It took some convincing for Claus Lindorff to launch a crowdfunding campaign. That type of financing, he knew, is generally used by start-ups that are soliciting friends and family to help the business get off the ground.
But his menswear brand, Ron Dorff, was 12 years old and had already received some 8 million euros from investors, including 4 million euro from Puma’s private equity arm in 2020.
However, things changed when he started researching Crowdcube, the U.K.’s largest crowdfunding site. Crowdcube, which was founded in 2011, has raised more than 1.4 billion pounds for more than 1,300 businesses and has more than 1.7 million members, figures that proved the viability of the crowdfunding concept.
So he decided to explore raising funds for Ron Dorff with Crowdcube and reached out to his top customers in Europe to see if they’d be interested in investing. It turns out they were.
“Puma said, ‘talk to your top clients and see if they’d invest in the brand because they love it and can become brand ambassadors,’” Lindorff explained. “So we decided to give it a go — not for the gadzillion dollars it would bring us, but as a way for them to become a part of a brand they love.”
His goal was $1.5 million, a figure he hit after 12 hours. Ultimately, he wound up raising $2 million. The minimum investment was 50 euros, or around $60, Lindorff said, but some people invested as much as 75,000 euros, or nearly $100,000. All told, 400 people participated in the crowdfunding, 70 percent from the U.K. and France and 30 percent from the rest of the world, he said. Customers in the U.S. were not allowed to participate.
Lindorff said 60 percent of the investors were members of Le Club Ron Dorff, the company’s loyalty program, but 40 percent were just interested in the brand. He said 25,000 of Le Club Ron Dorff members are in the U.S. and he’s hoping to one day open up the crowdfunding option to them as well.
Taking investments from customers is similar to having shareholders in a public company and Lindorff said there are several benefits. According to the Crowdcube site, anyone investing 50 euros will receive regular business updates. Anyone investing 150 euros or more receives 15 percent off all purchases. Those investing 6,000 euros or more get 20 percent off as well as the opportunity to propose new products and colors, for 12,500 euros or more, investors get to meet with Lindorff to “discuss brand vision and strategy,” and for the highest tier, 25,000 euros or more, they get 25 percent off purchases and an invitation to attend a Ron Dorff campaign shoot.
Lindorff said he plans to use the money to further enhance Ron Dorff’s online presence, particularly in the U.S. “We want more communication to build brand awareness,” he said. In addition, he plans to move to a larger store in Paris. Ron Dorff operates two stores in Paris, as well as units in Berlin, New York and Los Angeles.
Lindorff said the Broome Street store in New York’s SoHo is doing well and accounts for 12 percent of overall sales, “more than London,” the brand’s hometown. The West Hollywood store in L.A. is also performing and he’s still seeking a location in Miami, “but the prices are crazy,” he said. Miami is the brand’s third largest market and he said he’d like to open something there, but is willing to wait for a “correction” in the real estate market.
Ron Dorff was cofounded by Lindorff in 2012 as a men’s swimwear brand and has expanded into a number of other categories with an aesthetic that blends Swedish functionality with classic French style. Its logo is a pair of black-lacquered eyelets, a nod to the two Os in its name. According to the Crowdcube site, sales in 2023 were 8.45 million euros, up 42 percent over the past two years.
