How two young entrepreneurs made a fortune in underwear
Lounge Underwear has put Mel and Dan Marsden among the richest under-30s in Britain only a matter of years after starting up in a box room at Cardiff University graduate Mel’s parents’ house. Laura Clements reports
CARDIFF University graduate Melanie Marsden is one half of a duo who set up an underwear business in her parents’ box room and turned it into a company worth £200m.
Married couple Mel and Dan Marsden, both 29, created Lounge Underwear in 2015 using just £1,000 to make their first 100 bras at home.
Since then, playing to their strengths and through a canny use of social media influencers, the brand has gone from strength to strength, earning them a place on the list of the richest under-30s in Britain. During their first Black Friday sale they took more than £60,000 in just 48 hours.
Sales more than trebled during Covid to £55m, making them the fifth fastest-growing business in Britain and ranked the eighth-richest under30s – just one place below pop star Ed Sheeran. Their combined £200m fortune puts them a shade behind Sheeran’s £220m but dwarfs the likes of One Direction star Harry Styles (£75m) and Manchester United and France footballer Paul Pogba (£64m).
Operations are no longer co-ordinated from that cramped box room but a swanky new warehouse in Solihull instead as their products are exported all over the world.
Mel admits she’d have been the last person to think she’d be heading up such a massive company when she arrived at Cardiff University as a nervous journalism student.
She has a strong Midlands accent – a consequence of being brought up in Stourbridge on the outskirts of Birmingham – but also a strong Welsh link as her mum is from Abergele in Denbighshire.
“I’m half-Welsh so going to Cardiff University was something mum’s quite proud of,” Mel said. “I’ve always loved Wales as a country and Cardiff had a lovely buzz about it. It was quite welcoming for me – I was quite nervous as a pre-graduate and there was that comfort knowing I was half-Welsh.”
There’s no hint of that nervousness now. Mel is in charge of a 100-strong workforce which is largely young and ambitious. Throw into the mix a wedding and a new baby during a pandemic and she could be forgiven for feeling a little overwhelmed.
Indeed it’s hard to believe she’s managed to fit in setting up a business, marriage and motherhood all before reaching 30. If their brand is all about celebrating the power of women, then she’s the perfect figurehead. There’s no doubt creating a strong brand around a female community is what’s set Lounge Underwear apart and their sleek website and social media pages celebrate women of every shape and size.
It’s certainly a long way from Mel’s original dream of going into dance and musical theatre. Husband Dan – whom she started dating when they were both just 16 – is partly to blame, she admits. He was always going to be an entrepreneur and had already tried his hand at a number of successful ventures before they landed on Lounge.
“We were together all through uni,” she explained. “It was that last year in 2014 when we talked about me taking a pocket of my student loan and him taking a pocket from the previous businesses he’d been running. We wondered could we put that together and see if we could build something when I graduated.”
They set up a company called Fashion Eyes, initially buying dresses from China straight off the lines and selling them on eBay. After developing that into a website, they got to grips with how the influencer market worked and applied that learning to what would evolve into Lounge Underwear. In those early days Mel worked full-time at Global Radio back in Birmingham – partly because there was an expectation to get a “proper job” after a degree.
“There was no chance I was just going to run off and be an entrepreneur,” she said. But as Lounge began to take off, and buoyed by healthy sales projections, Mel decided to take the leap and join Dan full-time. She had a new-found confidence, partly through her experience at Global, where she says her manager showed her what it meant in terms of being a working woman with goals and career aspirations.
Lounge was built backwards, said Mel – they had a marketing strategy and fitted a product around that.
She explained: “For us, it was a conversation around what is going to be cheap, small to store, something that will slip through a letterbox when you post it, lightweight so not expensive to ship, easily brandable – we had those criteria and underwear ticked those boxes for us.”
Even so, seemingly simply designs such as a triangle bra set proved trickier than first appeared. “We bought all the different components ourselves and took all the pattern pieces and cut around every single pattern. So for the first triangle bra it was actually eight or nine different patterns and shapes. We’d create piles of them in my mum’s living room and send them off to a lady in Bulgaria who’d stitch them up for us.
“We put our first £1,000 into our first 100 sets and that was our stock. That was also our marketing because we sent a lot of that product off to our influencers.”
Lounge Underwear is perhaps the perfect example of influencer marketing. From the get-go Mel and Dan saw results. “The influencer space was so different to what it is now,” said Mel. “Back then you’d give them the product and that was payment for the advertising. Dan and I started in my mum and dad’s box room. We used to sit back to back just contacting different influencers who we felt resonated with what we wanted the brand to do.”
It was a brutal and thankless task. “A lot of people would never reply,” continued Mel. “We’d get the odd one or two who would see what we wanted to create. Back then we only had a couple of hundred followers so we had to gain that trust from people that we were a reliable brand and a luxury product.”
Today they have 2.4 million followers on Instagram alone. The simplicity of their brand is the key to their success, thinks Mel, which resonated with people all over the world.
“We had a real vision of what we wanted the product to do. When we launched the website we had one order on that first day, which sounds like nothing but felt epic. We were sat by the fire around October time and an influencer posted in Australia and our first sale came through almost straightaway. And we thought, ‘Oh, we’re on to something here’. And it kind of just started to snowball.
“We used to get notification emails for every order that was placed. It went to eight or 10 a day and it got to a point where it was going into the hundreds. And we said, ‘We probably should turn those emails off now’.
“Both of us from day one felt we were on to something. It’s that confidence in those early days of not putting a ceiling there and allowing those ambitions to be big. That confidence just to keep moving forward is what you need in order to drive a business.”
They did their first Black Friday sale from their front room with just the two of them packing orders. They made £64,000 over the weekend which was “absolutely insane”. This Black Friday they took 25 orders a second and delivered half a million packages. In 2020 their web sales totalled £13.8m and this year they’re forecasting almost £60m.
Covid has “turbo-charged” their business growth, Mel said. “The strategy still existed and performed in the way we planned,” she explained. “But it was elevated because people were working from home, not spending their money in the pub or not buying an outfit for a night out. But they still wanted that sense of luxury at home and we’re the perfect product for that.”
Developing and growing Lounge Underwear has been “a rollercoaster” for the pair. “Because everything moves so quickly with the business, it’s like you’re constantly on a treadmill that never stops,” said Mel of the past five years. She’s had to get to grips with how to manage people.
“We’ve got over 100 staff now and there’s people younger than me and older than me. I’m learning every day what it means to manage people but people management is my baby.”
While Mel is the creative head, Dan manages the strategy, finances and scaling of the business. Their relationship is absolutely integral to the success of their business.
“You do pull up to this huge building and think, ‘This all started in my parents’ box room’,” she said. “And we’ve done it in the space of time that we have. It does blow my mind and it blows Dan’s mind too.
“It’s very cliched but staying humble, keeping your feet on the ground, and remembering why you did it in the first place is important. We didn’t have two pennies to rub together really in terms of what we had at the beginning when we were living with my parents, planning to move out but not really knowing when.”
Even when their names are listed alongside Ed Sheeran and Welsh entrepreneur Alex Mills, neither Dan or Mel stop to pat themselves on the back.
“We’ve really grafted and we’ve put in a lot of time into building the business,” said Mel. “We’ve worked to create the beast that we have and when you read a story about yourself in The Times it’s like, ‘Pinch me - how has this happened?’.”