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The Drapers Interview: Chi Chi London's fast track to phenomenal growth

Brothers Gio and Daniel Najar are attracting more and more big-name stockists for their girly occasionwear brand.

Were you to meet Gio and Daniel Najar in the pub, you probably would not guess they were the co-founders of one of the UK’s fastest-growing private womenswear businesses.

Down-to-earth yet obviously passionate and ambitious, the brothers are on track for turnover of almost £20m in the year to February 2017 with their company, Chi Chi London. It was named as one of The Sunday Times Fast Track 100’s “Ones to Watch” at the end of last year as a result of its rapid growth. The brand is gearing up to push even harder this year with a new website and app, as well as an expanding product range.

Charlotte’s very feminine, likes nights in with the girls and takes time to plan what she’s wearing for nights out

Daniel Najar

Gio, the youngest of the two at 29, was an electrical engineer before Chi Chi London came to life in 2008, while brother Daniel, 32, played for Tottenham Hotspur until the age of 17 and was training to be a solicitor. They had both grown up with fashion, thanks to their father, Jamal Najar, who sold womenswear under the brand name Chi Chi through market stalls and later retail stores in north London as they were growing up.

When the recession hit in 2008, Jamal spotted an opportunity to produce private-label fashion for the high street and moved to Guangzhou in China to set up a factory. Having given up their original careers, Gio and Daniel started to sell the collections to UK multiples such as New Look and River Island, as well as other fast fashion brands. By 2011, they realised Chi Chi had greater potential.

“Given the handwriting we’ve got, we saw these high street stores selling large volumes and we decided that, with the margins, it made sense to go straight to market,” explains Daniel. “So we began working on our own collection, built a website and started to see some traction. We formed our own collection and launched the site within about four months, and quickly realised we needed a better one. Then we did some trade shows, like Pure, to get the collection out there. Dorothy Perkins was our only major stockist at that stage.”

Straight to market

Asos picked up the brand after a few seasons and the pair began working closely with the etailer to further develop a market position and who they were catering for. The focus is on feminine occasionwear that has additional interest through innovative shapes, prints, fabrics and embroidery, priced between £55 and £85 at retail.

Shot 09 080

“Daniel and I used to do everything when we first started,” explains Gio. “We were flying out to China and doing part of the basic design work, helped by people to do the CAD [computer-aided design]. Now we have an in-house design team who are amazing. But we did the early stuff ourselves.

“When we first moved in here [a 5,000 sq ft office and warehouse in Tottenham Hale, north London, which is now bursting at the seams, about three years ago] we used to do everything – the design work, generating all the orders and, on Black Friday, we’d be packing the parcels.”

“Growing up around the business with my dad when we were kids, we’ve never been afraid of getting our hands dirty,” chimes in Daniel. “We would never ask anyone to do something we wouldn’t be prepared to do ourselves or we haven’t done ourselves over the years.”

“We like to know everything and how to do it,” confirms Gio. “Then we can work out the best way of doing it from start to finish.”

The team has now grown to 38 people. Their mother runs the office, a friend looks after the warehouse and another friend manages retail, supporting a close-knit workforce. It is set to move to an 18,000 sq ft office and warehouse space in the Redburn Industrial Estate in Enfield, north London, in the next couple of months, which will give plenty of room for expansion and have capacity for 90 employees.

“It sounds cheesy but it feels like a family,” says Gio. “It’s a real democracy, and we all sit here and throw ideas around. The people who work here have really helped make this business.”

Fast track

Chi Chi London is on track to make sales of £19.9m for the year to February 2017, up from £8.1m in 2015/16, while net sales are up 215% to £13m. Profit is up 19% year on year, although the brothers decline to give figures. They forecast turnover will increase to £40m and net sales to £24m. The business makes around 64% of its sales through retail and 36% from wholesale.

Daniel explains that the main target customer is very feminine and her biggest concern is not “do I look cool?” but “do I look pretty?”: “The girl we keep in mind is called Charlotte, aged between 20 and 30. She likes TV programmes like TOWIE and Love Island, and reads magazines like Look and Cosmopolitan.

