Putting the style back in business with Cloud Nine entrepreneurs
A HAIR products firm created by the founder of ghd is reaching for the skies after sales have been boosted by major export growth.
Ilkley-based Cloud Nine was set up by Robert Powls, an ex-Vidal Sassoon hairdresser who opened his first salon in Keighley in 1974, charging 35p for a haircut.
He founded ghd with two partners in 2001, and walked away with £15m after a buy-out in 2006.
Managing director of Cloud Nine, Martin Rae, is the stepson of founder and chairman Mr Powls. With his brother Gavin, he has taken over the reins of the fast-growing business.
He spoke to TheBusinessDesk.com about the firm’s impressive export credentials (getting a nod inThe Sunday Times BT Business Export Track 100) and the innovation which makes them so unique.
Mr Rae said: “After we left ghd we had three years where we couldn’t get involved in the hair industry, so back in 2009 we began the launch of Cloud Nine.
Many people will inevitably compare the brand to the ghd range, after chairman Mr Powls broke away from the firm but Mr Rae said: “We’re never frightened of that comparison. Where people want an alternative, we offer that.”
Their export mission expanded from the UK into Australia, with a manufacturing facility in Seoul, South Korea to supply thei increasingly worldwide markets. Mr Rae said: “The business model was similar to ghd’s initial offering, selling direct to the professional.”
However they too diversified, with a mixed model of a network of UK distributors on board, and direct sales after launching their website in 2010.
Mr Rae continued: “We’ve had a lot of interest from overseas, about taking the brand on. So much of the decision is based around whether they can support the brand – it’s about alignment with the right people, it’s never going to be perfect, but as close as we can get, and of course we’ve made mistakes before.”
With five key export companies, the firm set up their German subsidiary in 2012 in Stuttgart.
“Australia is our main one, it was always a great market for ghd and we have a lot of history there for selling high end products.” Mr Rae said.
“For retailers, the Australian market is dominated by salons. Salons have lost out here to online retailers such as Amazon, but stylists are still trusted over there to recommend and sell products to people.
Cloud Nine’s distributor in Adelaide is HairCare Australia, with whom the firm has relationship going back to 2010. Now, 35% of the firm’s business comes from the Australian market.
English-speaking countries make up a lot of Cloud Nine’s market, but Mr Rae said: “We also look to any place where hair irons have a good market share and they appreciate high end products, such as Italy and Spain. The recession hit especially hard in those markets and it will take time to recover, but the foundations are there.”
However it wasn’t all plain sailing for Cloud Nine. The firm has never sold in US as well as in the UK and Australia because “they don’t accept the precept that temperature control is key to our products, compared to our competitor’s one heat level concept. Robert’s background is hairdressing, so we focused on the needs of the hairdresser first.
“If we get that right then consumers will get great products too.”
Future plans involve remaining on the upward trajectory for export growth, though “we’re not on a world domination exercise” Mr Rae said, “Growth will only come with the right people.”
Employing 30 staff at their Ilkley product development base, Mr Rae said that the real number, including reps and distributors, would run into hundreds across the globe, and though he may not call it world domination, it looks like it.
