Learning the hard way: I Love Ugly’s journey from the top to the bottom and back again

^{I Love Ugly CEO: Valentin Ozich}

Any founder will tell you starting and growing a business is difficult – nothing great ever came easily. When it comes to challenges, it’s fair to say that I Love Ugly has had its resilience tested a little more than most.

The brand began life as a project by artist Valentin Ozich, who started making shirts in his home. When the clothing gathered some interest, he expanded it into a men’s streetwear brand. I Love Ugly’s growth was the stuff dreams are made of – expanding rapidly from zero to a business worth $10 million dollars, with stores in Los Angeles and Melbourne. In 2014, it placed on the Fast 50 with a remarkable growth percentage of 1087%.

Then, as Valentin Ozich says, ‘we nearly lost it all overnight’. Over the next year, financial troubles significantly impacted the brand. I Love Ugly had grown beyond its means and things looked dark. ‘We didn’t have any big experience growing this big, this quickly, and didn’t know all the icebergs ahead. The business just didn’t have that experienced governance to tell us to slow down.’

To add to the company’s challenges, an online advertising campaign I Love Ugly ran in 2015 caused controversy online for sexualising its female models. The brand’s reputation was significantly affected, and it was one of many crucial learning experiences for Ozich: ‘I wasn’t proud of that – it was representative of my inexperience and how naive I was. But it taught me a lot of lessons that have helped carve out and mould the man I am today.’

In response to these difficulties, the company underwent a restructure in 2017, while Ozich had to sell his house to pay down some of the business debt. He cut down distribution and reduced the number of stores, turning instead to focus on customer retention and reforming the business model around stock.

Ozich also worked to surround himself with a strong team. He partnered with Nick Edwards, who with his background in commercial retail working with Hallensteins and City Beach in Australia, added some much-needed structure to the business. They went on to hire people who were more expensive but who would be able to support the company to grow again. This was another crucial lesson – as Ozich says, ‘my old self used to be focused on vanity metrics, like how many Facebook followers we had or our staff numbers. This time around, we focused on being efficient first.’

Gradually, I Love Ugly started to find its stride again. Sales started to pick up, revenue grew, and the company now has a new store in Auckland’s Commercial Bay. As Ozich describes, ‘in the last 12 months, we’ve switched from being in defence mode to offence mode, where we now feel ready to do more than keep customers - we’re ready to seek more customers.’

Starting a business is never easy, but Ozich has taken a lot from his experience so far. When asked what advice he would have for his younger self, he says, ‘just be patient. Don’t spend so much energy looking around at what the competition is doing, because it’s exhausting.’

He’s rightfully proud of the company’s survival and says, ‘the fact we’re still alive and thriving after 12 years is phenomenal.’ He advises business owners, ‘when you have a great month, write down why you had a great month. And when you have a tough month, write down why it was tough. It’s usually not the market to blame, but it’s the decisions you made six months ago.’

I Love Ugly’s future is looking bright with the company still seeing growth during 2020 despite challenging conditions. Clearly Ozich’s new approach to doing business is serving the brand well. According to Ozich, ‘sticking to our guns, being patient and committing to our customer – all of these have made us thrive.’

I Love Ugly ranked 5th in the 2014 Deloitte Fast 50.