Castore founder Tom Beahon on the journey of a challenger brand trying to become the next Nike

Fantastic to be here, guys. Thank you for having me.

Yeah, I've definitely got a few more grey hairs and wrinkles than I did back then, but hopefully for the right reasons.

It's an exciting journey that Castore has been on. It's a very exciting journey. I think we're lucky to operate in an incredibly exciting market. You guys know better than anyone, the sports landscape is one that's been through a period of—I don't think it's an overstatement to say—seismic change in probably the last five years or so. I think particularly since COVID was a catalyst that really accelerated a number of those changes that were already happening, and we, being an entrepreneurial business, have been able to pivot and capitalize on those. So if I think about the ongoing globalization of sport, the digitization of sports, the opportunity to better engage with, connect, and ultimately monetize fans—this is an incredibly exciting landscape. And beyond that, sports—and particularly my market, sportswear—has not had a huge amount of new entrants, disruptors, challengers, innovators. It's been dominated, I'm 34 years old, really by the same brands, certainly for my generation, as long as I can remember. And I think as with any sector where you don't have new entrants or new challenges, there's a risk that things become a little bit complacent or stagnant. So we are really lucky to operate in the sector that we do, and hopefully we've done some quite exciting things in the last few years.

So there's two parts to that answer. The first isn't really a good answer for a podcast, but it's true—it is just what we're passionate about. Phil and I co-founded Castore. We both come from a, to my mind, very normal working-class background in Merseyside. We don't have any entrepreneurial background in the family whatsoever, so there wasn't anyone that we could look up to and ask questions about starting a business. Everything that we've done, we've learned on the job. When we started Castore, the mindset was no more or less complex than: we're going to work harder than anyone else, we're going to make more sacrifices than anyone else, we're going to be more committed than anyone else, we're just going to refuse to give up until we make this thing successful. We had no definition of what success would be—whether that was a hundred million turnover, a million, a billion—we didn't think like that. It was just: we're not going to stop until we make this thing a success. And the only way you can follow through on that mindset is if you are deeply and genuinely passionate about what you're doing. The only thing that Phil and I are deeply and genuinely passionate about is sport. So that was really the genesis of Castore. My alarm goes off at 5:00 a.m. every day and my wife hates it. Not many people are awake at that time, but I love it. The only reason I get out of bed nine days out of ten with a smile on my face is because I'm doing something that I genuinely love.

Because you're getting this amazing brand visibility and awareness and volume of eyeballs, but it's giving your brand a stamp of approval, a credibility that is hard to replicate by traditional marketing. It's one thing for me to fire an advert on Facebook saying my hoodie is great, but when you see an elite athlete wearing it day in day out, that gives it a stamp of approval. So the Castore brand accelerated, and once we'd proven that model — it took us a while, it's a tough market, it's operationally very intense — once we'd worked that out we realised there's a huge opportunity. But to really capitalise on that and become a truly global brand, we need investment, we need more capital to allow us to invest strategically and for the long term.

You've got to have humility. You've got to look yourself in the mirror, recognise where improvement can be made and try your best to fix things. That's not any kind of specific issue or challenge, that's just a mindset you have to have. Sport — we're all so lucky to make a living in such an exciting sector. There's so many positive things about sport. One of the challenges is it's intensely scrutinised. You can't have the good without accepting those aspects as well. I see it as a real positive in the sense that all of us learn more from setbacks and challenges than from runaway successes. When you're successful you think, brilliant, let's go and do more of that — you don't really stop to think about why and how to improve. So you've got to have humility, the ability to look in the mirror and fix things. When you're disrupting huge multinational incumbent brands that are happy with the status quo, it's inevitable you're going to have challenges. You can't let it blow you off course, you just have to be really rational and logical about fixing things. Equally, the big brands have exactly the same challenges. The difference is when you're a challenger brand, everyone likes pointing them out to you. It does give me a smile that whenever we get positive press, no one sends it to me. As soon as you get challenging press, everyone loves forwarding it on — just checking you've seen this, mate. So it's part of the course, you've got to learn from it. You can't let it get to you because these things happen when you're operating in the market that we are, when you've positioned yourself in that premium sportswear space.

You've hit the nail on the head with the latter. Anyone in the industry knows how this works. The reason Castore has been able to have the success we have — raised the money, got to the valuation, the revenue growth — is because the market wasn't working. Many of the clubs we've partnered with were dissatisfied with the status quo and we've managed to fill that gap. You've got to have humility, you can't say it wasn't a problem, it's all made up. You have to fix problems where they arise. But people in the industry understand these problems are inevitable when you're dealing with hundreds of thousands of units and elite athletes in different climates and temperatures and humidities. As long as you deal with things in the right way, people who understand the industry are really understanding and accepting. If people can see you're passionate about what you're doing, they want to give you the benefit of the doubt. It's very similar here.

