Business Stories
At Alton Towers there’s a ride called Rita. After queuing up, you strap yourself in and wait. The suspense builds as a giant clock counts down. BOOM! You’re off. You accelerate to 100kph in 2.5 seconds and a force of 4.7G pounds your cheeks into Play-Doh…
Lounge Underwear is the business equivalent of Rita. Its co-pilots, Brummie couple Dan and Mel Marsden, are rocketing along at stomach-churning, cheek-rippling speeds. But unlike the thrill-seekers at Alton Towers, these co-founders don’t know if their ride will slow down or get faster. Last year for example, things accelerated to an utterly deranged pace as the company grew by 250%. For perspective, during Black Friday 2020, Lounge Underwear despatched more than 150,000 orders, sometimes hitting 25 sales per second. With such stats it’s not surprising that the company was fifth in 2020’s Sunday Times Fast Track 100. Which makes it even wilder that Dan and Mel launched their business from their front room five years ago. Now it turns over £50m+, employs 120 staff and has recently moved to a 54,000sq-ft global HQ in Solihull.
DURING BLACK FRIDAY 2020, LOUNGE UNDERWEAR DESPATCHED MORE THAN 150,000 ORDERS, SOMETIMES HITTING 25 SALES PER SECOND.
“There wasn’t a specific launch moment,” says Dan, who met his business partner and wife Mel at primary school – they were childhood sweethearts. “When Mel finished university, we started a company called Fashion-eyes and imported dresses from China to sell on eBay. We built Lounge from that – but we kind of built it backwards.”
He explains what he means: “It wasn’t like we had this amazing idea to build an underwear company. Instead, we knew we wanted to build a business and underwear happened to be the right product. We wanted something that would be cheap to import, brandable and easy to mail out. We also wanted something that would give large margins and be cheap to store. It had to meet all those criteria because we only had £1,000 to invest. Underwear was the perfect solution.”
Few people turn a £1,000 investment into a £50m+ Fast Track 100 Company in five years, so something special has happened. But what? “A key reason for Lounge’s success is that Dan and I are like yin and yang,” says Mel. “We tackle totally different sides of the business. I focus on marketing, customers and brand. Dan focuses on business strategy and growth. Our motivations and roles are very different but complementary – that’s a big reason for Lounge’s success.”
Let’s look at Mel’s influence first. She sets the brand values and controls the messaging. She does it so well that Lounge has built a community 2.3m Instagram followers. How has she achieved that? “In the early days, we used influencer marketing to great effect,” she says. “But more generally we talk to people like they’re our best friends and use a tone that creates an authentic connection. Customers feel like they’re having a chat with us; they come to our social feeds for a lift. We’re a group of women together and we try to make each other feel good.”
Mel describes Lounge Underwear’s followers as the “Female Family”. She crafts inclusive, uplifting, friendly posts. For example, under a Instagram picture of a model wearing Lounge Underwear and showing some tummy cellulite (an image that would be shunned by traditional underwear companies), she writes: “A little Monday reminder for you girls… every angle of you is beyond beautiful. Your body deserves comfort and love, always!” Another message says: “Size does not define beauty and you are gorgeous exactly as you are.” Indeed, Lounge Underwear works with amputee models, plus-size models and others you wouldn’t traditionally associate with lingerie. Differences are celebrated. Everyone is welcome except those who spread division and negativity.
WE USE OUR PLATFORM RESPONSIBLY TO REFLECT THE REAL WORLD. WE ARE HUMANS; WE ARE ALL DIFFERENT. IF WE DIDN’T DO THAT I’D BE ASHAMED OF OUR COMPANY AND BRAND.
Mel says: “We use our platform responsibly to reflect the real world. We are humans; we are all different. If we didn’t do that I’d be ashamed of our company and brand. The old idea that you should look a certain way is the opposite of what we’re about. It sounds super-clichéd but our approach comes from a very real and genuine place. I run the Insta account and I feel like a hidden influencer. These are my personal values. I talk to young women in a way that I would talk to my daughter when she’s grown up [Dan and Mel recently had a baby girl].”
Behind Mel’s all-important branding and messaging, Dan steers the business financially and strategically – a task that’s akin to piloting the Millennium Falcon through a meteor storm at lightspeed.
“Scaling the business so quickly is full of challenges,” he says. “Few companies of our age have done it, so there are virtually no templates to follow. If we were growing by 10% year on year it would be easier to plan for. But because we’re young and expanding so fast, predicting how much stock to bring in and how many people to hire is extremely tricky. We could grow by 50%, 100% or 200% next year. They’re amazing problems to have but tough to solve.”
Furthermore, Lounge Underwear is not just growing in the UK, but also in Europe, the US and Australia. “We haven’t gone out of our way to target a particular area or country. It’s happening organically,” says Dan. “We don’t say: ‘I reckon Germany might work, let’s give it a go’. We say: ‘Germany’s growing naturally, so let’s put a strategy around it’.”
And of course there’s now far more to Lounge Underwear than two co-founders. At the time of writing (they’re hiring all the time) the company comprised a team of 120. Mel says, as Dan nods enthusiastically: “Our team are brilliant. We’ve all stayed closely connected during the pandemic. There’s a genuine family feel even though we’ve more than doubled our headcount in 12 months. It’s an amazing culture. The average age is 25 and we can’t wait to get back into the office to enjoy the energy and the vibe.”
The story of Lounge Underwear shows how far and fast a home start-up can grow organically, with zero outside investment. “Lots of companies get investors in early but that can kill the spark,” says Dave. “When you start adding a corporate culture it dampens your internal hype and excitement.”
Lounge Underwear’s stellar growth proves that with the right business model, the right team, the right branding, and the right conditions, it’s possible to accelerate at warp speed. This company may have started life in the co-founders’ sitting room but it’s already well on its way to becoming the biggest underwear brand in the world. So strap yourself in – Rita’s about to go again.
