Can you tell us a little bit about yourself and your career so far?
I’m Alex Hoye, Co-Founder and CEO of Faction Skis, the world’s fastest-growing independent global ski brand. I have an entrepreneurial background as a founder, executive, NED and investor, matching global institutional experience with start-up dynamism. Prior to co-founding Faction Skis, I took my first start-up venture GoIndustry plc to AIM in 2006 and survived the dot-com bust through the creation of an 18-country online industrial action business that ensured it rose to a $100m in valuation.
The process included 9 M&A transactions as we rolled up online and offline businesses around the world and industry-leading technology development and deployment. I also have experience from working at a NASDAQ listed company and being the CEO of a PE-backed digital marketing agency turnaround, which I made profitable with increased sales. At McKinsey & Co. I worked with clients across global supply chains and digital, and at Disney, I was responsible for the strategic planning processes.
I am American, attended Stanford University and Harvard Business School, and have worked and lived in the US, Latin America, Germany, Switzerland, and the UK, where I’m now based with my family.
What did you seek to achieve when you founded Faction?
Tony McWilliam and I founded Faction in 2006 as we wanted to build a brand with a focus on creating better products, respecting and getting more involved with the people who would buy our product, skis. We had identified an established market that was set for disruption and wanted to take advantage of that.
The skiing industry is dominated by companies whose founders innovated everything from aluminium laminates to steel edges in the 1940s and 1950s but are today slow-moving corporates that have grown out of touch with their consumers. Like Detroit in the 1990s, the mentality is focused more on keeping their production volumes up than innovation and margin. This also occurred as media, communication, and retail channels have been revolutionized by digital media, leaving an opportunity in the $7bn snow sports market for an innovation-led, internet-speed-driven global business.
How did the business develop and where are you looking to expand?
We were lucky really with The Faction Collective. Within a decade of our launch, retail channels were collapsing and buyers are now holding brands accountable to quality and being real, not just consumer machines. Our world-class team and investors have built a global platform, the best in the industry, and showcasing the best people on skis in our creative on media with humbling response from Tirol to Tokyo.
I fully committed to Faction in 2012 and we’ve since seen the ski unit sales grow from 2,600 pairs to 30,000 pairs for the 2018-2019 season, making Faction the fastest-growing independent global ski brand every year since then. The drivers of this growth were a combination of product innovation, modern marketing and messaging, managed and global sales operations and a professional management team – all implementations inspired by my previous experience from within the entrepreneurial industry.
The five-year plan has Faction’s sales quadrupling for season 2022-23 but still focusing on only 2.5% of the market. These forecasts do not take the significant opportunities in China into account, but we’re thrilled by our expansion into outerwear for the 2018-9 season – FW: Gear for Alpine Living and will continue to explore exciting collaborations with creative artists that inspire us and match our brand values.
Who would you say is your target audience?
Firstly, we want to inspire people to out there into nature and enjoy it. We also want people to engage with what we are making for them, to be excited, curious, and hopefully, impressed. My belief in this world of Amazon Prime and online grocery shopping is that the basics are really good. Happily, that leaves some headspace to really enjoy some of the things that excite us. If that’s the mountains, if that’s new material science, or if that’s amazing designs to make you laugh, we’re here for you. And it’s good to know that we’re truly at the forefront of R&D in the industry, so we’re aiming to help your performance to be the best it can be.
How do you experience the current market conditions?
The Chinese ski industry has been expanding rapidly, making it the biggest growth driver for the ski industry globally. Faction is already established as an aspirational brand in the Chinese market, the first AFP-sanctioned (Association of Freeskiing Professionals) freeski competition in China was co-sponsored by Faction and won by Faction Olympian Alex Hall. The Chinese skiing boom has already fuelled the construction of more than 700 domestic indoor and outdoor ski resorts, and in the lead-up to the 2022 Beijing Winter Olympics, President Xi Jinping has stated his intention of 20% growth in skiers each year reaching over 100 million by the Games, and 300 million skiers by 2030.
In a multi-billion euro market with 50% year-to-date sales growth, what is different about Faction?
People’s focus on quality, story and experience are defining the retail and media landscape, meaning that today you have to deliver price-point basics very well or differentiated premium quality with meaning. Hence we’re capitalising on the gap left by generalist retailers and multi-brand conglomerates.
The digital and social media revolution has also enabled us to reach millions of fans directly and we have an unprecedented opportunity to change the brand landscape with premium, innovative brands. Likewise, we don’t rely on traditional advertising but stand out by being creating and publishing our own content of original films and social media. I guess that’s what’s most different about Faction.
Faction also boasts a leading film media production company, how did that happen?
To be completely honest, this has roots in necessity as much as strategy. At the beginning of our journey, we couldn’t afford to buy a slot with the big ski film production companies, so we turned to new technology like drones and rider-held steady cams and made up for what we lacked in budget with creativity.
With a down-to-earth approach and bolstered by some of the best skiers in the world, I believe we generated a change and an irresistible movement that e.g. led us to partner with Candide Thovex as a shareholder, athlete and director. Known as the G.O.A.T. – Greatest of All Time, Candide’s creative productions have generated over 100 m views with One of Those Days and Ski the World, and an audience of 1.5m Facebook & Instagram followers. His seven Cannes Lion Awards also truly demonstrate his immense marketing talent as well as his cat-like skiing grace.
With Candid on board, last season saw the release of our first full-length feature film ‘This Is Home’, which we celebrated and launched on a 300-stop film tour spanning across 32 countries. And it was a great success – It received an additional 1m digital views!
This season we’re launching a three-part ‘The Faction Collective Presents’ series including ‘La Grave’ featuring Sam Anthamatten and Johnny Collinson, with the following part already in production for an autumn 2019 cinema launch.
What are the next steps for Faction?
We’ve had a successful end-of-year investment round and with 400+ shareholders now on board, we’re nearing key thresholds of €10m in revenues, accelerating growth and considering selective acquisitions, which could benefit from Faction’s global sales and media reach. However, having already invested in a strong foundation, our focus is switching towards profit margins, with the management team driving to a goal of secondary rise by 2021 and an aim to be retail investment ready by 2022.
We have a unique shareholder story, with Octopus Ventures having invested and supporting the brand’s growth since 2012, but the majority of the backing has come from the over €10m invested by angel investors. Being an angel investor myself and with Faction’s DNA stable on doing things better and differently, we\’ve committed to enabling skiers and angels who back the company to benefit from shareholder value appreciation from the very beginning and into the future. In 2019 we will also open investment up to a broader base by offering further investment on Crowdcube.
Thank you for your time, Alex.
Find out more here: uk.factionskis.com