Superbullish, not just bullish. That’s how recently installed Seafolly chief executive officer Paul Kotrba feels about the business and the swimwear category.
Kotrba, who most recently served as global retail executive for Donna Karan and DKNY, joined the swimwear firm — which includes the namesake brand, swim and resort line Miléa, swim chain Sunburn and swim and active brand Maaji — in January. The company has now entered retail in the European market with the first Seafolly store and inked a deal with Australian model Elyse Knowles as a brand ambassador in a campaign set to launch Monday. Meanwhile, he’s surveying how the company can grow in Asia, Europe and the U.S. while keeping its hold at home in Australia.
“I think there’s tremendous opportunity in this space across the swim category,” Kotrba said. “There’s a lot of segmentation in terms of entrants and historical players. I think for somebody like Seafolly with the brand strength we have, we can grow.”
The Seafolly business is diverse with 33 stores — 22 in Australia, seven in the U.S. and four in Singapore. A door at 133 Rue D’Antibes in Cannes has opened, the first in Europe for a market that accounts for 20 percent of the company’s overall sales.
“The reason we said we want to have a flag on the ground is that we want to be more engaged with our local customer in that way,” Kotrba said. “I still believe that brick-and-mortar in retail is important to our premium brand. That’s where you have the most connection with your customer and can really engage with them.”
France is one of the company’s better-performing countries, up 46 percent year-over-year. There’s also a wholesale business that has sold the collection to retailers such as Selfridges and Galeries Lafayette.
More stores in Europe are being considered, while the company continues to look at the shop-in-shop concept in department stores, the ceo said.
“We’re looking at a few other opportunities,” he said. “The way that I approach retail these days, because there’s a lot of disruption in that channel, clearly, is different than how I did in the past. The retail brick-and-mortar business as we know it has changed tremendously. So the economics might become favorable in some locations where we might like to have a store.”
In the U.S., Kotrba said he’s pleased with the presence of six stores and is in discussions on real estate in key metropolitan areas on the East Coast. The company is considering a Hamptons pop-up and another potentially in Florida.
“We’re looking to be a bit more creative with our retail footprint,” he said. “We’re testing new formats, looking at retail a bit differently than we have done so in the past.”
Kotrba turned to Seafolly’s sister brand Maaji, based out of Colombia, for inspiration. Maaji, he said, is growing in the U.S. and has experimented with a summer beach house concept in which key customers and influencers were invited for events. They’ve also pitched tents on beaches. There’s the possibility of a potential collaboration between the brands.
Kotrba has been studying the business in Asia, which is 5 percent of sales, but he sees plenty of opportunity. One hurdle boils down to cultural barriers and the idea among consumers there of covering up as much possible in the sun or staying out of the sun. Kotrba sees that changing with a new generation.
“The Chinese customer is leapfrogging the learning curve,” he said. “They’re much quicker in terms of embracing brands, embracing trends and I’m even thinking at some point we will follow their trends. But as it relates to swimwear, the global swim market is forecast to be close to $30 billion in the next few years. In China, swimwear is less than $1 billion today and that $1 billion is mostly driven by performance swimwear, fast-fashion and luxury. There’s no stand-alone fashion swimwear business like us in the greater Chinese market today, so we’re looking at this for us as an opportunity to be a trailblazer in that market. You need to be very, very well-educated and very well put together before you enter into that market because there are many different platforms and many different ways in and once you walk through that door, you’d better be in your best shape.”
The swim category’s fragmentation and entrants into the space could very well be a boon for Seafolly as Kotrba sees it given the brand’s 43-year-old heritage. He is ambitious in his plan to grow it into what he said is “the most iconic swim brand” by 2022. To do that, part of it will come through the growth strategies in international markets. Another part will focus on learning from newer players, those the company is humble enough to recognize its business is not safe from.
“Oh, there’s no insulation anymore,” Kotrba said of the competition and specifically digital brands. “These walls have come down. The barriers to entry are super low right now into this category and most categories, but what makes it interesting for us is seeing these digital-only, direct-to-consumer players coming in, jumping on trends and really sort of grabbing that attention. We see that as an opportunity to learn a few tricks from these entrants because we have a strong market position, which we’re looking to defend and grow.”