“She’s very feminine, likes nights in with the girls and takes time to plan what she’s wearing for nights out, so our core driver is always going to be occasionwear. She also loves Pandora and Disney.”

Chi Chi London has a clear product handwriting. They know who their target customer is and stay true to it

Michelle Burkholder, head of buying for women’s fast fashion at Zalando

“Charlotte” seems to be good bet. The stockist list for Chi Chi’s collections has grown from Dorothy Perkins and Asos to include Very, Simply Be and Yours Clothing, and last summer it launched concessions in eight House of Fraser stores. It is now wholesaling into three Debenhams stores, and 20 more will follow by April.

Di Frankel, head of womenswear buying at Debenhams, says the range is being rolled out because it complements the department store’s existing occasionwear offer, “adding frequent newness along with quality fabrics and great styling at very competitive price points”.

Stefanie Stott, head of international and external brands at Yours Clothing, agrees, explaining that customers love the brand for its quality, femininity and affordable prices.

Global growth

The focus last year was on growing an international profile, and Chi Chi has picked up stockists such as etailers ModCloth and Nelly.com in the US, Zalora in the Far East, The Iconic in Australia and Zalando in Europe.

Michelle Burkholder, head of buying for women’s fast fashion at Zalando, finds the company easy to work with as it is flexible and open to new ideas: “As well as the core business, we also work together on creating exclusive products for the Zalando customer.

“Chi Chi London has a clear product handwriting. They know who their target customer is and stay true to it. They offer unique, young, feminine and playful product – with strong attention to detail via embellishments and prints. We see a clear customer demand for Chi Chi London.”

We take a lot of pride in the fabrics, the details and the fit of the garment as well

Gio Najar

“It’s the attention to detail that we think is different,” says Gio. “We take a lot of pride in the fabrics, the details and the fit of the garment as well. All of our stockists have turned round to us and said the quality and fit is amazing.”

Now the firm is focusing on pushing harder in the UK, where it currently makes 70% of its own-retail sales. The new website set to launch in the next couple of months is on the Magento platform, which will allow it to roll out international websites. The firm is also looking to bring in some traditional PR in the US market.

“We’ll be doing a national TV campaign, and some video and outdoor media, which should be going live through the whole of spring/summer,” says Daniel. “There’s loads more that we can do because we’ve pushed this business on with no marketing whatsoever – the product has really driven it, along with the staff and our stockists.”

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Although he acknowledges the success of some of the rapidly growing lower-priced fast fashion brands, Daniel differentiates Chi Chi from them: “We never just wanted to be that company that just goes, ‘Here’s another LBD [little black dress],’ because there was no gap in the market for that.

“We wanted to be an affordable occasionwear brand that offered quality, not throwaway fashion. Obviously £70 is not necessarily affordable for everyone, but certainly, when you consider in the market there are some brands selling for three or four times the price for genuinely speaking the same quality, we feel like there was an opportunity there.”

Weddings are big business for Chi Chi, both for wedding guests and, increasingly, the bridal party. It has a strong bridesmaid collection and is launching a more dedicated bridal offer this year. Flower girls’ dresses could be an area for potential expansion, put forward by Gio for his two little girls.

We’ve pushed this business on with no marketing whatsoever – the product has really driven it

Gio Najar

Direct sourcing from the company’s state-of-the-art factory in Guangzhou, China – set up by Najar Snr, who still lives there – gives it definite advantages, believes Daniel: “We can drop test small stock volumes and then push big drops. We can get fresh stock within four to six weeks door to door.” The facility produces between 60,000 and 80,000 dresses a month.

He adds: “We’ve always done curve, we have petite and maternity, and tall is coming out in a few months’ time. We want to grow our casualwear and outerwear, and other categories like beauty and gifts. We could even look at things like eyelashes.

“It definitely needs to carry over our signature so the brand feels really well rounded.”

Asos is planning to launch Chi Chi’s denim collections later this season and there is also a range of bikinis in the pipeline.

“I don’t think we’ll ever be content,” Gio shrugs. “We got that from my dad, who came here from Jordan at 16, when he couldn’t speak the language. Now he speaks five languages, including Mandarin.

“We’ve got to stay ahead. We can’t stand still – this is our baby.”

 

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