laitimes

The brothers who took out a loan to start a business used 9 years to achieve a valuation of 1 billion for a sports brand

author:Sports Industry Ecosystem
The brothers who took out a loan to start a business used 9 years to achieve a valuation of 1 billion for a sports brand

Recently, Bayer Leverkusen won the first league title in 120 years, which moved all those who love football and sports.

There is no doubt that the legend of the pharmaceutical company this season will become a significant part of the history of football, and similarly, this season's jersey will become one of the "collectibles" of fans. According to statistics, this jersey, sponsored by the British brand Castore, has also become the 7th champion brand in the history of the Bundesliga.

Since its inception in 2015, Castore has been known as the "Rolex of sports brands" due to its unique design and high price. After a funding round in December last year, the brand is now valued at nearly £1 billion (9 billion yuan).

Back when Castore was founded nine years ago, brothers Thomas and Philip needed their parents to mortgage their home to finance their start-up.

The story of Thomas, Philip and Castore is like the story of the pharmaceutical company this season, from the initial loan to the highlight of today, they have not only changed their own destiny, but also changed the landscape of the world's sports brands to a certain extent.

The brothers who took out a loan to start a business used 9 years to achieve a valuation of 1 billion for a sports brand

Loan to start a business, marketing all rely on "deception"?

Brothers Thomas and Philip, the brand's founders, were born into a modest working family whose parents wanted them to become professional footballers, and the brothers began training at an early age, but they soon realised that they didn't have the talent to become top athletes.

The brothers who took out a loan to start a business used 9 years to achieve a valuation of 1 billion for a sports brand

Thomas played for Tranmere Rovers from the age of 8 to 21 Picture: BBC

In 2013, the duo ended their careers and moved to London to work in finance, with the older brother Thomas working at Lloyds Bank and the younger brother Philip working at Deloitte.

During their time in London, they came into contact with sponsors of sporting events as well as investors from the fashion and sports industries. After communication and market research, they were keenly aware of the lack of high-end products in the men's sports market, so in 2015, the brothers officially founded Castore.

Due to insufficient savings, the parents also mortgaged their family house to support their brother's entrepreneurial plans.

The brothers who took out a loan to start a business used 9 years to achieve a valuation of 1 billion for a sports brand

图源:The Times

But for a start-up, it is obviously difficult to build a "high-end" brand. Especially for the two brothers who have no money and no background, if they want to promote their own brands, they can only "find another way"

In the early days, they spent a lot of time hanging out outside the upscale gyms in West London, trying to encourage personal trainers to receive free Castore training gear. They believe that when the coaches' clients see the new brand, they will follow the trend and make a purchase, and the coaches will receive a commission for it.

"It was our only marketing strategy at the time," says Thomas.

Later, Castore started to get on the right track, and they used a similar tactic to "trick" British tennis star Andy Murray as their first major partner.

"We would ask the people around him, such as coaches, physiotherapists...... Giving away gear, so he keeps seeing the product and the brand and feeling its fabrics."

"That's how the story began."

The brothers who took out a loan to start a business used 9 years to achieve a valuation of 1 billion for a sports brand

Source: Castore

The "Murray effect" was also immediate, with visits to Castore's website rising from 25,000 monthly visits in April to 47,000 in June in 2019, according to SimilarWeb. With Wimbledon taking place, the two peaks of access in the first week of July and Murray's match came at the same time, with figures reaching 12,000 and 10,300.

Murray's addition not only made Castore well-known, but also recognized his professionalism more widely. After receiving the investment, Castore also began to extend its sponsorship tentacles to many fields, rugby, F1, golf, cricket and so on.

In order to gain a larger market, Castore has chosen to focus on the field of football.

The brothers who took out a loan to start a business used 9 years to achieve a valuation of 1 billion for a sports brand

Entering football, the "high-end" has been questioned

For the British, football clearly has a more unique position and greater influence. Similarly, the football field is a huge piece of cake for sports brands.

A five-year partnership with Rangers in 2020 opened the door for Castore to enter the world of football.

The brothers who took out a loan to start a business used 9 years to achieve a valuation of 1 billion for a sports brand

Source: @Rangers

However, equipping individual athletes and equipping a football team with a large fan base are very different concepts.

Tom previously told The Times, "If we had launched the spring/summer collection a few weeks late, no one would have noticed, but if we had launched the football shirt two hours late, there would have been thousands of angry fans expecting an explanation."

In addition, the fierce football competition has ushered in the biggest crisis for the quality of the product that the brand is proud of.

Castore's Feyenoord and Wolves jerseys were frequently torn during the game; The jersey of the players is completely wet and cannot be dried quickly, which brings an extra burden; The team emblem on the player's version is upside down and peeling off, and even the fan's version of the jersey has frequent flaws......

