Project: High Performance Sportswear product development
Industry: Recreational/ Adventure Tourism
City: Canberra, Australian Capital Territory
Amounts: $500,000 Find what funding programmes you qualify for
From zero to small business hero in record time
New Zealand-born Jamie Hunt has a sure-fire formula for small business success: invest in developing a great product and keep investing. The former triathlon champion is co-founder of one of the best known brands in the world within the high performance sportswear category, as Hunt’s company, 2XU (“two-times-you”), is a global leader in compression wear (which is sports attire that enhances performance.) He says their apparel represents “human performance multiplied. We develop product that sells itself. And that comes from investing in researching materials, in product development.”
It’s an investment that’s paying dividends. 2XU has a range of 400 products that are sold in 45 countries, and is an official apparel supplier to multiple sporting institutions where exacting standards are required for elite athletes. Through its 12 Australian stores and 150 or so stores internationally, the company claims 3,000 doors (a larger store will have more “doors” than a smaller retailer). With growth rates consistently at 80 percent or more, Hunt sees no slowdown in this rush of growth.
“We don’t see this [rate] dropping. If anything, we see higher rates ahead. Over the last year, our doors have doubled, with the US and the UK now each having 650.”
Finding the right path for your small business
Hunt explains his retail business model. He says the company has chosen a mix of company-owned stores and licensed stores. “We’re a company which identifies its strengths. Ours is creating a great product; marketing and selling that product. Half of our stores are licensee stores. These are people who love our brand. Opening our own stores and managing them from Victoria would not be optimal. The best formula for us is to find people who are prepared to put skin in the game. This business model has been a significant success factor in where we have got to. All our stores are highly profitable. [The licensees] work with our designers to fit out the store and then buy the stock from us and go. We keep it very simple.”
The company positions itself to sports enthusiasts, both amateur and professional, as well as the women’s fitness sector. At the outset, the partners wanted to build a sporting brand that was distinctive.
“There are plenty of brands doing biking tops and the like. We had to have a whole new angle. Where Nike and Adidas have gone more mainstream, we wanted to represent high performance.” In delivering on this positioning, the partners sourced cutting-edge material from Italy elsewhere in Europe.
“This led us to the brand name: two times you. We’re going to cloak you with technology that will make you go stronger, more agile. The whole point of the brand is to make you more than what you are. We say fashion is important, but performance must come first.”
Government funding provides help for businesses big and small
Hunt notes that his company has benefitted substantially from a number of government funding programs, including the Australian Trade Commission (Austrade.) “Austrade is a good and generous organisation. We have a couple of different grants but benefits received amounts of up around $500,000.”
The Export Market Development Grants (EMDG) scheme is a key Australian Government financial assistance program for aspiring and current exporters. Administered by Austrade, the scheme supports a wide range of industry sectors and products, including inbound tourism and the export of intellectual property and know-how outside Australia. The EMDG scheme reimburses up to 50 percent of expenses incurred on eligible export promotion activities, above a $10,000 threshold. It provides up to eight business grants to each eligible applicant.
Hunt says 2XU is only just “scratching the surface” of market opportunity in compression apparel. “The next big push is more towards the snow markets where we see great benefits. And also the US market in NFL. Globally, tennis and golf are within our sights in the next 12 months. These are much bigger markets. We have a list of 10 other sports we can go for in the next two or three years. We may be entrepreneurs, but everything we do is a calculated risk.”
Would you like to get funding to develop your business idea? There’s money available now for qualified existing and start-up businesses.