F ounded in 2014, men’s swimsuit brand Fair Harbor is far from the first of its kind. But last year, it became the first to turn a profit of over $18 million by turning recycled water bottles into swim trunks. Fair Harbor's sibling cofounders, Jake and Caroline Danehy, say they were able to grow the brand's revenue from $2.3 million in 2019 to $18.1 million in 2020 thanks to an environment-driven mission and old-school marketing that relies on radio, mail catalogues and out-of-home ads for sales.
"We were really frustrated by plastic bottles and everything going on in the environment—that's the backbone of our business," says Fair Harbor cofounder and CEO Jake Danehy, 27, who made the Forbes 30 Under 30 list alongside his 24-year-old cofounder and CCO sister in 2020. "But that's not really what sells our products; we make a superior product people want to wear, that's what sells."
Growing up, Caroline and Jake spent summers ferrying between their home in New York City and Fire Island's car-free Fair Harbor beach. Each year, they noticed more and more plastic water bottles floating through their sandy getaway.
In 2014, they decided to do something about it. Jake, a junior at Colgate University studying geography, entered the college's pitch competition for emerging companies. He pitched Fair Harbor, a men's swimwear company that makes its trunks from single-use water bottles, and won the competition, securing $20,000 in funding and mentors in judges Jennifer Hyman, Jessica Alba, MC Hammer and Neil Blumenthal. Alongside Caroline, then a high school senior at Manhattan’s Ethical Culture Fieldston School with a fashion blog and love for sustainability, he laid the groundwork for the business.
Unfortunately, manufacturers quoted recycled plastics-to-swimsuit fabric at about $12 per yard, which was more than they could afford. "No one was really doing this in 2014," says Jake. But utilizing the pitch competition prize money, they made the down payment and made Fair Harbor's first swimsuit in China.
With limited merchandise, they spent 2017 selling their suits at over 500 trunk shows up and down the East Coast, banking $141,000. After a year on the road, the Danehys settled into a New York City office. They believed they could win a share of the $21 billion swimsuit market by focusing on e-commerce and traditional advertising.
Six years later that strategy has paid off: the profitable company has attracted about 300,000 customers. Radio—specifically the Howard Stern Show on SiriusXM—has been crucial to their sales, as have the more than two million catalogues they've sent to prospective customers in 2021, as well as Fair Harbor logo's positioning behind home plate in Yankee Stadium. This all helped the brand surpass 2020 revenue within the second quarter of 2021.
"They obsessed on a problem and figured out how to solve it," says Tracy Gardener, a professor at New York University, who serves as a board member to both Gap and Fair Harbor. "They figured out how to use a fiber that's best for swim from plastic bottles found in the ocean. They remind me of everything I've watched inside of the great companies I've had the incredible fortune to work for."
The 10-person company's growth last year is especially notable as travel and beach vacations, the primary reason consumers spring for new swim gear, plummeted to record lows during Covid-19.
During the first five months of 2021, Fair Harbor generated $23 million. The trajectory isn't too surprising, though. Both the swimwear and sustainable fashion categories have been growing at a steady clip, with the global swimwear market expected to increase 38% to $29 billion by 2025 as people increase spending on vacations and beach time, according to Statista . Similarly, sustainable fashion is expected to grow 50% to $9 billion by 2025. Sitting at the cross section of these industries, Fair Harbor has the market on its side.
"Sustainability has become the price of entry, rather than the reason for buying," says Simeon Siegal, managing director of equity research at BMO Capital Markets. "Apparel is growing increasingly comfortable and increasingly more technological, so a focus on sustainability allows the consumer to feel a bit while promoting consumerism."
The Danehys, however, are hoping Fair Harbor looks more like Ralph Lauren than Vilebrequin. "Our goal is to be the next great American heritage brand, and doing it the right way—sustainably," says Jake. To start, they're doubling down on investments in traditional retail stores and marketing channels. This summer they'll be partnering with 30 Nordstrom stores nationwide. And unlike any heritage brand, Fair Harbor has recycled over 7.5 million water bottles into its trunks.
"We don't want to rely on Instagram or Facebook," says Caroline. "We want to have multiple touchpoints to a customer—whether that's a five-year-old boy seeing an airplane banner run across a sky or a mom listening to SiriusXM on her way to drop her kids off."
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