No, we want to partner with people where we genuinely believe we can add value. If you have the success we've had, you'd be naive to think the big brands are not going to react. Nike are runaway leaders, the kings of the market. Adidas are interesting — psychologically they were number one, they had a multi-decade start on Nike and have been completely dominated. So for Adidas, they look down a lot more than they look up at Nike. They almost see it as an impossible task to challenge Nike, so they've kind of stopped trying. Nike don't look down at anyone else, they only look into the future. That's why they lead the market. But for Castore, when you disrupt a market and break a status quo, it would be silly to not expect pushback. That doesn't put me off, I love the competitiveness. The fact that Adidas are thinking about Castore — if you'd said that to me seven years ago when my mum mortgaged the house, I would have thought you were crazy. Volkswagen don't like Tesla, you wouldn't expect them to. Adidas don't like us, I wouldn't expect them to. I want to create great products, build a great brand, add value to teams, and there's no doubt in my mind we'll continue doing that for many seasons to come.

I'd love to give you guys an exclusive but I'd get told off if I did that.

We've got a few interesting things in the pipeline. We're not bored at Castore, that's for sure.

The market historically had been very wholesale-led. The brand would manufacture the product, sell it into the wholesale market — the retailer or the club — and then they'd sell it onto the fan. Three parties: the brand, the club, and the retailer. You don't need a degree in advanced mathematics to know that if you merge three parties into two, that's more margin to share. We built Castore for about five years — a global supply chain, global distribution network, and global technology platform. We recognised we could leverage that infrastructure for sports. Rather than just paying to have our logo on the chest and selling into retailers at wholesale margin, we could operate the website and sell directly to the fan. You fundamentally change the margin dynamics. Most importantly, you have direct data — you can understand buying habits, fan behaviour, and over time build a model better geared towards servicing those fans. It's not just financially more attractive with more margin to share, which clubs benefit from, particularly in an age where Financial Fair Play is being implemented like never before. If you can show the club that data is being understood and analysed and share those learnings, that adds value way beyond the kit partnership. Being focused on data and understanding how fans interact, not just domestically but globally — that's where the real value is in moving from sponsorship to partnership.

The key is that you fundamentally change the dynamic from being a sponsor to a partner. Sounds simple but it's a fundamental change. You're sharing data, information, skill sets, personnel, and knowledge. It's a very big change from how the market has worked historically. I wouldn't say there's any singular catch-all answer. We operate in football, rugby, cricket, Formula 1, different motorsport categories. It depends on the sport and team as to how integrated we become and where they are on their own data journey. But there's no doubt in my mind this is a one-way direction of travel. All teams across the sporting pyramid, across categories and geographies, are moving in one direction: you have to understand your fan better than anyone else, you have to have that direct relationship, you have to own that data.

I'd love to see where these reported numbers come from, because I've yet to see one that's accurate. Fanatics are a good business in many ways, particularly in the US. Where we're different is that we manufacture the product ourselves — we're a brand. The value I receive from a partnership with Rangers, to use your example, is I get my logo on the chest every time they play on Sky Sports or in the Europa League, and I'm selling more Castore t-shirts and hoodies off the back of that. That is incredibly valuable, huge growth potential for Castore, and these partnerships are a vehicle that drives that growth. So I can look at these partnerships economically in a very different way than Fanatics, where they're just a platform. Fanatics need to work with Castore, Nike, and Adidas manufacturing the product, and the club needs to earn a margin — three parties rather than two means the margin is diluted. So the principle is the same, we're all thinking about digitising revenue streams and engaging directly with fans. But we're thinking about it differently, and I think Castore is the only truly vertically integrated model in this market, which is a big reason we've had the success we have.

This comes back to the genesis of Castore as a digital brand. We've got eight years of data telling us where our customers are. This isn't a 'we like the idea of South America so let's go there' — we have actual data. So you utilise that, think about where people like the brand, then overlay the qualitative things and your entrepreneurial intuition. The Middle East looks really interesting. We sell a lot of product there already. You look at what's happening in Saudi, the investments in infrastructure in Qatar and the UAE, the long-term focus on driving sport and making it part of their economies. You don't need to be a rocket scientist. The Saudi Premier League is the most obvious example. Australia has always been a fantastic market the big brands have historically overlooked. The Far East — China, Japan, South Korea — are very interesting. Each market has local nuances, so working out how to build and execute a business plan there is the real challenge. My big focus is on discipline. We have the ambition to be a global brand, but we need to be disciplined in execution. If I had to say, the Middle East is the primary focus for now.

