Gym+Coffee’s Oz web move as sales surge
A digital-first policy has meant that the brand has thrived — not just survived, chief executive Niall Horgan tells Gabrielle Monaghan
GYM+COFFEE, a Dublin-based athleisure brand which counts rugby legend Brian O’Driscoll as a shareholder, has opened an online store in Australia and a pop-up shop at Kildare Village.
It comes as the fitness-inspired clothing company bucks the fashion retail sector’s downward trend.
Online sales, which generate about half its revenue, surged 800pc during lockdown as consumers confined to their homes opted for comfortable casual clothing.
As a result, the company has revised up its full-year growth forecast to 300pc from 200pc.
As well as its expansion down under, the retailer will open its largest ever permanent store at the Blanchardstown Centre in September. The move was slated for April but was postponed by the pandemic, according to chief executive Niall Horgan.
Gym+Coffee already operates shops at Dundrum Town Centre, Liffey Valley, the Crescent Shopping Centre in Limerick and Mahon Point in Cork, as well as a US online store.
Horgan and fellow returning Irish expats Diarmuid McSweeney and Karl Swaine launched Gym+Coffee online in 2017 after they were inspired by the active outdoor lifestyles they’d enjoyed while travelling and working in Australia and California.
ACCORDING to an old Chinese proverb, a crisis is an opportunity riding the dangerous wind. And for Gym+Coffee, an Irish athleisure brand beloved by health-conscious millennials, that opportunity came during lockdown, when its online sales soared 800pc. Athleisure — namely casual, comfortable clothing suitable for both exercise and everyday wear — was already the world’s fastest-growing fashion category before the arrival of Covid-19.
But when offices, bars and restaurants shut and workwear and occasion wear became redundant, consumers both working from home and working out at home increasingly shopped online for athleisure.
This proved a boon for Gym+Coffee, a brand inspired by the active lifestyle its three co-founders enjoyed while travelling and working in Australia and California. While the company was compelled to shut its four Irish stores in March, its origins as an online-only brand, generating half of its revenue from online customers, meant it was in prime position to benefit from the athleisure craze.
But there was a hitch. The pandemic meant Gym+Coffee’s suppliers in Indonesia, China and Singapore were shut for a couple of months and the cost of international freight jumped from $3 or $4 per kilo to $25 (€21) a kilo, says Niall Horgan, the chief executive and one of its co-founders. Customer orders for €65-leggings and hoodies couldn’t be fulfilled on time.
“There were only a certain amount of flights from Asia and you were competing with Apple and other big brands for those flights, so we couldn’t stretch to that,” the 34-year-old says from his hotel on the shores of Lough Derg, where he’s relaxing on his first family holiday since the crisis.
With shipping taking up to 15 weeks to reach Ireland, the Corkman was in a bind. So, in April, he reached out to fellow Corkonian Liam Casey — aka “Mr China” — for help.
“We were running out of options but we knew that our accountants knew Liam and his company, so we essentially threw out a Hail Mary to see if they could connect us with him,” Horgan says.
Casey, the founder of logistics and supply chain giant PCH International, was more than a tad busy sourcing millions of surgical face masks, gowns and visors from China for Irish healthcare workers. Plane-loads of the personal protective equipment were landing in Ireland, funded by €10m from U2.
“Within 24 hours, Liam rang me himself to say he could help us out,” Horgan says.
“We changed up our entire supply chain, storing products and fulfilling orders from Liam’s warehouse and then sending them directly to the customer.”
Long-established fashion retailers like Oasis, Warehouse and Debenhams — already struggling with low margins, high rents and online competition — fell like dominoes as the pandemic restrictions swept through the high street. But even after Gym+Coffee’s stores shut at Dundrum Town Centre, Liffey Valley, the Crescent Shopping Centre and Mahon Point, its online-first strategy helped it weather the crisis. As a result, the company has revised up its full-year growth to 300pc from 200pc and is ploughing ahead with expansion, albeit on a pared-back scale. Over the last week, Gym+Coffee opened both an Australian online store and a pop-up shop at Kildare Village, its sixth pop-up to date.
Horgan’s discipline in steering the nascent brand through the crisis likely stems from a childhood steeped in the GAA. Growing up in Kerry Pike, a picturesque hamlet that’s less than a 10-minute drive from Apple’s headquarters on the northside of Cork city, Horgan trained up to 10 times a week with different hurling and football teams. When he was 17, he captained both the Cork hurling and football minor teams.
