Figleaves.com chairman Daniel Nabarro is on a mission - and he's eager to reveal all. After waiting patiently for some 30 minutes, explaining in detail the online lingerie retailer's plans for the next three years, he finally, and politely, asks whether he can talk about what is really on his mind.
He reveals that he is hunting for a retailer to run the business, as he steps down from the role of chief executive. "I don't wear bras," Nabarro jokes. "I'm a businessman, a serial entrepreneur, but Figleaves is now poised for a first-class retailer to take over."
Nabarro co-founded Figleaves with Michael Ross - now ecommerce manager for Icelandic investor Baugur - in 1998. The business has since undergone great change, most notably in its management teams and product offer.
Since the latter part of 2006, Figleaves has lost four key players in its buying and merchandising division, including director Ryan Murray. The new team of 20 is now headed by Mark Patterson, who joined last October from supplier Courtaulds.
The firm has also created a new department called online merchandising. "Buying and merchandising is one of our most important functions, and 2007 will be the year of the supply chain," says Nabarro. "Despite having built up a technology-focused business with great marketing and product, we hadn't - until now - streamlined the buying and merchandising side of the company."
The installation of a new system from SAP will, according to Nabarro, allow the business to conduct better financial analysis and review profitability of all its 200 brands. Surprisingly, until now Figleaves has generated its process orders manually. "It will help us improve business in three ways," Nabarro explains. "It will increase sales, decrease the level of discounting, and allow us to make more margin on what we do sell."
The new system is also expected to enhance relationships with suppliers. Nabarro believes the lingerie industry is lagging behind, and says that even the supermarkets, which are still relatively young players in the fashion industry, have slick operations for their clothing arms.
He hopes to have the new system up and running from February 14 2008. "A significant percentage of our suppliers are unreliable. As we develop this supply integration, we won't work with people who don't deliver on time," says Nabarro. "We pride ourselves on service and we're getting choosier about who we work with. Our top 30 brands are very stable, but if people are unreliable and don't give us the right terms, we won't work with them. When integration is complete, we'll be able to save money on the operational side. We're here to make money."
But making a profit is something that Figleaves has yet to do. Despite turning profitable in the UK for the first time in 2004, the US-owned company reported pre-tax losses of £4.2 million for the year to July 2 2006. The US market accounts for 20% of its total sales, which suggests that there are improvements to be made across the water. Earlier this year, Figleaves closed its New York office and now the company operates solely from the UK.
A source close to Figleaves blames the company's losses in the US on product and an under-developed brand. "The product hasn't always been US-friendly," he explains. "The US lingerie market is also eight times the size of the UK's, and its online offer is much more sophisticated - all the department stores sell online. It's a competitive market and Figleaves needs time to establish itself there."
Yet Nabarro cites the US market, where the company has had a presence for the past three years, as one of its growth areas, and says the business will be profitable as a whole next year. "Having an office in New York was a mistake, but we have improved our efficiency and profitability in the US by centralising our operations to the UK," he says.
He is confident he can crack the US and says the market will account for 30% of total sales as the business enters new countries. "The first four months of trading so far look very encouraging, with strong sales that have exceeded our expectations. Few ecommerce players ship to 96 countries, with extremely low levels of fraud, like we do," says Nabarro.
Launching into other markets is part of Nabarro's strategy for growth, and Japan is rumoured to be next on his hit list. But he insists that mainland Europe is the most likely target. He says: "We have plans to launch websites in other countries, in other languages and other currencies, but don't ask me when. It's commercially sensitive information," he smiles.
But it is possible to make an educated guess, given that Nabarro has hinted at floating Figleaves in the next two to three years in order to possibly enter the Japanese market.
The company is currently "well financed" to enter Europe without floating, and Nabarro's knowledge of the German market suggests it may be next. "Each website will generally look the same in different countries, but product descriptions in German for example, have to be a lot shorter, as sentences there can be very long," he says. "Product will be similar too, but it does have to be adapted. For instance, you need a big Triumph offer in Germany. But then you can't offer two-for-one promotions there. So everything is adapted slightly."
Nabarro says Figleaves will eventually enter the Japanese market as part of a partnership, but the company needs funding to do so. This, among other responsibilities, will fall into the remit of the new chief executive. Nabarro is looking for a leader, with knowledge of the fashion industry and, most importantly, with great communication skills. "I need someone who can engage with our customers and take the company public - something that I think will happen in the next two to three years."
As chairman, Nabarro will remain "very much" involved in Figleaves' future. With a 34% stake in the business, he sits on the board of directors alongside private equity firm Benchmark Capital Europe, which has a 38% share, and other major shareholders. But Nabarro remains cautious about floating the company. "It makes a lot of sense to go public, but public markets are fickle, so I wouldn't want to go in when it's in the doldrums," he says. He also doesn't rule out the possibility of accepting an offer from private equity houses.
Shifting the company's strategy from a fashion-led retailer to a basics-focused business last year was also the "right thing" to do, according to Nabarro. The split between fashion and basics used to be 70% to 30%, but basics now accounts for 55% of the business.
One challenge facing Figleaves, according to another company source, is not to become a discount retailer. "The danger in the online world is that companies are always offering customers different promotions," he says. "I shop at Ocado, for example, and I know that if I wait a couple of weeks, I'll receive a money-off coupon, so I delay doing my shopping until then. Shoppers are getting too savvy."
But Nabarro insists that Figleaves is not heading in this direction and compares the online retailer to a cross between John Lewis and Selfridges - John Lewis for the editing of its lingerie offer and Selfridges for its wide product range. "Before taking on brands like Pour Moi?, we were less well represented in the mid-to-lower market, so we needed to develop that side of the business. Figleaves is about offering ranges for everyone. You can be more things to more people on the internet," he says.
Although Figleaves dominates the world's online branded lingerie market, Nabarro still sees Marks & Spencer as his biggest competitor. In fact, he believes that M&S and other retailers will be forced to shift their focus to online retailing - and welcomes the move.
He explains: "The more M&S and others do online, the more it legitimises the lingerie business. When I started out, women said to me they'd never buy bras online. But now lingerie is as mainstream as anything else, and online fashion sales are stronger than ever. But does that mean people are spending more? I don't think so. The buying channels are just shifting to online. So I don't know how these retailers will keep their shops open and have an online offer. I think we'll see a lot of retailers closing."
Figleaves' marketing strategy is almost totally focused on online channels, particularly search engines. But as it looks to build a global brand and enter new markets, there could be an argument for creating a more consumer-led publicity campaign.
Asos.com chief executive Nick Robertson doesn't think a brand can be built online. "Our marketing strategy is totally different and our traffic is ahead of Figleaves in terms of hits," he says. "We have our own magazine and do a lot of consumer PR. Only time will tell which strategy is right. What Figleaves is doing might well work for them."
Nabarro certainly thinks so. "We are definitely online marketers," he says. As he walks around his north London office, entertaining the possibility of a Figleaves own label, you know this "serial entrepreneur" still has a few tricks up his sleeve.
DANIEL NABARRO: CV
2007: Chairman of Figleaves
2001: Re-branded Easyshop.com to Figleaves.com
1998: Launched Easyshop.com, a perfume and lingerie etailer
1992: Founded Wigwam Information, a network of estate agents
1984: Founded Inter-City Paging, a nationwide radio paging business, which he sold at the end of 1989
Education: Graduated from Clare College, Cambridge University, with an electrical sciences degree and MA
Hobbies: digital photography, video, DIY and horticulture.