nto my apartment in 2020, I was going through the process of styling my home, and for me, it was very much about, ‘What brands am I going to start to integrate into my home? Where do I go?’ With furniture, it’s a pretty straightforward customer journey. Things like couches and dining tables, you’re going to go to a store, you’re going to touch and feel it, but for soft furnishings, and more specifically cushions, there wasn’t a go-to brand.  After talking to potential customers to see if there was a market, the response I got was that there absolutely was. That was around May 2020, and then it was all about researching and understanding if I could create a business out of cushions. I was passionate about solving the problem of filling a gap in the market.  Prior to Hommey, I was in private equity for about a year, so my mindset was very much about how to scale a business quickly. And within three months of August, which is when we got family office funding, we managed to import all these fabrics from around the world into Australia and create a range of 160 SKUs.  We literally had two or three units behind every SKU, but it was just about positioning ourselves as a big brand that was a destination for Millennials – because we wanted to create a cushion brand that was all about premium quality and amazing design, but still at an affordable price point. Our first month of actual trade was January 2021, and we sold about 1,000 cushions in the first three months, so we were validated by the market pretty quickly. Hommey founder Justin Kestelman. Supplied IR: Do you think the timing of the launch helped? People were stuck at home in many parts of Australia, and there was a lot of reporting on the rise of the cocooning trend. JK: Home was such an important part of our mental health. I think we all took a serious approach to making home a sanctuary. Being a brand that was talking about elevated comfort, and tapping into the psychological element of that, bolstered our messaging and got us so much cut-through so quickly. I think that’s why we had such a huge uptake early on, because people were in that frame of mind. It was a clear market, and that was definitely part of the investment thesis early in the model. If we were going to launch a cushion brand, our number one issue was, how do we get this to market as quickly as possible to capitalise on building a brand at a time when we can get this level of cut-through? IR: Have you seen a drop off in demand for homewares since lockdowns have lifted and stores have reopened? JK: We saw great growth from January through to May 2021. That was one of the first times we came out of lockdown, in 2021, and it was insane to see the change in consumer behaviour. We’d been anticipating a change, but we didn’t expect it to drop that much. The second we left lockdown, it was all about entertainment, travel and food. No one wanted to think about the home, because that’s where we’d just spent the last three years. That was the first time when I thought, ‘This is a big problem. How are we going to continue to survive as a cushion brand when we get back to normal society? How do we stay relevant?’ That’s when my mind went straight to thinking about how we keep pivoting. IR: I know that you’ve expanded into different products over the past two years – was that why?  JK: It was very much around that. As a cushion brand, being online is quite challenging. And if we want to continue to grow and become a household name, we have to be more than just cushions, because we have to be able to deal with seasonality and relevance. The other issue we saw was that when customers come to purchase from us, they buy one cushion to try, and then they come back and fit out the rest of their home. But after that, there aren’t a lot of reasons for them to come back. It’s not like you’re changing your cushions every quarter, or every half. It became evident that the repeat purchase was going to be quite low, and acquiring customers in this day and age is so hard. So, we had to reinvent ourselves pretty quickly.  It’s certainly not what I thought [I’d be doing] after being in the market for seven months, but you have to be nimble. Hommey now is all about where lifestyle meets comfort. Our north star is developing products you can enjoy in and out of your home. It’s not just about interiors, it’s about evoking a feeling and emotion.  IR: Can you tell me about some of the new products you’ve launched? JK: We started with a collaboration with Alias Mae – that was in October 2021. The founder is my fiancée’s best friend’s boyfriend. The four of us went out to dinner, and he was telling me about his brand, and I was telling him about my brand, and we dreamed up this idea of using our best-selling material and his best-selling sole, and creating a really cool slide that people can wear in and out of home. That was our first real step towards a successful pivot out of cushions. We then moved into towelling products in February 2022, followed by throws in May, and robes in July. And then we started getting into beach pillows and other homewares in October. So it hasn’t been long, but we’ve been expanding into these different categories.  IR: In terms of your overarching vision, are there a lot more new products to come? JK: Yes, we’re really focused on product development right now, and I think that’s why we’ve managed to continue to grow so quickly in the last 12 months – identifying that problem of the repeat purchase, identifying the fact that cushions are a good stable business, but not a scalable business, and introducing these new products.  