GREGOR LAWSON and Fraser Smeaton were sportsmen first, businessmen second. The pair met in 1997 at Edinburgh University where they shared a passion for rugby and — thanks to rugby club parties — extreme fancy dress.
Most people grow out of wearing outrageous clothing at wild parties when they graduate and get on the career ladder, but more than a decade later, they encountered a fellow partygoer clad in a body stocking that covered even his face. He was the centre of attention — and gave them the inspiration for their business, AFG Media.
It sells Morphsuits — so named because they allow the wearer to morph into a more fun, outgoing version of themselves. Turnover is expected to top £11m this year and the Edinburgh company has 21 staff in five sites around the world.
Smeaton and Lawson met the eyecatching reveller while partying in Dublin in 2008. “This guy came in a funky allin-one he had picked up online,” said Lawson. “When he went out he was like a celebrity, surrounded by cameras. He had a great night. We had never seen a response to a product like that.”
They and Smeaton’s younger brother, Ali, invested £1,000 each and tried prototypes in different materials before ordering the winning formula in a range of bold primary colours. “We spent a lot of time working on the suits to ensure that you can see out of them, but that nobody could see in, and that they keep their shape,” said Lawson.
Success came swiftly, with turnover of £1.2m in the first year. Last year, the figure was £3.3m. They self-funded the business, apart from a £600,000 loan last year to cover cashflow during a busy production run.
This summer, the Business Growth Fund, backed by the country’s big banks, invested £4.2m for an 18% stake. The fund is also providing expertise, in the shape of Ralph Kugler, the new chairman. He has an international contacts book thanks to board positions with companies such as Unilever.
The investment will largely be used to expand distribution around the world and pay for licensing agreements. They have permission for Power Rangers Morphsuits and are hoping to secure Spider-Man. “Getting licences is a big challenge; it’s a time-consuming and fairly costly process. It’s going to be fundamental to the business’s future success,” said Lawson, 33.
He graduated with a degree in business studies in 2001, and then secured a place on Procter & Gamble’s graduate programme, marketing products such as Pantene shampoo. Fraser, also 33, gained an engineering degree but worked in marketing for BT’s broadband service. Ali, 31, also did business studies and worked for Barclays.
AFG Media started as a part-time internet operation, run from Fraser’s cramped flat in Edinburgh. The website went live on his 30th birthday in May 2009, with 200 suits to sell. Little more than a year later, the three young Scottish entrepreneurs took the plunge — quitting their full-time jobs to devote themselves to Morphsuits. Supportive families made the decision easier.
“My dad had the right mix of being a sportsman and a businessman,” said Lawson. Alan Lawson was a Scotland international rugby player and is now president of the Scottish Rugby Union. Off the field, he rose to managing director of Forbo Nairn, the flooring company, and chief executive of Stoddard, the dental instruments maker.
The Smeaton brothers also had a businessman father: Kent Smeaton was a director of New Holland, the tractor and farm equipment manufacturer.
Social media played a big part in raising the profile of the firm. Morphsuits has more than 1m fans on Facebook and 10,000 on Twitter. “Facebook was incredibly important; the key thing is it is free,” said Lawson.
In March 2011, the trio were approached by Party City, an American chain of fancy dress stores. It is now one of the main distributors of Morphsuits.
AFG is preparing for Hallowe’en, its busiest time of year. Morphsuits come in designs such as skeletons and witches, as well as national flags and even designs that glow in the dark. The suits are made in Shanghai and most cost £35 to £40. The range has been extended with the Morphmask, which covers just the head, and the Megamorph, an inflatable sumo-esque version.
The customers are mainly men aged 16 to 24, who seem to have no qualms about showing off their curves in the skin-tight suits. “There’s a peacocking element,” said Lawson. “You get more attention and therefore have more fun by wearing the suit.”
AFG Media last year diversified with a menswear brand, called Foul Fashion. The deliberately mismatched outfits are made from old clothes and fabric scraps.
The tradition of bad taste continues proudly with Royal & Awesome, which sells golfing gear, including zebra-print trousers. Inquiries have already come from distributors in Canada, Korea and Australia.
Fraser’s advice for entrepreneurs is to test an idea as quickly and cheaply as possible. “Get into a business with someone else,” adds Lawson, who with his two friends and partners, is the majority shareholder. “It’s been key for us. You split the risk.”