How saying No could have killed £40m-turnover REN Skincare
REN Skincare’s founders Antony Buck and Robert Calcraft advised big companies on making an impact abroad. But a simple oversight nearly caused its demise…
Skincare company REN exists thanks to co-founder Antony Buck’s pregnant wife’s aversion to almost every cosmetic product.
Having run their own brand agency for eight years, he and fellow advertising colleague Robert Calcraft switched tracks and in the last 16 years have turned REN Skincare into a £40m turnover business with 70% of its revenue coming from the 50-plus countries it distributes in.
But its international success could have been thwarted in its infancy as Buck explains…
We knew nothing about skincare. So when Rob and I launched REN in 2000, there was only one priority on our list: don’t fail miserably.
Having worked in advertising, we’d often advise brands to keep the message simple. But REN’s concept was more complicated. Our products combined three elements which previously hadn’t been available together – they avoided nasty ingredients, were effective and a pleasure to use.
We opened a couple of shops in London. At that time, as one of the only premium skincare brands to have our own sites, REN began to get noticed by the UK press and retailers abroad.
Getting a break in America
For any brand, especially skincare, America’s an enormous potential market. We’d heard the best way to break into it was through Barneys New York and Fred Segal in Los Angeles. But we had enough on our plate establishing ourselves in the UK.
So when we got an email from the head buyer at Fred Segal asking to stock REN, we faced a dilemma. The general view in advertising is to strike while the iron’s hot. But we’d no plan, infrastructure or reliable supply chain in the US. We wanted to develop REN for the long-term and knew this would take time and patience.
After considerable agonising, we thanked the buyer but told him we weren’t ready yet. We expected a bottle-shaped portrait to be turned to the wall but he was massively supportive and said he’d happily wait. It was one of our first major lessons: the delicate art of saying No.
It’s a tactic we’ve had to deploy many times since, especially in foreign markets. We now have a strong US sales force and our products are sold in around 500 American stores. But in other parts of the world we’ve had to be very careful about the way we control the brand.
Distributors don’t often spend hours on strategy. Why should they? They usually juggle a number of brands and seek a quick return. So when they take your beloved products and place them in the wrong space, the wrong store or use the wrong marketing campaigns (sometimes all three), you have to rein them in – gently but firmly.
The importance of legal advice
The only thing to which we’d never say No again is a lawyer. Unfortunately, we learned the hard way. One of our first international deals was with a distributor in a major country backed by the founder of a major skincare brand. When it came to signing the contract, in our naivety, we thought: ‘Why do we need a lawyer?’
Within months, the relationship had collapsed and our distributor was engaged in legal battles with his backers. Clearly we needed to get out of our contract.
But when we took it to a partner at one of the big City legal firms, he gave us his considered professional view: “You’re screwed.” We’d inadvertently signed a perpetual contract binding us to this distributor forever. “If you stop working with him, he can bankrupt you.” The lawyer’s opinion was backed up by counsel.
The legal saga dragged on for nearly two years and caused many sleepless nights. It was awful. The fact that one small oversight could easily have sunk our entire business was a real lesson in never taking anything for granted.
Eventually we were introduced to a lawyer from a smaller firm with a much more pragmatic approach. He came up with a strategy to deal with the problem and ultimately we managed to part company with the distributor in a way that was legally watertight and quite amicable – afterwards he even asked to friend me on Facebook.
Nothing’s easy in business. There are hurdles at every stage and in every market. Some you can jump, others just need knocking down.
Extracted from ‘Going Global: 30 Years 30 Insights’ by Piper, the leading specialist investor in consumer brands. For more information or to order a copy, please go to piper.co.uk
About Antony Buck
Having graduated in maths at Warwick University, Antony Buck joined advertising agency BMP where he worked in strategic planning on brands such as Alliance and Leicester and Volkswagen. In 1990, he and his advertising colleague Robert Calcraft set up their own brand consultancy. The idea behind REN was conceived in 1998 after Buck’s pregnant wife developed adverse reactions to almost every kind of cosmetic. Buck and Calcraft launched REN in 2000. It is now distributed in more than 50 countries and has retail sales worldwide of over £40m, with 70% coming from overseas.