Paez UK: James McGowan and Douglas Aarvold
The founders on building an Argentine shoe franchise in the UK
Company name: Paez UK Limited Website:http://www.paezespadrilles.co.uk Founders: James McGowan & Douglas Aarvold Age: 25 Based: London Staff Numbers: 2 Date started: February 2010
Tell us what your business does:Designs and imports Argentine “alpargatas”, (Espadrille shoes).
Where did the idea for your business come from? On the back of living in Argentina where we first saw the shoes. Our love for the shoes and the Argentine culture led us to setting up a UK franchise. We both felt they’d be a huge hit in the UK and so here we are.
How did you know there was a market for it? I had seen rope-soled Espadrille shoes before, however Paez are built with a rubber sole, padded leather insole and canvas on top, which makes them more comfortable and practical than the traditional roped soles. Having never seen a pair of Paez or anything similar in the UK we felt that this could work well over here. Plus they were exactly what I needed for the summer and therefore it worked for me!
What’s your USP (unique selling point)? Affordability, practicality, simplicity, comfort, creativity, fair-trade, authenticity and lots of fun.
What were you doing before starting up? I was working in logistics in Dubai and Afghanistan. Doug was a commodity trader, trading in peanuts.
What appealed most about being your own boss? Our time, our effort, our experiences and hopefully our reward.
What planning did you do before you started up?We started by giving pairs out to family and friends and the feedback was very positive. We both had conviction that the product was good and something that was yet to be seen in the UK markets. So we got the ball rolling by registering the company, setting up a bank account and placing our first order. The business plan has developed as we have grown. Everything changes so quickly and we are just focusing on the present as opposed to getting too carried away with the future.
How did you raise the money? We have both worked very hard to save as much money as possible. Working in the tax haven of Dubai was for me a big help!
How did you find suppliers? Doug was living abroad in Argentina where Paez Argentina is now the leading brand in making fashionable alpargatas. He met with the owner and set up an exclusivity deal with them. Paez, now in its third year of existence, is exporting to 16 countries worldwide. We have built up strong relationships with Paez and the Argentines. The operation runs very smoothly as we are both heading in a similar direction trying to achieve the common goal of making Paez a global brand.
What challenges have you faced and how have you overcome them? Cashflow – to date we have financed the company using entirely our own money. This has been very restrictive in our approach towards launching and marketing the brand to the full extent we would have liked to. Our tight budget has meant that we have had to concentrate the majority of our expenditure on building stock and not allowing much in the way of brand promotion and PR. Our reasoning behind investing in stock was primarily to treat this first summer as a pilot run, however at the same time it has allowed us to secure greater feedback as well as generate income within the business.
Where is your business based? What have you done to manage home and work life?I work from home and there have been no changes really. For me Paez isn’t considered a 9-5 job but more like a 24/7 passion. I can work wherever and if something needs to be done we get it done without fail.
How have you promoted your business? We promote the business on a very personal level.
Over the past few months we have both made deliveries to our clients in person. This has been fundamental in the building of key relationships and ensuring we promote Paez in the best way possible. The majority of London sales tend to be delivered by each of us by bicycle!
Since the beginning of spring we have attended weekend markets in Portobello and Brick Lane’s Sunday UpMarket.
We have attracted new clients by approaching shops in person and bringing sample shoes. This has been our most effective way of securing new business as we are guaranteed a quick and honest face-to-face response.
What has proved successful and what won’t you do again?I will never cold-call anyone to try and sell the product. No one likes to be sold anything on the phone and making them was a painful experience!
How much do you charge? How did you decide this? We charge £20 – £25 per pair. This price is a few pounds higher than Havaianas flip-flops and lower that our main competitors. The price has been well received by our customers and our stockists have agreed to sell at this RRP too.
What has your growth been like? Growth has been great. We are almost profitable, and hope to be by the end of the summer.
What was your first big breakthrough?Breakthrough Breast Cancer – “Fashion Targets Breast Cancer” Over the course of the past few months we have been working alongside Breakthrough Breast Cancer, the UK’s leading breast cancer research team. We approached the charity with the hope of linking them with Paez in order to help raise awareness and generate funding through the consumerism of our shoes. In April next year Paez will be a part of the ‘Fashion Targets Breast Cancer’ label to be launched here in the UK. This is a nationwide venture where a total of 30% of all sales goes towards raising money and awareness for Breakthrough Breast Cancer. We would like to raise as much as possible.
What would you do differently? What have you learnt? I guess one key lesson is to only take on what you can manage. Often it is very easy to get carried away and put unwanted pressure on yourself and the company.
What advice would you give to budding entrepreneurs? Give it a go… there’s nothing wrong with failure. You simply start again and learn from your mistakes knowing you tried it, which is a far greater achievement than most.
Where do you want to be in five years’ time? To have landed the UK with an era-defining shoe!