By G. Sharmila
When three high school friends got together to start their own brand of locally themed casual wear, little did they know what being entrepreneurs and running a business really entailed. One of them, Hugh Koh, shares his tale of starting their label Pestle & Mortar.
________________________________________________________________________
Few people know that homegrown casual wear label Pestle & Mortar, which clocked in RM4 million in revenue last year, was actually started by three high school friends and that all three knew nothing about the fashion business at the start of their entrepreneurial journey.
“Pestle & Mortar was started by me and two good friends, two brothers actually – Arnold and Arthur Loh (now head of production) in 2010. All of us actually had our own day jobs at the time, we started this as a hobby,” creative director and co-founder Hugh Koh told KINIBIZ in a recent interview.
Why clothing? “It was something that we were very passionate about. Growing up, we were really into subcultures such as skateboarding, music, art, graffiti. And part and parcel of these subcultures was the clothing. And we used to look up to other people who were doing the same thing. And we realised what they were doing was awesome and this was something we wanted to get into and do. So, it started off as a hobby and fortunately we built (it) into a business,” he explained.
Hugh Koh
But neither of the three friends had a background in fashion. “I graduated in architecture, Arnold and Arthur Loh are mass communication graduates. So we started the label and really didn’t think much of it but fortunately, we managed to gain a little bit of traction.
“We realised that 2010 was a great time, a lot of people were a lot more ‘gung ho’ when it came to local brands, I think also at that point of time they wanted something different in the market, compared to the usual American, European brands,” Koh recalled.
Although the three business partners did “decently” at the time, Koh admitted they lacked the business structure and financial acumen to take their venture to the next level. Then his brother Mark Koh, who was running his own startup at the time, offered to help out.
“He came on board in 2012 as head of strategy and finance and we started seeing a lot of significant changes in the company,” Koh explained. This was how Pestle & Mortar’s holding company Pencil Produce Sdn Bhd developed a proper structure.
Another friend Eddie Samad also came along around the same time, who is now head of operations. “And he is a really good friend of ours, he’d been following the progress of the business since we started so he really knew the business inside out because he used to be free labour during bazaars and all our events. He was from an IT background and we brought him in to handle operations as he was good with supply chain and standard operating procedures,” Koh said.
Today, Pencil Produce is run by five partners, namely Koh, his brother Mark Koh, Arnold Loh, Arthur Loh and Eddie.
“I handled everything creative, Arthur Loh was more of a photographer and copywriter. He was still maintaining his job at 8TV at the time, so he was leveraging off his contacts to do PR for us. And then what happened was, we opened our first store in Subang and then in Bangsar,” Koh said of the Pestle & Mortar label.
Why did they choose a name one would normally associate with the food and beverage industry for a clothing label? According to Koh, the pestle and mortar can be found in every Asian household and since all three founders are Asian, it made sense.
“Also the three of us came from very different backgrounds to start the business. A pestle and mortar usually pounds different ingredients into a single thing and symbolises three very different people ‘merging’ to start the business,” Koh explained.
Commenting on the early challenges they faced with the business, Koh admitted that manufacturing was a big challenge at first, as none of them were from the fashion business.
“But we were actually very fortunate in the sense that we had a lot of people who recommended us to manufacturers or point us in the right direction. The rest was trial and error, and we made a lot of mistakes along the way, which were crucial, because they led us to where we are today,” he said.
What mistakes did he make and learned from? “Off the top of my head, it was from the manufacturing side. On one occasion, we were talking to this manufacturer who promised the world to us, he was saying: ‘yeah, it can be done’ and when the stock arrived, it was nothing like what we expected it to be.
“The colours were off and while it wasn’t that bad, the pressure he used when he screen printed the t-shirts affected the colours. Therefore every piece came out different, in terms of hues and tones. So we wondered how we were going to sell them. But then we thought: Why not market it from the angle that every piece is different and unique? And so we managed to overcome the problem,” Koh explained.
Timing was also something that they had to learn. “Currently, we produce all our clothes and we plan six months ahead and that’s pretty much how all very established brands do it. At present, we’re done with planning for the Spring/Summer 2016 collection and are starting production in spring.
