When Covid hit, House of Brands (HOB) was worried about what lay ahead for their successful traditional retail clothing business. “It was hard to run an apparel business during the pandemic,” explained Kevin Frivåg of HOB Sweden.
So to counter the pandemic’s impact on their retail stores, HOB decided to explore moving online. Their search for the perfect partner to help them get up and running with eCommerce led them to Zalando — a leading European online platform for fashion and lifestyle that delivers to customers in 25 countries.
After an excellent experience getting to know Zalando’s platform and its team, HOB leveraged Zalando to set up and manage their eCommerce business. Since day one, HOB has seen huge success working with Zalando.
“Every month the sales are exceeding our expectations. We’ve been blown away by the success,” explained Kevin.
The need for capital to match HOB’s ambition
HOB’s move online generated incredible growth for the business. Now, Kevin says they’re looking to build on the success they’ve seen with Zalando to expand the business and keep the growth rate high.
However, with this huge growth comes an even bigger need for capital.
“We've been growing so fast over the last year,” explains Kevin. “But it’s extremely capital intensive. You need a lot of liquidity in the business at any time.”
Every eCommerce business faces the same challenge when it comes to scaling — inventory orders lock up a large amount of your cash flow. “You have to pay a percentage to your supplier in advance, the rest when it arrives,” notes Kevin.
To effectively grow an eCommerce business you need access to funding. HOB is no stranger to business funding and has worked with traditional financial institutions to access the capital they’ve needed to scale in the past. But when it comes to high-growth eCommerce, traditional financial options aren’t as feasible.
“Banks are not set up to understand and fund eCommerce businesses,” said Kevin. “They don’t understand the working capital and logistical problems we face — which makes it hard to justify the need for funds.”
Working with Wayflyer
Through Zalando, HOB was introduced to Wayflyer as a way to help the business find a long-term solution to its working capital needs.
“We were delighted when Zalando approached us about Wayflyer. Wayflyer’s funding was exactly what we needed. The process was super quick and easy - taking us less than 10 days to secure funding,” explained Kevin.
The funding from Wayflyer enabled HOB to increase its inventory position and stock up ready for growth — especially around Black Friday / Cyber Monday and Q4’s shopping season.
“Straight away, this has allowed us to take advantage of the momentum we’ve built up over the last 2.5 years. We are now in a position to purchase up to 40% more inventory than we previously could. Enabling us to expand the business and meet our growing customer demand.”