The brothers who took out a loan to start a business used 9 years to achieve a valuation of 1 billion for a sports brand

图源:The Athletic

At the same time, the design of the jersey has also been questioned, and in the previous ranking of the worst designed jerseys in the Premier League, Castore even made a number of selections.

In response to all kinds of doubts, the brand insists that these are just isolated cases, and the quality of its own products is no worse than traditional brands such as Nike and Adidas.

"As a new brand, many people will look at us with a higher standard, and every time something goes wrong, it will be ridiculed. It's not unique to Castore, but it's a question and injustice that new brands have to endure."

"We don't mind these small issues, but they also push us to keep challenging ourselves and do better in the future."

However, the team obviously has little patience to wait for the growth of the brand, and Premier League teams Aston Villa and Newcastle have ended their cooperation with Castore early and switched to Adidas.

Luckily, in Castore's first year of foray into football, the partnership with Rangers ended Celtic's nine-game winning streak in the Premier League.

Subsequently, Sevilla and Athletic Bilbao won the championship after a long absence, and Castore also became the focus of the football stadium several times with its partners.

This also has to lament the brand's vicious sponsorship vision.

The brothers who took out a loan to start a business used 9 years to achieve a valuation of 1 billion for a sports brand

Source: footyheadline Source: footyheadline

Looking back, as a rookie in football, why did Castore get so many teams?

The brothers who took out a loan to start a business used 9 years to achieve a valuation of 1 billion for a sports brand

"Walls are meant to be climbed"

Looking back at Castore's development story, it began with a slightly rebellious idea: "Walls are meant to be climbed."

Before starting their business, the brothers got a lot of advice from industry experts: don't do sports-related industries, you'll never succeed, and this market is dominated by Nike and Adidas.

But the brothers had only one thought at the time – let's prove these people wrong.

As experts say, it's rare for a new brand to enter the market in football or even sports, and even fewer to work with Premier League-level teams.

"So we've been pushed to a whole new level, and a lot of teams are wondering, 'Who's this new guy?' Are they short-lived? Would working with them be the right choice? ’」

For many non-top clubs, signing with traditional brands does not get exclusive services, and the behavior of "set templates" of team uniforms every year has long made many fans dissatisfied, which also makes Castore see an opportunity to dig into the wall.

The brothers who took out a loan to start a business used 9 years to achieve a valuation of 1 billion for a sports brand

Source: footyheadline

In addition to this, Castore has been able to win the club's favor thanks to the innovative sponsorship model it offers.

The traditional shirt sponsorship approach is this: the jersey brand pays an annual fee to the football club for the right to use the club's IP and sell branded clothing, while the jersey manufacturer receives the majority of the revenue generated from the sale, and the club usually only takes a 10% to 15% cut of the jersey sales.

However, the agreement signed by Castore is structurally more incentive, with the club receiving a higher share when the agreed sales target is reached.

In short, as more jerseys and other branded apparel are sold, the signed club has the opportunity to significantly increase its revenue – which will allow the team to be more aggressive in promoting products such as their own jerseys, which is a win-win situation for the brand.

Up to now, Castore has signed more than 50 sports teams, including cricket, football, tennis, motor racing, rugby, cycling and many other sports.

The brothers who took out a loan to start a business used 9 years to achieve a valuation of 1 billion for a sports brand

However, it can be seen that the scope of Castore's sports is also more popular in the European and even British markets, especially in the audience groups such as racing, cycling, tennis, etc., which have more spending power - this is also the confidence that the brand can sell at a higher price than brands such as Nike and adidas. In addition, cricket, rugby and other fields are also relatively weak marketing positions for traditional brands, and Castore will have more advantages as a local brand.

It is worth mentioning that even though Castore has received many investments, it has not blindly expanded, and currently has only 11 offline stores, which are still mainly online business.

At the end of March, Castore also entered into an exclusive sub-licensing agreement with Umbro: the former will be able to market the Umbro brand in the UK, Germany, Austria, Switzerland, Belgium, the Netherlands and Denmark.

The brothers who took out a loan to start a business used 9 years to achieve a valuation of 1 billion for a sports brand

Source: Castore

This is also an important step in the brand's strategy to subdivide the brand after receiving a £145 million investment, further deepening its football and sports team DNA.

"This will allow us to break the traditional dominance of Nike and Adidas," the announcement said.

In recent years, Chinese brands such as lululemon, On, Vuori, etc., which also focus on high-end sports lines, have risen one after another, but there are few brands like Castore that confront traditional brands head-on in the traditional field.

As an emerging brand, Castore's rise is also an excellent example for other brands in the industry to market at sporting events.

Although this wall full of "tradition" has not yet been overcome, the winged Castore has already aimed at the vast sky.

As Thomas has previously said, the brand is like a youth team player who has gone through many tests and is now in the "first team".

Read on