Cecile Reinaud launched Seraphine in 2002 after spotting a gap in the market for stylish maternity wear. She led its growth for nearly two decades, selling a majority stake to Bridgepoint in 2017 and her remaining 33% stake to Mayfair Equity Partners at the end of last year. She shares her lessons with The Supper Club on scaling up and stepping back.
On expanding into the States:
British businesses tend to assume that it will be easy to break into the States because it’s a huge market, and we share a common language and culture. But you have to plan your expansion really carefully. You can lose money fast. The US population is about six times bigger than the UK’s – and everything is six times more expensive, whether you’re opening a new store or running an advertising campaign. Remember: the US isn’t a single market – every state has different rules and regulations so, in reality, it’s no simpler than expanding into Europe. We first started selling to the US online, and then we opened stores out there. If you have a physical growth strategy, tackle new markets one at a time. We were successful because we always did one thing well, before moving onto the next thing. We never over-stretched ourselves.
On private equity:
I sold a majority stake to Bridgepoint in 2017. I got a good multiple because Seraphine had always been profitable. For me, private equity was a way to take some cash off the table. Up until that point, I was only answerable to myself. If I missed a certain milestone, I’d think, “Nevermind, it will happen later”. Private equity brings a rigour to financial planning and it pushes you on the growth journey. You have a board that constantly asks “Why?”. As Bridgepoint manage a large portfolio, they weren’t on my case day in, day out. Even though, on paper, it was a big change (I went from being a majority shareholder to a minority shareholder with a work contract; I could have been sacked if they didn’t like me as CEO), I still felt in control of the business.
On stepping back:
I knew that if I wanted to fully exit Seraphine, I’d have to gradually remove myself from the day-to-day running of the business and show that it wasn’t completely dependent on me. So I hired a COO; I used a headhunter that I trusted, and I was very clear that I would eventually be exiting the business and handing over the title of CEO. Clarity is super important. The recruitment process was lengthy and time-consuming. I interviewed him several times (as did my investors and leadership team) and took him out for lunch. You have to make sure you’re bringing in the right person, they’re deeply motivated and you offer them the right share package. Once he was on board, I road-tested him for 18 months. When I’d gained a really strong confidence in his abilities, I handed over the reins as CEO. I became ‘president’ and stepped back to three days a week.
In the past, I under-invested in people. I’d work out the maximum amount I could afford to pay someone, then cap the headhunter to that salary. Later on, I started to imagine that money was no object; I’d ask to see all the CVs. I’d end up choosing a more expensive candidate but they were clearly better and they always delivered far beyond their salary. If you pick people that are middle-of-the-road and less exceptional, you’ll probably have to let them go two or three years down the line. Your business will outgrow them. You should always include a six-month trial period in employee contracts. If someone doesn’t perform well, don’t fall into the trap of thinking, “They’re on a learning curve. It will get better.” Usually, it just gets worse.
I toyed with the idea of becoming chairwoman but some of my fellow founders advised me that I might find it frustrating to be on the periphery, to no longer be in command. And so I fully exited Seraphine at the end of last year. I had an extremely attractive financial offer from Mayfair and have secured my finances for (hopefully) the rest of my life. I prepared myself, psychologically, for this new chapter. I'm involved in The Cherie Blair Foundation for Women, which helps release the potential of female entrepreneurs in low and middle income countries, and I’m in the process of interviewing for board positions. After running Seraphine for more than 18 years, it’s exciting to immerse myself in something new and intellectually challenging.