Despite coming from a family of teachers, Horgan knew his future lay in business, so he studied commerce at University College Cork.
“My final-year project at college was a comparison of Nike, Adidas and Puma, and how they grew over the years and the different strategies they deployed to build their business,” he says. “I was fascinated by brand building.”
It was at business school that Horgan met Diarmuid McSweeney, who would go on to become a co-founder of Gym+Coffee with Karl Swaine, a one-time visual merchandiser for the fashion chain French Connection.
Horgan graduated in 2008, when the global economy was imploding, so he took a year off to travel and “avoid the reality of a recession”. He followed the well-worn backpacking route across Asia, before moving to Australia, where he worked in a café-bar, and on to New Zealand. He then flew to San Francisco and drove a campervan cross-country to New York.
Horgan started his career in earnest when he settled in Dublin in 2010, working as a sales executive for Sky TV. He clinched a job at Twitter’s new Dublin headquarters in 2012, when he was just one of 10 employees in the office. As head of Twitter’s sales partnership for Europe, the Middle East and Africa, he looked after large advertisers and revenue across more than 30 countries. The following year, he moved to Slack, the corporate chat platform.
It was while at Slack that he, McSweeney and Swaine developed Gym+Coffee as a side-hustle, which finally enabled Horgan to marry his passion for sport with brands.
“At Slack, I was spending an awful lot of time in California and Vancouver, and Diarmuid was just after moving back from Australia, where he had spent a number of years working in marketing agencies. We were chatting about the lifestyles in some of these markets, particularly California and Australia, and about how passionate people were about exercise and using that as a way to socialise — it was all about getting up early, going for a run with your friends, and grabbing a coffee afterwards.
“We really enjoyed that type of lifestyle when we were over there and you could see that was starting to take off in Ireland. We felt there was a business opportunity because the uniform that people were wearing while enjoying this lifestyle was changing and people were getting into more international brands that were in this space. But there was no Irish brand representing that lifestyle shift and athleisure was taking off at a crazy rate.”
After a misstep that saw the trio miss the busy Christmas period of 2016, Gympluscoffee.com launched in January 2017, with their signature hoodies. They used clever digital marketing and events to spread the word, and that summer ran free outdoor workout events, which they called the Summer Stretch Series, to promote the brand. Fitness events still play a major role in Gym+Coffee’s marketing — even if those events had to move online during the pandemic, with workouts on Instagram Live for example.
Then it was time for the entrepreneurs to properly commit: all three gave up their full-time jobs and invested their collective life savings into buying a stock of hoodies. They began gifting some of their products to celebrities such as Joe Wicks — otherwise known as The Body Coach — and to former rugby player Brian O’Driscoll, who in 2019 invested in the business and became its head of community.
“The biggest issue we constantly face is working capital as so much of our capital is tied up in stock and you’re not getting much support from the banks,” Horgan says. “So we took seed investment from a couple of great individuals who helped bring the business to the next level.”
Despite planning to operate Gym+Coffee as just an online brand, the entrepreneurs grabbed an opportunity in 2018 to run a pop-up store at Dundrum Town Centre. What was initially designed to be a two-week run has become a permanent flagship base. The shops, which the company calls “clubhouses”, are typically decorated with recycled pallet furniture and have a café vibe. Gym + Coffee often starts out with a pop-up store to see how sales perform before taking out longer-term leases.
Despite “rumours of retail being dead, that certainly hasn’t been the case for us”, Horgan says. “We’ve found that when we opened up stores, they really complemented the online part of the business. The store is a great place for us to interact with our community and customers and a great place for them to get know the brand and our clothing.
“We were nervous about launching at Kildare Village last weekend because it was our first new store post-lockdown. But it was a phenomenal weekend for us, bringing in double what we expected.”
But Gym+Coffee’s early ambitions to open physical outlets outside Ireland have been stymied by Covid-19. It had hoped to open an international store this year, having held talks with potential landlords in New York and London, but instead plans to unveil two new shops abroad in 2021. For now, the Dublin-based company is focusing on opening its largest-ever “clubhouse” at the Blanchardstown Centre in September and it expects its workforce to double to 104 by this time next year.
“We have to count our blessings that during this crisis we were in the right category of what people were comfortable to spend some money on,” Horgan says. “You could wear the clothing working from home and still look respectable on a Zoom call. If anything, Covid is going to accelerate that trend. I recently met a friend who is an investment banker and he was talking about how they were going casual. I thought ‘well, if they are going casual, we’re definitely on the right road’.”