner in 1996, going to do with the investment?
Reposition itself as a lifestyle brand, to begin. L Capital Asia and LVMH have a lot of experience in sourcing and production, Halas says, something that's going to come in handy as the company grows its apparel, sun protection and eyewear segment. Swim represents 80 percent of its sales today, and to strengthen the remaining 20 percent that comes from accessories and apparel, it's helpful to work with a team that's been there before.
Global expansion is a big part of the equation, too, an ambition reflected in the company's decision to start casting more international babes for its ads after years of leaning toward Australian models. Seafolly recently opened its first store in California with plans to open another two in the area, although it started selling wholesale to retailers like Everything But Water, Nordstrom and Anthropologie about five years ago. (The overall business is roughly 65 percent wholesale, Halas says.)
The trouble with opening stores in the States is that not being on the ground has resulted in Seafolly losing out on prime real estate to local players. It's going to get a lot easier to scoop up the locations the team wants with L Capital Asia (and LVMH) behind it, Halas says.
Every new market poses a different challenge, of course. Wholesale clients in France, now one of Seafolly's biggest geographic regions, were initially skeptical about the amount of coverage the brand's styles afford, since local brands tended to be a lot skimpier. Turns out French consumers wanted an alternative to that. Selling in Germany takes patience, meanwhile, because retailers tend to place conservative orders at first. But they'll build on those incrementally and become loyal clients, Halas says.
The U.S. is tricky because it's so fragmented when it comes to swim. Brands slot themselves into tight niches, like juniors and petites. Seafolly targets a much broader swath of the population, so it's had to prove itself to wholesale clients.
But that's okay. According to Halas, "We're not in a hurry."