How this sister and brother co-founded a sustainable business generating $45.1 million in revenue
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Mary-Kate and Ashley Olsen, Venus and Serena Williams, and even Cameron and Tyler Winklevoss have proven that great companies can emerge from sibling relationships. Unlike business relationships between parents and children, sibling businesses are much more likely to be a partnership of equals.
While the dynamic can be soft or rocky (or a bit of both), the chemistry of sibling partnerships can sometimes be magical. For example, sustainable lifestyle brand Fair Harbor, a brother-owned company that was started by Caroline and Jake Danehy in 2014, when Caroline was a senior in high school and Jake was a geography major in college. ‘Colgate University.
The idea for Fair Harbor was pretty simple: use recycled plastic bottles to create an ultra-soft fabric for clothing with a fun, family-friendly brand that would evoke the feelings of summers spent on the beach at Fair Harbor in Fire Island, New York. The couple were inspired when they saw the effects of plastic litter on the shores of their beloved seaside town, so they turned that frustration into motivation. They decided to find a way to not only stop plastic bottles from polluting the water, but also to honor their special community in Fair Harbor and preserve these places for future generations.
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In the early years, the two-handed execution of the family garage with the help of family and hired friends, shipping up to 1,000 units a day by 2019. Fair Harbor achieved profitability in 2019 and went on to gross $18.1 million. income in 2020, in the midst of a pandemic. The business continued to thrive with gross e-commerce sales in 2021 reaching $45.1 million, thanks to the rise of comfort apparel and the brand’s experimental approach to advertising. Swimsuits now appear in multiple outlets such as Nordstrom, Saks 5and Avenue, and more than 250 specialty retailers, although for now the company maintains its own retail presence entirely online.
While the line was based on men’s swimwear for its first seven years, 55% of its customers are women, buying suits for the men in their lives. In March of this year, the company launched its first national television ad campaign. And in April, the brand will launch its very first line of women’s beachwear with 25 additional pieces. This month it secured a strategic investment from Broad Sky Partners to fuel its expansion into new product lines, further retail expansion and sustainability initiatives.
All in the family
In a joint interview with Jake and Caroline, it’s clear I speak with them that the business was a family affair in its own right. While supplies and manufacturing were outsourced to various factories around the world, the initial realization took place from the family home with the help of several hired interns. The two had taken over the garage. The kitchen table became the corporate headquarters. Folding tables in the living room formed the assembly line for the run, with a designated driver handling shipments between the tables and the post office. In 2019, the team sometimes shipped up to 1,000 orders per day. On Fridays, the team would pack up for trunk shows over the weekend; then the operation resumed every Monday morning
Several important lessons were learned during this time, says Caroline:
- “Courage would take us forward.”
- “There was no job too big or too small.”
- “Trunk shows would be unable to scale them to the size they wanted to grow.”
- “We had officially outgrown our parents’ garage.”
The two moved into a shipping facility and office space in New York City in September 2019, and have continued to grow over the next two years. Today, the company has 25 employees and occupies a loft-like floor in a building on the bustling streets of Soho in lower Manhattan.
Some of the challenges have become indelible memories over time. For example, to celebrate their first production run of 500 units, Jake and Caroline hosted a Fair Harbor launch party at the Delancey Rooftop in Manhattan for family and friends and set up a table to sell the shorts at the event. The first challenge of the night came when Caroline – who was not yet 21 – was almost refused entry to the establishment.
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The second crisis occurred when Jake went to the bathroom to try on a pair of the new shorts, only to find that the factory had glued the Velcro closure on instead of sewing it on. On at least some of the pairs, the velcro was peeling off the shorts. It was a near-disaster that forced the team to take back all the costumes they had sold and hire a local seamstress to sew the Velcro onto each enclosure.
“That night we learned the importance of customer service, quality testing, and treating every customer like family,” Caroline said.
What is most difficult about working with a sibling?
During the joint interview, the two reported many benefits, especially since the family is very close and the interests of the siblings – Caroline in fashion design and Jake in business – are well aligned. Both are interested in sustainability and the environment. Having distinct focus areas and clear boundaries has been beneficial.
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For the most part, the two “support each other” in a way few working partnerships could, they note. However, Jake acknowledged that the 4-year age difference caused a bit of friction during the times when he graduated from college and worked 100% in the business while Caroline finished her final years of college. Caroline admits to missing as many classes as she dared during peak business times and felt the pressure to carry the full weight of her role in business while meeting the demands of her college degree.
Where will Fair Harbor go from here?
In addition to 2021 accolades as no. 26 fastest growing private company and no. The 2nd fastest-growing private retail company on the Inc. 5000 lists, the Danehys have won the prestigious EY Entrepreneur of the Year award and the Reuters Responsible Business Award. The company plans to achieve B Corp status in 2022. The initial television campaign, based on a gritty old sailor’s humorous horror stories of the chafing of bathing suits and the ravages of salt, sand and aggravating mesh fabrics, appears on ESPN, Food Network, truTV, VICE and Comedy Central and seems to be performing well so far.
Riding this wave of momentum, the company has a strategic plan for the future, including expanding into new categories and opening a retail outlet in the coming year. But when it comes to the all-family business model, the founders have no regrets and are grateful to have created a thriving business that is not just a financial legacy, but has forged experiences and memories that filled them with joy.