Investor partners — the best time to raise money is when you least need it. We're not actively in the market to raise funds at the moment. Equally, we met a lot of people through last year's fundraising that I'll keep in touch with. You never know what the future holds. If you're an ambitious business, you're always on the lookout for the next partner. The sovereign wealth funds in the Middle East have put huge money to work as they diversify away from fossil fuels, and sport and tourism will play a big role. Is there a place for Castore within those macro trends? That's a really interesting question I'm interested in working out over the years ahead. I'm 34, a lot of this I'm working out as I go along using intuition. There was a time Russia was the future, a time China was the future. These things move in cycles. My job is to make sure we're at the forefront of the next cycle, not doing what everyone else is talking about.

We love golf, it's a fantastic category for us. But something really important to understand is that the golf customer generally purchases physically rather than digitally. If you care enough about golf to be a member of your local club, every club has a pro shop. Players like to support their local club shop, so they buy product physically. There are a lot of people very good at third-party retail — our expertise is digital. Golfers buy slightly differently. That doesn't mean it's not a market we can go after — it absolutely is, and we do really well in it. But compared to other sports — tennis, and paddle which is new but growing incredibly quickly — the customer demographic is slightly different. So sports verticals have their different nuances you need to navigate.

Both really interesting. Stores — absolutely, yes. We really like stores and will absolutely open more. When you expand internationally, which is very much one of our big priorities, opening a physical store is a real indication of intent. Your website with local languages, currencies, and a distribution centre is significant investment, but a physical store where someone can come in, experience your brand, touch and feel the product — that offers something no website can replicate. So we really like stores, particularly when entering new markets. Launching a localised website and marketing campaign augmented with a physical store has worked very well. Equipment — I'd put that in the balance between ambition and discipline. Is there scope to look at equipment? Yes. But is it the low-hanging fruit for building a global brand? I'm not sure it is short term. It's a balance any entrepreneur grapples with. We're growing quickly, profitable, cash generative — there's a risk you spread too thin. We want to create the best sportswear in the world, partner with great teams, and be a British brand competing globally. I'm not sure equipment achieves those things in the short to medium term. Let's see.

We're both quite similar but also different in fundamental ways. The benefit of being brothers — there are quite a few examples in business where brothers or sisters have been really successful — is that implicit trust. Whenever there's a big decision, you can have a robust, tough conversation knowing you're not going to fall out. You can be super honest, you're going to be brothers at the end of the day. Once a decision's made, there's no you or me, it's just we — we made the decision and we need to make it a success. Phil and I are incredibly lucky to have very different skill sets. In the slightly tongue-in-cheek way we describe it, it's my job to bring revenue into the business and Phil's job to turn that revenue into profit and cash flow. His skill set is operational — logistics, systems, technology, supply chain. If I'm in the office two days on the bounce, I get itchy feet and need to be out in the market. Hopefully between us we cover more bases than we would individually.

The IPO one — I get asked all the time, and I struggle to get excited about it. Look at valuations for FTSE 100, 250, AIM companies — they're way below American and often Asian peers. You don't get valuation benefit, and you have to put up with huge governance demands. Reporting quarterly makes it harder for founders to make long-term decisions. One of Castore's core competitive advantages is that we can make long-term decisions. If something is exciting but takes two, three, four years to pay off, I can do that now. I'm not sure I could as a public company where you risk only focusing on the short-term — what I call sugar rush. So never say never, but IPO is one I struggle to get excited about. People ask whether the big brands will just buy you out. I struggle to see that as the end of this story. My brother and I have put blood, sweat, and tears into Castore. We've still got so much room for growth. I truly believe we're only just finding our feet. I'm still so excited to wake up every day. The ambition hasn't changed — to be a global brand. I love McLaren, Burberry, Bentley — the British brands that are truly global. That's what I want Castore to be, and I don't care how long it takes. We always say 'better never stops' — that's our DNA. I'm not going to stop until we get there. There isn't an end as far as I'm concerned. If you're focused on the inputs rather than the outputs, you generally can't go wrong.

It's a great question — the exact question I'd ask if I was a journalist — but you'll have to forgive me for pleading the fifth, because there's no way of answering without creating headlines I don't want. In all seriousness, we're so lucky to have a platform and brand that legitimately can have conversations with some of the best teams in the world. That doesn't mean you win everything — this is a competitive market. I love that, bring it on. I think I can offer teams and customers something Nike and Adidas cannot. Is the sportswear market better for Castore challenging them? Unequivocally, it absolutely is. As long as I keep adding value, there'll be a lot of exciting things still to come.

Appreciate it, guys. Thanks for having me. Enjoyed it. Thanks.