Paul Stoneham, boss of hair straightener manufacturer ghd, has improved his company’s supply chain and volumised sales and doubled profits over the past four years

How ghd is getting ahead

ghd boss Paul Stoneham has improved his company’s supply chain and volumised sales


Over the past four years Paul Stoneham has doubled profits at ghd Photo: Paul Grover

By Anna White

8:00PM GMT 04 Jan 2014

The hair straightener manufacturer ghd is barely recognisable after a makeover from its chief executive, Paul Stoneham, who will launch 20 new products over the next five years.The Canadian has pumped up sales volumes by 24pc since June 2009, and plans to introduce a new volumising tool in the spring – a first for the ceramic hair irons company.

Yet, despite its place in the hearts and at the heads of many British women, the company was in turmoil prior to Stoneham’s appointment, having seen a 40pc fall in profits in 2008.

“ghd had always maintained a good relationship with the end consumer, and was a very strong brand, but it had lost its way,” said Stoneham.

Private equity firm Montagu acquired the company for £160m in 2007 from its founder, the former hairdresser Robert Powls, and his two business partners and hired Stoneham two years later to treat the damage.

Its popularity with the stylist community had waned as the company stopped giving salons first and exclusive access to new products.

“The distribution channels had become blurred in the minds of the stylists, who begrudged recommending us to clients, and refused to stock the straighteners,” said Stoneham, who built up 13 years’ experience at pharmaceuticals giant Procter & Gamble before taking Boots Healthcare to record multiples. “Management had not been taking care of the ghd heartland.”

Over the past four years Stoneham has doubled profits at ghd, growing Ebitda – earnings before interest, tax, depreciation and amortisation – from £15.6m to £31.7m, and leading the company to be bought by investment firm Lion Capital last summer.

His continuing stylist-centric growth strategy has involved investing in training courses for hair salons in how to use the styling tools, opening a studio in London – previously the company had been based in Leeds – and sponsoring trade events and awards ceremonies.

ghd now takes a special interest in supporting up-and-coming stylists and two months ago it announced sponsorship of the Victoria’s Secret fashion show.

“We took the company from its entrepreneurial roots to the next level, professionalising it,” Stoneham said. “It is all about exclusivity for the stylists and top retailers, and controlling distribution.”

ghd now only supplies professional salons and premium retailers such as Harvey Nichols, Selfridges and John Lewis.

Stoneham also turned his attention to streamlining and securing the supply chain, by cancelling production in Korea and building two factories in China.

“We’re now using top tier suppliers in China that also make mobile handsets and electronics, so are steeped in tech manufacturing,” he said. “We have better control of our supply chain and more consistent standards.”

Stoneham also stripped back the straightening irons themselves, redesigning and rebuilding them from scratch to eradicate any faulty products coming out of the factories.

He built a specialist research and development laboratory in Cambridge to benefit from science industry expertise in that area – an exercise that had generated 50 new patents in core territories and a pipeline of 20 new products to roll out over the next four to five years.

“ghd used to be a one-product company,” he said, “but we now have a robust pipeline focusing on the physics, not the chemistry, of haircare.”

The counterfeit market had also been costly, damaging the brand across the world.

Shoddy construction, defective components and a disregard for safety checks had caused electrocution, burns and harm to users’ hair.

ghd now has a dedicated brand protection team that works closely with the Government, trading standards, customs and police, and trademarks and holographic stickers mean the products are now easily identifiable at border control.

“We work closely with the British and Chinese governments to tackle the problem at source and shut down factories in Asia,” he said. “It used to take fraudsters four to six weeks to copy new designs but now it takes them 10 to 12 months to reverse-engineer our new technologies.”

In co-operation with Google, it also closes around 1,000 copycat websites a year.

In the run-up to Christmas, ghd launched its Eclipse straighteners, which Stoneham described as “space age” with more sensors in the ceramic plates to maintain optimum temperature throughout use, taming wild hair and making it sleeker for longer.

Stoneham has, however, remained tight-lipped about the next invention in the pipeline, which is to be released this Spring. “Imagine adding volume versatility,” he hinted.

Aside from internal changes and his philosophy of “releasing the energy from middle management” the external fashion and beauty market promises a healthy-looking future for ghd.

“British women have long had sophisticated beauty routines, but men are now catching up,” he said. “Footballers and musicians are influencing male styles, but while some men buy their own ghds, the majority of male users borrow their girlfriends’.”

Image has never been so important, he said. “People are younger and fitter.” The image-conscious consumer is also pressed for time, often balancing family, work and a social life, creating a continuing demand for products that create salon-like results quickly.

This winter ghd has recommended five key hair styles, from a sleek ponytail to the Brigitte Bardot flick, or a topknot inspired by Paris Fashion Week. According to Stoneham, the model Cara Delevingne sported the “do” of 2013 with an effortless and natural, wavy style.

But celebrity influences sit second to stylists in driving fashions and success for Stoneham, who believes growth – both by product range and across geographies – comes back to distribution through salons.

“We’re a supporting act and an enabler to the stylists,” he said. “We help women replicate what the stylists do, building female confidence and allowing them to get out of the door quicker with better hair.”


About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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