CASE STUDY: Hiut Jeans

How a Welsh jeans firm became a cult global brand

When most people think about the global fashion industry it is safe to say that a sleepy town in far west Wales does not immediately spring to mind. Yet Cardigan, on Wales' Irish Sea coast, has for the past five years been home to a high-end jeans-maker - the Hiut Denim Company. Beloved by a growing number of fashionistas from New York to Paris, and London to Melbourne, Hiut ships its expensive jeans around the world.

As orders arrive via its website, Hiut's workforce of just 15 people gets to work hand-cutting and sewing the trousers from giant rolls of indigo-coloured denim that the company imports from Turkey and Japan. Despite only making around 120 pairs of jeans a week, founder and owner David Hieatt has big ambitions to expand.

While it may seem a little incongruous that a posh jeans business is based in west Wales, Cardigan (population 4,000) actually has a long history of jeans-making. For almost 40 years the town was home to a factory that made 35,000 pairs of jeans each week for UK retailer Marks & Spencer. But in 2002 the facility closed with the loss of 400 jobs when production was moved to Morocco to cut costs. Fast forward 10 years, and when Mr Hieatt - a proud Welshman - was looking to open a factory to start making jeans, he chose Cardigan. The company name is a combination of the first two letters of Mr Hieatt's surname and the word "utility".

Thats why we have started The Hiut Denim Company. To bring manufacturing back home. To use all that skill on our doorstep. And to breathe new life into our town.

"Where better to locate ourselves than in a town with a history of jeans-making, where the expertise remains?" he says.

Employing machinists who had previously worked in the old factory and not lost their years of jeans-making skills, Mr Hieatt says he was confident that Hiut could be successful if it concentrated on selling directly to consumers around the world via its website.

"Without the internet we'd have been dead within 12 weeks," he says. "But the internet has changed only everything. The internet allows us to sell direct and keep the [profit] margin... it enables us to compete."

"Where better to locate ourselves than in a town with a history of jeans-making, where the expertise remains?" he says.

In running Hiut Mr Hieatt and his co-owner, wife Clare, have benefited from their experience of previously owning a clothing firm called Howies, which they sold to US firm Timberland for 3.2m in 2011. But what has also been invaluable is Mr Hieatt's previous career working in advertising, this has enabled him to very effectively market and promote Hiut, from its snazzy website, to its extensive use of social media; both adverts in people's Facebook feeds and arty photos of people wearing its jeans.

"The interesting thing about social media for me is that up until Facebook, Instagram, Twitter and SnapChat you had to have a huge budget in order to tell your story," he says.

"In effect you were locked out of telling that story because the costs [of advertising and wider marketing] were too high. But social media has actually allowed the smaller maker [small firms that manufacture things] to go and tell his story.

Mr Hieatt also sends out free jeans to what he calls "influencers", either fashion bloggers or famous people, in the hope that they will write or talk positively about the brand.

Successful examples of this have been an increase in orders from Denmark after Hiut sent a pair of its jeans to celebrated Danish chef Rene Redzepi. Megan Markle wore a pair of Hiut jeans on a visit to Wales, and sales increased.

As Hiut continues to win overseas orders for its jeans costing up to 230 ($300) a pair, Mr Hieatt admits that one negative issue the company has to deal with is a return rate of "about 14%" - people sending them back because they don't fit. To counter this problem Hiut is exploring using technology that can accurately tell from a photo a person's perfect jeans size.

The Grand Masters of Denim

"In our town, there are people who have spent 20,000 hours, 30,000 hours, and in some cases, 40,000 hours making jeans. Their hands and eyes have been trained in the essence of making great jeans. They are the Grand Masters of denim."

For those that dont know, whats the basis behind Hiut Denim and how did it originate?

"I believe in quality. I believe in skill. I believe in ideas. And I believe in my town. And through an odd set of circumstances and timing I was able to bring all those things together by starting Hiut Denim Co."

"So here we are right now with our own factory, making our own brand of premium mens jeans in the UK, and owned by no one. And with an idea that has never been done before."

"We will be the first jean in the world to come with a historytag. Think of it as a way of attaching the memories you had in them to your jean via a website. It will let you see your jeans being made and, if you chose to, you can upload photos of where you went in them and what you did in them. Its like an iPod for memories via the historytag.com website."

"It means one day when they get handed down or end up in a second hand shop, their stories will go with them too. The historytag will become a badge of honour for those who want to make products that last. We want to make great products that last. And the more we can make a product that lasts, the more stories it will have to tell. As humans, we have a deep-rooted desire to know the history of things. And objects have stories to tell. With the historytag it will be able to start to tell those stories."

What would you say is different about your approach this time around and what lessons have you learnt from owning a clothing brand before?

"Our approach is to do one thing well. Like crazy good. We will make jeans. Thats it. Nothing else. No distractions. Nothing else to steal our focus. No kidding ourselves that we can be good at everything. No trying to conquer the world. Were happy to conquer our tiny small bit of it."

"I think the great companies are defined by the things that they say no to. And not just what they say yes to. With time being the most precious resource of all, we have to decide what we can do well. And what we cant do well. We believe we can make a great pair of jeans. That in itself is a huge undertaking."

"The other key learning is to work with people who are great at what they do. Build a great team. Trust them. Allow them enough slack to let them shine. I want to create a culture that people can do their best work."

Hieatt has spent the morning with an architect who is adapting the old denim factory for Hiut to move back in in June, so they can grow the company fast enough to keep up with demand. Hes brought on two more jeans-makers - called grandmasters for their many years of experience - but Hiut cant hire any more or install their new equipment until it has more space. Thanks to the internet, the Hiut story can travel the world. While the old factory wanted to make jeans as cheaply as possible, Hiut wants to sell jeans that are the best quality. The company imports salvaged denim from Japan and organic materials from Turkey. It is also looking at a lower impact product using less water and electricity, from a nature reserve in Italy.

1 Where are the most likely places to concentrate market development?

2-

Are the owners of Hiut showing strategic commitment, are they strategic

opportunists or strategically adaptable?

3-What innovation do Hiut use?

4-According to our text book (Aaker & McLoughlin) methods for increasing product usage include motivating heavy users to use more, making the use easier, providing incentives, remove or reduce reasons not to buy, provide reminder communications, reduce undesirable consequences of frequent use, and finding new uses.

5-Brand extension evaluation asks three questions according to the book. Which of the following is not a brand extension question among the three?

6-According to our text book (Aaker & McLoughlin), among the ways for the CMO to get the CEO on board with respect to silos is to make the silo problems visible, align the role of marketing with growth objectives, and get easy and visible wins.

7-In his classic article Marketing Myopia, Theodore Levitt explained how firms that

define their business myopically in product terms can stagnate, even though the basic

customer need they serve is enjoying healthy growth.

To steer away from marketing myopia the concept is simple. Define the business in terms of the basic customer need rather than the product.

Which of the following pairs is the correct narrow and broad scope specification?

8-Who are their direct competitors?