How this former Lehman Brothers banker built a pandemic-safe business

Declan Ee always knew he wanted to run his own business.

But when he graduated from University College London in 2006, he saw his peers applying for investment banks and decided to give it a try.

His first concert? Lehman Brothers.

“I liked seeing how companies worked globally. So it was very interesting.”

But the collapse of Lehman Brothers in 2008 not only shook global markets, it also shook Ee.

“I was in the subprime mortgage department. I avoided journalists while going to Lehman in Canary Wharf. It made me leave the banking sector at some point.”

… it’s about building a good foundation and a strong business that provides value to your target customers.

Declan Ee

Co-founder, Castlery

The 39-year-old Singaporean left investment banking business in late 2016 to build his furniture start-up, Castlery.

Today, the company brings in millions, and its modern pieces can be found in over 300,000 homes globally, Castlery said. CNBC Make It finds out how.

Furniture for city-millennials

It all started when Ee came back to Singapore 11 years ago and was setting up his marital home.

His good friend and co-founder Fred Ji was also looking for modern furniture at an affordable price.

“We shared a band in it … [the process was] frustrating. We want the nice pieces, but they are so inaccessible. “

This is due to things like the price point and managing multiple delivery times for furniture, he explained.

It was then that they got the idea to sell designer furniture at affordable prices to “urban millennials” between 25 and 45 years old.

To add to the customer’s shopping experience, there is a showroom in Singapore and pop-up stores throughout the United States and Australia.

Castles

“This age group, you’re going through a lot of changes. You’re leaving school, you’re starting to build your career, you’m getting married, you’re having a child … We’re adding things to our home,” the president of Castlery told CNBC Make It.

Ee wanted to provide opportunities for young adults who want to have an “inspiring space” and “something more than Ikea,” – without breaking money.

In 2013, Ee and Ji first went digital with Castlery, allowing consumers to view a virtual studio and buy furniture online – a disruption in the traditional furniture industry.

“When customers started shopping for furniture online, they realized ‘I no longer have to go to 25 furniture stores’.” The next time they buy something, they will do it online again. “

Learning from ‘blow-ups’

Ees’ experience in investment banking, where he “saw so many explosions,” has taught him a thing or two about running his own business.

When it came to financing Castlery, Ee was determined not to go down the “venture capital route” for its startup.

“With the VC game, you want to mock your valuation every 18 months. And when we started, I knew we were going to spend time learning the business,” he said.

Since Ee had no experience in the furniture retail industry, Ee estimated that he needed six to seven years to master the ropes, which is as far as the “lifespan of the foundation” for VCs.

“Immediately there is a conflict … that’s why stress arises – you do not have clarity in mind because you have to scale at all costs.”

Instead, Castlery’s initial investments came from family members and other entrepreneurs who have left their businesses.

“At its core, it’s about building a good foundation and a strong business that provides value to your target customers. It will always translate no matter whether you want to sell or list your business,” Ee said.

Pandemic-accelerated growth

When the pandemic hit in 2020, Castlery had just begun to expand into the US market, apart from its presence in Singapore and Australia.

“I thought, wow, that’s really not the point. I was really stressed because our most profitable country was Singapore and there was the switch too.” He referred to partial lockdowns in 2020, designed to break the chain of infection.

But his stress came as a surprise when he saw an increase in e-commerce, with nationwide lockdowns that pushed customers to rely on online retailers for their consumer needs.

We grew so fast that our faces turned green.

Declan Ee

Co-founder, Castlery

And as millions of employees were shut out of their offices and forced to work from home, the “meaning of home” changed, too, Ee noted.

“It’s not just a place you come back to [after work]. You do your work, you pursue your passions, you have your children. How you decorate your home matters because you spend a lot more time there. “

As more people seek to upgrade their space, “Castlery’s growth accelerated,” Ee said.

“We grew so fast that our faces turned green.”

According to Castlery, the company grew “six times” during the pandemic, earning over $ 100 million in the most recent fiscal year ending March 2022 and becoming profitable in 2020.

Castlery caters to city-millennials who want an “inspirational space” without breaking the bank, said its co-founder Declan Ee.

Castles

But with or without the pandemic, Ee believes Castlery’s biggest selling point is the design and functionality of its products.

“I talk to customers from the United States every month and they say, ‘We love your washable selection of sofas!’ I thought, ‘Okay, is that one thing?’ “

“I suppose we are Asians and we are pretty practical,” he said.

Ee added: “They would explain that in the United States you will not have this option at this price point.” According to him, his furniture is “20% to 30%” cheaper than similar pieces on the market.

Each collection is assigned to a buyer, an engineer and a planner – this trio runs a well-oiled machine to ensure that products enter the market on time and cost-effectively.

It is achieved through a “rigorous process that has been refined over the years,” Ee said.

“Each collection is assigned to a buyer, an engineer and a planner – this trio runs a well-oiled machine to ensure that products enter the market in a timely and cost-effective manner.”

He added: “[The] Buyer finds the best manufacturers in the class to work with. Engineers redesign inefficient processes while a planner works to find materials at the best possible price. “

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