Elliot Rhodes: Justin Rhodes
Justin Rhodes has turned the humble belt into the basis of a Startup Award-winning business. He tells us how
The humble belt seems an unlikely item to base an entire retailing business upon. But Justin Rhodes’ London-based store has so successfully exploited a previously untapped demand that he was named Retailer of the Year at the recent Startups Awards.
With high fashion focusing on everything from jackets to dresses, it’s unsurprising that retailers have often overlooked belts. Rhodes, a self-confessed belt addict, saw an opportunity to transform the image of belts from staple accessory to luxury item.
“I love belts but I could never find any that were interesting,” he explains. “I was thinking of business ideas and looked at what the competition was doing. It became apparent that belts had become the forgotten item in retail.
“Everything else had been done to death, but the belt was the poor man, it fell into the department of necessity, like socks.
“No retailer wanted to do it because they can’t spend time and space on it, it’s not their core competency. You can buy a £1,000 suit and they can’t give you a nice belt.”
Rhodes believed that he could meet an existing demand for high quality belts, while creating an expanding market for himself by promoting the idea that people can own more than one, usually black, belt.
While working in France, Rhodes decided to take the plunge and set up his own belt store, Elliot Rhodes, after talking through the idea with friends and family on and off for three years.
“I always wanted to do retail and feel comfortable with the product, not fighting over five and ten pence pieces like I was doing at the time,” he says. “I talked to people to see what the feedback was like.”
Two friends, who worked in factoring and finance respectively, were impressed by the idea enough to pledge startup funds towards the business, with Rhodes’ uncle also persuaded to provide finance.
By October 2003, £145,000 was in place to start up the store, although extra costs and unforeseen problems saw investment eventually rise to £215,000.
Rhodes then began a meticulous search for a manufacturer that could provide the high quality leather he needed for his belts. In a departure from traditional belts, he developed a system whereby straps and buckles are interchangeable, so that customers could mix and match designs.
“It means you can have a simple belt during the day and flashy at night,” he says. “Belts with clips aren’t new, they’ve been around for years. What I did was design a system where you change the buckles and shorten the belts.
“This allows us to custom-size for people, which helps us out in the amount of stock we need. I designed it on paper, took belts apart to conceptionalise it, and eventually realised I had it.”
During a three-day leather fair in Italy, he was recommended several suppliers, while an internet search and further networking pointed towards a small town in Spain that relies heavily on the leather industry.
The local Chamber of Commerce in Spain recommended a manufacturer that was able to produce the belts he needed. Rhodes admits that the factory initially found it hard as they had to produce products on a smaller scale than normal but after teething problems, they now provide Elliot Rhodes with the high quality leather belts he requires.
Rhodes estimated that he needed a range of 140 different belts, a number that has now swelled to around 300 styles due to seasonal ranges and new concepts.
Prices range from £40 to £80 for a strap, with buckles starting at £10. Again having to make an estimation, Rhodes admits to being surprised as to how much money customers are prepared to pay for a luxury belt.
“I was very scared about having things too expensive, but you soon realise that there are people who will spend £200 on a buckle if it’s unique and interesting,” he insists. “You realise you can price it at what the market can bear.”
One of Rhodes’ most notable achievements is the impressive location of his business. Not many start-up businesses manage to locate themselves in London’s Covent Garden area, a stone’s throw from the tube station that belches out thousands of tourists, office workers and shoppers on a daily basis.
“I had a visual concept of how the store would be, I knew that the belt had to be the focus of the store, more like a gallery than a shop,” explains Rhodes, as we sit in his impressive boutique-style premises.
“I wanted to be in the King’s Road or off Bond Street, but it became apparent that wouldn’t be affordable. I just kept looking and it was frustrating because it was hard to find a property that would take us.
“We put an offer in for somewhere, but they dithered around and it fell through. Then this place came up – it was a good size and a reasonable price and they didn’t want a premium, whereas everyone was asking for a £30,000 or £40,000 premium. Why would you want to throw that money down the drain before you’ve even started?”
After being advised by a property agent that he should translate his ideas into an attractive brochure in order to make an impressive presentation to landlords, Rhodes managed to secure the Covent Garden premises.
“We were lucky that they (the landlords) wanted to turn this corner into a boutique area, they didn’t want another coffee shop or mobile phone shop,” he says. “They were actually offered 50% over what we offered and they turned it down.”
Rent was set at £42,000 a year, with six months’ deposit. But the main financial headaches came when renovating the premises, which had fallen into a state of disrepair.
“It was a clothes shop before I took it on, but it was beyond disgusting, it was a wreck,” Rhodes recalls. “The walls were rotten and the ceiling collapsed in the basement. The whole shop-fit cost just over £30,000, which is double what we had budgeted, which was mainly down to labour costs because there was so much to be done.”
Despite being in business for less than a year, Elliot Rhodes has enjoyed strong sales and established a brand. He has taken on two members of staff, one full-time and one part-time.
Initially disappointed that sales hovered around the £16,000 a month mark when he expected £20,000, Rhodes admits he was reassured by a conversation with a retail analysis who pointed out that even an established brand in a new location takes 12 to 18 months to break even.
“I was overstocked for a while be then we started moving forward and there seemed to be a crossover where people became aware of us,” he explains.
Sales have been boosted by impressive press coverage, which has included articles in Time Out, Harpers & Queen, the FT and the Sunday Times. But Rhodes’ PR and marketing effort was nearly undermined by the decision to take on a PR company at an early stage.
“I hired a PR agency for the fist six months and it was a disaster,” he admits. “My biggest single regret was spending £8,000 on a PR agent who got so little PR for us.
“My father told me I should do my own PR, but I thought I’d done everything else in the shop and that we should get a professional to do the PR. We hired someone, and I wasn’t expecting the world, I knew we wouldn’t be on the cover of Vogue tomorrow.
“But it became apparent she didn’t have the contacts we needed her to have. She was talking a good game, but we are an interesting concept and should’ve got a bit of press – customers would come in here and say ‘How come we haven’t read about you?'”
Rhodes now produces his own brochures and press releases with which he bombards magazines and newspapers (“A lot of the time I get nothing, but I keep sending them.”)
The entrepreneur believes there is space for two more stores in London, with other outlets in the major UK cities. Rhodes points out that opening another store could also spilt overheads and stock.
“We’d be obliged to get external investment to open more stores,” he says. “We can show that we have a concept that is repeatable – belts have always been fashionable.”
Rhodes clearly enjoys being his own boss and is adamant that budding entrepreneurs must embark on a business that they have a passion for.
“You don’t start this type of business for money,” he says. “It has to provide you with a living, but it has to be fund to do. I like the contact with people, it’s fun to spend the day interacting with people.
“You’ve got to love what you do and know you have to make a huge sacrifice – you won’t have nay personal time and you’ll be disappointed if you think otherwise.”
Any other words of advice? “Always over budget – whatever you think it is, add at least 30% on top.
“Expect the unexpected and stick to your plan. Be confident in it.”