'I'm not looking to sell yet - but if I do I'll want more than £142m, or what's the point?' - Marc Worth

HOW I BEAT THE ODDS: The founder of WGSN and Stylus on reining in out-of-control costs and why he decided to start all over again.

by Adam Gale
Last Updated: 01 Feb 2017

At first, WGSN was just a side project. I thought I'd be in Nottingham for the rest of my life, running our small family clothing business, Heatseal. My dad had thrown my brother Julian and me in at the deep end. As soon as I got my L-plates, I was driving around the country, selling textiles. For the last 10 years of my dad's life we more or less ran it ourselves.

One of our biggest problems at Heatseal was waste. Most of the designs our graphic artists produced weren't picked by clients. In 1996 we had the idea of putting the surplus artwork on the internet and selling the copyright.

Neither of us had actually turned on a computer before, but we knew there'd be a market. Retailers and manufacturers looking for ideas either had to buy expensive trend forecasting books that came out twice a year, or travel the world taking sneaky photos of shop windows. Our reporters would take the pictures for you, for less cost and hassle.

It started as one day a week, but WGSN as we called it soon took over. We mustered £1m by remortgaging our houses and the Heatseal building, but that didn't go very far. Fortunately, these were the boom days of internet fundraising. We raised £20m for a 30% stake, three days before the dotcom bubble burst.

WGSN grew rapidly after we closed Heatseal and moved to London, but by 2004 our costs were out of control and we were six months from running out of cash. Our investors wanted us to stop taking the ridiculous remuneration packages we'd negotiated (including six-figure relocation expenses from Nottingham to London - annually), but instead we remortgaged our homes and took a knife to our other costs. After three months, our monthly expenses had dropped from £1.2m to £700,000.

That was enough to make us profitable again, but our investors wanted out. We bought back their share for £8m. In 2005, we sold WGSN to EMAP for £142m cash. It was a huge relief never to have to worry about money again.

For a while I was content with being every wealth manager's new best friend, but I missed running a business so in 2009 I started Stylus, a subscription service that's similar to WGSN but covers consumer behaviour across all creative industries, not just fashion. My brother thought I was mad to go business again.

There's been a bit of animosity from WGSN. I poached two of their senior staff when I started, then bid on a rival they were also bidding for. When I didn't get it, I appealed to the Office of Fair Trading on competition grounds, which delayed their acquisition by four months. At the same time, I started our fashion division, which is slowly chipping away at their unhealthy market dominance.

Stylus has 50% year-on-year growth and is cash break even. It can be much bigger than WGSN. I'm not looking to sell yet, but if I do I'll want more than £142m, or what's the point? Whoever buys it might look a little more closely at the non-compete agreement this time.

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