In terms of the big critical success factors, robes have been unbelievable for us – along with Alias Mae. The uptake has been massive. Our strategy is, we’ve got a brand, we’ve got an audience, how do we keep taking people on that journey? So, we’ve just introduced an entirely new collection of throws and an entirely new collection of slides that we developed with Hush Puppies. Going into the middle of the year, we’re doing kids’ robes, a kitchen capsule, more beach products, bucket hats and all sorts of products for the home.  Our strategy is very much product development, but where growth is also for us is stores.  We’re about to open our first store, so store expansion is going to be massive, we hope. We also launched into the US a few weeks ago, and we’ve seen unbelievable uptake, to the point where we’re in the final stages of a national rollout with Nordstrom in the US. So, international, local stores and product development are the three pillars of success in 2023.  IR: Tell me more about the decision to open a bricks-and-mortar store, and what it will look like. JK: If we want to keep growing and keep being a brand that focuses on the customer and comfort, we want to hear feedback firsthand. We want to interact with customers, we want to bring them into the fold of what we’re developing, understand what they like and what they don’t like. But also it’s that first step in the direction of saying, ‘Can we as Hommey actually survive in retail and create a brand in physical retail?’ We’ve proven that online, and I think in our industry, that’s the hardest part. With such a tactile brand, translating that online is hard, and we’ve managed to do that. Now it’s about how we do it in-store. The overall aesthetic is very much about that elevated homeware experience. We want to take people on that Hommey journey, so when you come into the store, you automatically feel what it’s like to be a Hommey customer. In terms of the fit out, we’ve got travertine floors, the walls are very neutral, but we’ve got a big cushion wall that we’re installing, so you can see the different textures and the colours we’ve got. On the other side, there’s a wall of pegs where all our different towels and throws are hung. Then we have the full collection on display, which is our slides, our robes, all of our different cushion covers. Customers can come in and pair all of these different products together and style them with the help of our retail staff.  From an interior design point of view, we’re working with brands like Sarah Ellison and Gubi – really high-end brands – to keep positioning ourselves as a premium lifestyle brand, but still at that affordable price. IR: Opening a store and expanding internationally are costly endeavours – what is driving that? Are you leveraging the initial investment that you raised?  JK: I’m really lucky that I’ve got a father who’s a serial entrepreneur [Dodo co-founder Larry Kestelman], so we’re family office funded, and that’s been a big help to be able to get the business off the ground. We had an initial series investment that has helped us build a business really quickly and get our brand out there to Millennials and younger customers, but where we’re going, we will need further investment. We will look to raise externally, especially if our store goes well, then our strategy will be around store expansion, and we’re going to need to raise to facilitate that growth.  IR: I know not every business is profitable right away, and sometimes there’s a strategy around when to reach profitability. What does that look like for you? JK: We’re not profitable yet, but we’re getting there pretty quickly. The way we structured the business is very much around putting the brand first. That means we over-capitalise a little bit on our content marketing and brand. But I do feel like we’re not just in the game of product, we’re in the game of brand, so we have really pushed hard on that, which has ultimately meant that we haven’t been profitable over the past two years. However, we have a really clear growth trajectory to profit, and we’re not far off that now. Over the next 12 months, as we continue to launch into the US – and we aim to be in Europe as well – we will start turning a profit pretty soon. As of year two, we turned over roughly $4 million, so we’re experiencing about 120 per cent growth, year on year.  IR: Any challenges on your radar? JK: Digital advertising. Going back to my private equity days, I saw a lot of brands thrive on Facebook, Instagram and Google. It used to be very easy to get cut-through, but since the start of last year, with the iOS changes, and the disruption of TikTok coming into the market, advertising and acquiring customers has become harder than ever.  The question that we’re asking ourselves is, ‘How do we continue to grow in the digital landscape, but also be different and rely on different channels for growth?’ This is ultimately why we’re getting into retail and why we’re looking at international markets – to be able to find new revenue streams and channels to keep growing the brand because the traditional form of running an ad and getting a sale has become a lot more complex than it was in the past.  IR: You mentioned your dad before. What has it been like working with him since you started Hommey? Any lessons that he’s taught you, or vice versa?  JK: When I pitched the idea to my old man, it was May of 2020, and he said, ‘I will never get into retail and I just don’t know why you want to get into retail.’ It’s hilarious, because fast forward to where we are now, and he probably has one of the biggest retail groups in Australia.  In terms of the advice that he gives me, he’s obviously an unbelievable businessman, and I think what he does a really good job of is simplifying complex issues. He understands how to get to the core of what you’re doing and what the challenges are and how to address them. He’s a great sounding board and mentor and, honestly, we have an unbelievable relationship. He’s my best friend and he’s a groomsman in my wedding.