“But when we first started, we had a lot of trouble meeting deadlines, which was both ours and the manufacturer’s faults. But that has taught us to really ensure that deadlines are met and that marketing materials need to come out early so we can do a really good job of it,” Koh said.
“Another thing was that Pestle & Mortar for us was something entirely new. Mark Koh has managed to really bring in business development, speaking to investors, if we come to a roadblock, he will put us in touch with people who can help us and that has played an integral part of the business. Yeah, no doubt, a lot of it was hard work from us, but we have had a lot of help,” Koh acknowledged.
He recalled that when they first started Pestle & Mortar, one day they were at the mamak stall and asked themselves: “What is going to set us apart from all the other hundreds of thousands of clothing labels out there?
“And that very night we said, we want to design something that tells a story of who we are. Because all of us are Asian boys who grew up in Malaysia, so this is a story of what we want to tell. So when started out producing our clothes, we wanted them to be conversation pieces,” he said.
“When we started our first collection it was called ‘KL Through Our Eyes’, and we depicted the KL lifestyle on our t-shirts. For instance, the mamak culture is a big part of KL life and part of that is a picture of the telur mata kerbau (bull’s eye egg) on Indo mee on the iconic orange plate. That gained people’s attention and we got a lot of media coverage and that really helped promote us,” he added.
How did they overcome the perception that foreign brands are better? “I think for us, we care a lot about the process. When people buy our clothes, it’s not just apparel, they’re buying into a lifestyle.
“Part of our business is actually to interact with customers and also to host events. For example, we run Smashing Weekend, which started in the first year of the business. It started off with just 20 people, comprising friends and friends of friends.
“The last party that we had in July in conjunction with our fifth year anniversary, attracted more than 1,300 people. A lot of times it is difficult to speak to everybody and we try to speak to as many groups as we can to get feedback,” he explained.
According to Koh, many people think that coming up with a clothing label is really simple “and that ideas are generated just like that”. “We used to do a lot of videos, interviews of the staff to share where our inspiration comes from. It’s something very different from the US brands. We wanted to pave the way for other local brands,” he said.
He shared that office culture is extremely important to the founders. “We try to do a lot of things together, not only at work but outside of work as well. So everyone is passionate about the brand and this really helps in marketing the brand as well.
“No doubt we’ve had qualms and even among the partners, that’s a monthly affair. But we are all good friends, we speak up and get over the problem and move on from there,” he explained.
How did they get funding when they started out? “When we started out, we did a very small production (of clothing) so the money came out of our own pockets. We started with RM20,000 which lasted us two collections.
“But once Mark Koh came in, he said if we wanted to go a step further, we were going to need money. Fortunately, we all approached our families and they were very supportive, we raised around RM100,000 from all our families and from there we opened the flagship store in Bangsar. We did the fitouts for the store ourselves, we are all very hands-on people, we pretty much put it together which helped bring us closer together,” Koh recalled.
After that the company received Series A funding, after Mark Koh linked them up with investors. “One of the investor’s nephews was wearing our clothing and raving about the brand, which piqued his uncle’s interest. This investor came on board and some of Mark’s friends as well who also believed in us and came on board,” said Koh. (For the uninitiated, Series A financing is the first round of funding a new business receives after seed capital.)
The investors came in early last year and since then the business has been growing rapidly, Koh said. “Now that we are really trying to expand the business and grow the e-commerce arm of it, we needed to raise more funding. We just closed a round of funding with some angel investors, this time around though we looked for strategic partners rather than just investors,” he explained.
Koh shared that to date, the company has raised around RM3 million from investors. “The economy in Malaysia has not been great, people in retail have been saying ‘if you think this year is bad, wait for the next few years’. But at the same time, we’ve been lucky to close this round of funding, a lot of people believe in us and it’s good stress for us as well.
“We had a good track record with the last investors, so when the new investors came in, it was on the recommendations from the previous investors. Apart from getting returns from investment, they wanted to be involved in something Malaysian,” Koh said.
Tomorrow: Pencil Produce dreams beyond the brand
You must be logged in to post a comment.