How a family business saw its value increase by $ 130 million in 24 hours

Laybuy founder, Kiwi retail veteran Gary Rohloff, laughs at global domination, but isn’t entirely kidding.

In the three and a half years since Laybuy was sparked by an argument around the dining room table, the family business has expanded into Australia and the UK, which is listed on the Australian Stock Exchange (skyrocketing to 118 million Australian dollars or NZ $ 128 million in value in 24 hours), and just signed a deal with Manchester United.

Gary and Robyn Rohloff mortgaged everything they had to raise the money when they started the business, along with their two sons, Alex and James.

“We were sitting around the table one day and our youngest son [Alex] he was talking about how he wanted to buy a pair of jeans and wear them tonight and pay for them with his weekly paycheck, “says Rohloff.

READ MORE:
* From Table to Stock Market: Kiwi Buy-Now-Pay-Later Company, Laybuy Listed on ASX
* Are buy now and pay later platforms killing credit cards?
* Who borrows money? Baby boomers

“I mentioned to him that we actually had this idea when he was working for Ezibuy in the early 2000s, and in typical teenage fashion he said to me, well, when are you going to stop talking about it and move on?

“So I thought to suck her, you cheeky beggar, I’ll go and do that. I spent a weekend in the office here at home trying to figure out if we could make it work, and I decided we would give it a try. “

Laybuy pays the retailer on behalf of the buyer, and the buyer then pays Laybuy in six equal weekly installments without interest. The company makes money by charging merchants a fee for using the service and for late payments.

Buy now, pay later, services like Afterpay and Laybuy have seen tremendous growth, causing banks a headache, KPMG said earlier this year.

“I was running # 1 shoes and I had been watching what was happening around the world with companies like Klarna in Europe and a company called Affirm in the US And then what was happening in Tasmania, and I decided if other people could make it work, why couldn’t we in New Zealand? “says Gary.

The key to the Rohloffs’ success has been a close family and one of their first decisions.

“What we decided as a family was that if we were going to do this, we were going to go big or go home, so it would be better to make sure it was scalable and capable of being a global brand.”

They decided that everyone was going to have to do whatever it took to make it work.

“I had no idea what I was getting into, that’s probably the beauty of it all in many ways,” says Robyn, Laybuy’s global brand director.

That meant there wasn’t going to be a hierarchy, which was a big adjustment for Gary after decades in business.

“When you’re in business with your family, they don’t really care what’s on your business card, you’re just a dad and they don’t care if you’re the CEO.”

One of the secrets of Laybuy’s success is the familiar look, Alex agrees.

“We have those really honest and challenging conversations, but they lead to great progress… we can do a lot very quickly.

“It’s not always the most pleasant conversations, but at the end of the day we are family, so we can go to dinner afterwards and then move on and tomorrow will be another day.”

The company has reached its milestones, such as entering the UK market in two years and having 200 stores in New Zealand in two years; that goal was reached in two months.

Face the competition

The company’s main rivals in Australia include Zip and Afterpay, which has a market value of A $ 21.05 billion compared to Laybuy’s A $ 335.84 million.

In the UK, there are two competitors: Clearpay and Klarna.

“We’re used to having big competitors to go up against, and I think that’s what makes New Zealand companies do what they do – we’re really not afraid of the competition, you just play your own game and get into it,” Gary says .

Unlike Australia and New Zealand, the word Buy Now, Pay Later has been more difficult to spread in the UK.

Robyn, Gary, and Alex moved there in August 2018, and the first six months were difficult.

“We got there with a couple of suitcases each, we moved to a hotel for a fortnight while we found a place to live, we moved to a one-bedroom apartment and Alex was sleeping on the fold-out bed in the living room, and he said okay, good We better get some traders on board.

“When I think about it, we must have been fucking crazy to be honest, just get up and make it work right?”

The flip side of entering such a young market is the amount of potential growth.

Following an agreement with the British soccer team Manchester City, Laybuy has just signed a sponsorship agreement with Manchester United.

“He had an ambition for Laybuy to be stamped on the front of his shirt like Chevrolet,” Gary jokes.

“But it’s a dazzling price, so we decided it was probably too early in our game to go after that.”

Offering to buy now, pay later for ticketing was on the radar, but the first opportunity was with fans buying merchandise.

Covid has complicated the company’s plans to enter the United States, although it has registered an entity there and is “definitely on our radar this year,” he says.

In three years it hoped to expand to Europe, the United States, Canada, and possibly Asia as well.

“Ultimately, our dream was to create a ubiquitous global brand.

“To use an analogy with Sir Edmund Hillary, that was our Everest, and if we can do it, how good would that be as a family, as a New Zealand company? It would be a great goal to achieve.”

For his oldest son, James, the biggest challenge coming from a corporate environment was having to be so adaptable.

“I just had to come and be prepared to roll up my sleeves and do whatever it takes to get the job done.

“I was fortunate that many of the companies that I had previously worked for had that expectation of their staff, so in that sense it was not a big change, the work ethic was already there.

“I think it was more the content of that job and having to be so agile to explore whatever that challenge is, because no two days are the same.”

You have to totally believe in what you’re doing and be really honest with yourself at the same time, Gary says.

“When we decided to go down this path, it took a lot of risk, as if we could have lost everything.

“Sometimes you wake up at night in a cold sweat thinking, oh my lord, what have I done to my family, to my wife, but the determination and the bloody mentality that there is no other option, this must work. .

“In those deepest, darkest days, when you think, ‘This is too difficult,’ you have to get over it. We have had many of those days and I am sure we will have some more.

“Many New Zealanders, we are not good at celebrating our success, we just shrug and say oh yes, of course.

“I don’t think any company that has had any kind of success has come easily.”