Case Study – I Love Ugly
Unique Design for Discerning Customers
Valentin Ozich had to do a little exploration before he struck the right creative chord. Back in 2008, the illustration collective he founded in Auckland, New Zealand, came up with the I Love Ugly brand, which first applied to a concept for a magazine and a t-shirt design business.
Finally, the quirky, catchy name found its place in the world, and exploded. I Love Ugly went from local start-up to international success story in a matter of a few years, offering men a selection of pants, shorts, t-shirts, outerwear, accessories, and even cologne to customers in every major market.
“The goal is to be the best premium lifestyle streetwear brand in the world,” explains
Gordon Grant, CFO for I Love Ugly. “The mission is to inspire our customers to achieve their aspirations. It’s for the quite discerning person who wants to be different, not mainstream.
“It is all about being creative, innovative,” Grant continues. “Valentin wants something that’s slightly different out there that makes people say ‘Hey, I’ve got I Love Ugly on’.”
Channels Perfected to Strategy
I Love Ugly’s growth arose from a careful strategy to cultivate brand awareness through select online and retail channels. The company shuns the concept of saturation in favor of a strategy that maintains brand mystique to preserve the unique quality of its design.
“People that buy our products don’t want to see them as mass market products, but rather as quite niche,” Grant says. “The supply chain directly reflects that business model.”
I Love Ugly today reaches customers through geographic market-focused eCommerce websites using Magento. It runs two flagship retail locations in its home-country, and wholesales through independent, premium streetwear and footwear retailers in the US, Canada, Europe, Australia and New Zealand.
It also makes heavy use of social media platforms, particularly Instagram and Facebook. It’s a natural fit for an apparel brand sharply focused on offering one-of-a-kind design selections. As Grant describes it, the strategy calls for discrete and subtle brand control.
“We keep it quite tight,” Grant says.
Behind the Scenes
If I Love Ugly’s marketing strategy is to maintain tight control of its brand, it also keeps its supply chain tight. The company uses a limited number of factories in China to produce its entire range of clothes, and imports the finished goods to a single warehouse in Auckland, from where it dispatches its B2B and B2C orders.
“Everything comes out of there and we send by courier around the world,” says Grant.
The supply chain, then, was as discreet as its marketing strategy. But when Grant joined I Love Ugly in 2016, he realized inventory management needed improvement.
“We were dealing with a very old, dated system that needed updating,” he says. “It was very hard to get good quality information on time to make good decisions.”
To begin with, while the company had grown into a multi-million dollar international business, it still tracked inventory using spreadsheets, which not only involved a lot of manual data entry, but made it difficult to extract information to maintain the right stock levels.
“It meant we were ordering blind from our factories and we weren’t matching those orders to what we were selling, at times,” Grant says.
This led to occasional overstock in the warehouse and inconsistent stocking of particular color-size combinations. Grant says this insufficient transparency across the business led to a discernible drag on cash flow.
Help Comes From the Cloud
The company was also using server-based accounting software that proved equally inadequate to the company’s needs. Grant went looking for a more dynamic solution to help I Love Ugly rein in costs, improve cash, and gain the real-time visibility it lacked.
I Love Ugly opted to use Cin7 and switched from its legacy accounting software to Xero.
“It’s very obvious that cloud-based solutions are the place to be to get the efficiencies, to get to the cutting edge where a business wants to be,” says Grant. “There is more cost associated with desktop solutions, and the resources to run those systems, and cloud based solutions don’t need a lot of people to run them. They’re a lot smarter, too.”
Cin7 gave I Love Ugly the real time information it needed to lower its costs and to place the right orders at the right time with their factories.
“I definitely have a better idea of our landed costs, and reordering, that has been very good,” Grant says. “If you don’t run your stock right your business can run into trouble.”
While the company has only used Cin7 for a short time, Grant says the switch has saved I Love Ugly a “quite large” amount of money.
“It’s just having the information at your fingertips which can be immediately understood and without the need for a bunch of spreadsheets,” he says. “It simplifies your business, makes it a lot easier to run, and a lot more transparent.”