Marc Worth: WGSN and Stylus
After WGSN co-founder Marc Worth sold the business for £142m, he tried retirement, angel investing and sunbathing. Now, at 50, he’s back
In our post-millennial Dragons’ Den culture it seems extraordinary that an entrepreneur as successful as Marc Worth isn’t a household name – he doesn’t even have a Wikipedia page. Yet for 3,500 fashion companies across the world, his contribution to business has been invaluable.
In 1997, Marc and his brother Julian put the family business they joined 20 years earlier on backburners and stepped into the – then unknown – world of the internet with a big idea. The Worth Global Style Network (soon unanimously adopted as WGSN) sought to do away with the expensive trend books apparel firms bought in from Paris and to instead provide a relatively instantaneous, universal resource where fashion companies could source trend-forecasts and international design inspiration.
The dot com wave
Despite initially – and rather cumbersomely – delivering the resource by satellite, WGSN was an instant hit. “Nobody had broadband at that point and we never wanted to compromise the quality of the content. It didn’t really work but people were buying into a promise and they were so excited about it,” Worth says.
As the internet increased in speed and innovation, WGSN scrambled on board the dotcom wave, reaching 1,500 clients by 2005. But it wasn’t all smooth surfing; in 2002 – with everything remortgaged – WGSN was down to its last £700,000, with overheads of £1.2m a month.
After some aggressive streamlining, the business bounced back, to reach revenues of £15m at the end of 2004, with gross assets of £37m. But by 2005 the brothers were ready to sell. Emap – keen to be seen to embrace digital innovation – offered £142m for the 172-person empire and eight weeks later the deal was done.
Life after WGSN
Far from publicly basking in the glory of entrepreneurial success, at 44 Worth slipped into early retirement and spent most of his days on a sun lounger at his house in Herzliya – the affluent Tel Aviv beach resort. By the middle of 2009, he was bored – “I was too young to do nothing,” he says.
Worth had used his leave to invest in a few start-ups – including the Mexican restaurant chain Chilango and virtual reality concept Near London – but never took a high enough stake to hold his attention. He had also, on his daughter’s suggestion, made an ill-advised attempt to re-launch seventies fashion house Ossie Clark – losing £4m in the process. He knew that if he was to take on such an endeavour again he had to be clear: “Is this a product looking for a market or a market looking for a product?”
The tooth and nail of it is that by this time Worth was growing frustrated with where Emap had led WGSN. It had expanded the fashion-forecasting agency to 3,500 clients, but most of that growth had come from the “economy class”. “The product had become dumbed down – almost colour-by-numbers,” Worth says. “It’s very hard for a traditional publisher to move into digital. Traditional revenues suffer as they move into the internet.”
With his three-year non-compete agreement with Emap having passed and a desire to “do something that I knew how to do and do it again” Worth started pulling a team together to create a WGSN-style resource for the interiors world. However it soon became clear that fashion and interiors had become part of one larger industry – design – and the concept was expanded to encompass fashion, beauty, travel, automotive and hospitality. With Worth now 50, Stylus Media Group was born.
“I didn’t realise how much I missed it [building my own business] until I started doing it again,” Worth says from the start-up’s trendy offices in Marylebone Station, which previously housed National Rail’s head office. “With Stylus, I love doing it…and this time I’ve been able to self-fund [£4m], which has saved a lot of time.”
Emap haven’t taken the launch well – not least because several of WGSN’s senior staff returned to their former employer’s side – staging a defensive attack by promptly launching WGSN-homebuildlife. However Worth argues that, “WGSN was a product for the fashion industry. Stylus is very different because of our view of having one service for one industry – design. Only 10% of our client base comes from the fashion industry.”
He adds: “WGSN has become more of a prescriptive design tool. Stylus is designed to inspire creative thinkers. We’re not telling them what to do, like WGSN.”
First year growth
Worth is unconcerned about the risks of launching another subscription-based business model in the current economic climate, saying: “In the mid-2000s people were thinking content on the internet should be free but I think it’s gone full cycle.”
“We don’t really see ourselves as an internet business anyway, it’s more publishing,” he says; adding, “I believe this is the best time to be doing this, as smart businesses realise that they need to innovate. They want to stand out.”
Barely past its first anniversary, there is no doubt that Stylus’ growth has been impressive. Worth does not disclose exact financials but states that the company’s 200 clients currently pay a set first-year price of £10,000 – suggesting a turnover well into seven figures.
However, with 70 staff to support worldwide, such income doesn’t stretch far. “Stylus will be loss-making for 2-3 years – you need nerves of steel and deep pockets,” Worth admits. “But if it’s a good business and you can make your mark now, then when we come out of recession…[we] will be very very well placed.”
That said, he is not planning another WGSN-style buy-out just yet: “I don’t think we’ll ever see the heights of 1999/2000 again. There were lots of silly people then, but people will pay good money for solid businesses.
“That principle applies to any business – if it’s a solid business with solid profits, they’re going to attract good valuations.”
Besides, Worth is enjoying his return to entrepreneurship far too much to skulk back to his sun lounger and has ambitious plans for the business, with his sights firmly set on further international expansion (60-70% of Stylus’ clients currently come from the US).
Planning his invasion of BRIC MIST, Worth says, “We definitely have to be in China, the Far East and Taiwan . Now’s the time as they are still a bit more manufacturing-focused and not as innovative as us yet – but they want to be there.”
Stylus is already receiving strong levels of renewals and upgrades and Worth is expecting client figures of 600 by the end of next year – and 3,000 subscribers by 2015. “I want to build a really successful global media business,” he says.
“I think it will be possible to do that in a shorter time that it took us with WGSN and to be much bigger than WGSN.”