After founding RY in 2005 and selling it to The Hut Group in 2017, James Patten and Brad Carr have bought the online beauty retailer back in a surprising reacquisition. Patten was sailing around Europe with his family on his yacht when he woke up one morning to a string of texts from industry contacts asking, “Have you heard the news that The Hut Group is pulling out of Australia?” “To be honest, I was a little bit surprised – from the outside, it looked like it was tracking along quite
quite nicely, but I hadn’t paid that much attention to it, since we sold it,” Patten told Inside Retail.
“I think the existing staff that worked for The Hut Group were a bit surprised, especially with the attempted purchase of Adore [Beauty] not that long ago,” he added.
It wasn’t long after Patten heard the news and began wondering about the true state of the business that he reached out to The Hut Group and spoke to his RY co-founder Carr about putting it back together.
“We came to a decision really quickly, even though we didn’t know exactly what we were buying,” Patten stated.
Not being blinded by hindsight
Patten admitted that the decision to buy back RY was more driven by his emotional connection with the business than by a purely financial consideration.
“We started that business from scratch 20 years ago, and built it from the back of our hair salon into one of Australia’s biggest online [beauty] stores,” Patten said.
“There was definitely a part of me that said, ‘I don’t want to see that brand exit Australia’,” he continued.
After enthusiastic conversations with suppliers and old team members about bringing RY back to Australia, Patten’s decision to steer a comeback was set.
“Hindsight is a beautiful thing. At the time, starting the business from scratch and getting an offer from a big company from overseas – the picture that was painted of the fast exit – I thought it was amazing,” Patten admitted.
“Eight years on, looking at the way beauty has expanded online, and online has expanded, maybe it would have been different if we had stayed on and continued, because we were growing really fast at that point.”.
However, Patten doesn’t regret his journey with RY over the last two decades. Now the co-founders are focused on building the next chapter of RY in a retail landscape that has shifted dramatically since its initial sale in 2017.
RY is recreating itself
According to Patten, the biggest change since selling the business is that the brand’s RY stocks have become more digitally sophisticated as the sales channels have narrowed.
“They’re more about the long-term goal and the strategy of how to sell online, whereas I think back in the day they were just relying on the online retailers to set that strategy for them,” Patten shared.
“Now they’re bringing in their own digital team, and they know exactly what they want for their own brand”.
The co-founders are clear on RY’s point of difference from competitors, such as Adore Beauty, Mecca and Sephora.
“Our customer service team [members] are trained skin therapists and trained beauty therapists, so we still give professional advice around the products that we sell,” Patten said.
He believes this will resonate with customers who are educated across haircare and skincare and are seeking efficacious products.
“I still think there’s a huge opportunity for professionally driven advice… and a huge demand for those active, expert products,” Patten noted.
Prior to selling to The Hut Group, RY had three stores in the Gold Coast – two stores under the RY banner, and one that had been purchased and was in the process of being rebranded. After The Hut Group acquired RY, two of the three stores were closed.
“I know the retailer likes to think that they choose what’s happening, but it’s the customer that ultimately defines how they want to shop,” Patten stated.
“For a long time, it was said that the internet is going to kill retail, or it’s going to kill the high street, and I think that’s been proven to be not true,” he continued.
The relaunch of RY will see the opening of a new treatment-led retail store in Queensland.