Former Skins CEO Jaimie Fuller knows a thing or two about success and failure, having built a thriving business that then went bankrupt due to a series of bad decisions.
He recently spoke to the Kochie’s Business Builders first act podcast about the mistakes that led to the epic demise of his sportswear company and the lessons he learned from losing it all.
Fuller is not afraid of controversy. An outspoken advocate for equality in sport, he is known for using his brand power to speak out about doping, homophobia and corruption and is a champion of human rights.
Despite these good intentions, he has made many missteps during his entrepreneurial journey, and in first act he generously shared the heartbreaking story of the demise of his sports compression clothing brand, Skins, in hopes that others can learn from his mistakes.
A fresh start
After acquiring the company – formerly known as Compression Garment Technologies – Jaimie realized that he had to work hard to make it a success.
“I got in just before it went bankrupt – they launched in mid-2002 and were out of business by the end of the year. I put the money in to save the company and then looked into where we could take it. That got pretty wild. rit – there was no due diligence, it was a gut feeling on my part, but it generated a lot of interest and I saw the need to act quickly,” explains Jaimie.
“We ran a TV campaign on the theme of ‘We don’t pay sports stars to wear our products, they pay us’, which was rooted in truth as we sold to elite athletes, teams and organizations in Australia and the UK. The campaign just exploded.”
Hot water over advertising claims
As successful as it was at the time, it was this slogan that would later get the company in trouble with the ACCC, who claimed the slogan was misleading.
‘We had converted a number of transactions,’ explains Jaimie. “If we had a hundred sales to elite clubs and institutions, we might have turned about eight into sponsorship partnerships, so there are still 92 paying our money. It didn’t occur to me that it only takes one to ruin that claim.
“The biggest mistake was how we managed that process. When we were approached by the ACCC, instead of apologizing and paying the fine, I fought it. It cost me several million dollars; it was really stupid to do.
This public mistake, while painful and costly, has taught Jaimie some valuable lessons about accepting responsibility and mitigating financial risk.
“Raise your hand early and accept the responsibility,” advises Jaimie. “Open your mind, because I was very narrow-minded at that stage; I was convinced we were right. We should have raised our hands and said, ‘Sorry, there was some context around it, but it’s no excuse, we’ll pay the fine and move on’. I think the fine would have been 50,000, but instead it cost somewhere in the neighborhood of $2.5 million because I also had to pay back my private equity partner.
“In the end, it’s my fault,” he admits. “You live and learn.”
Listen to Jaimie Fuller on the first act podcast:
The Downfall of Skins
After 17 years at the helm of Skins and building it into an internationally recognizable brand – years of successful activism and advocacy, campaigning against industry corruption, sports doping and human rights abuses – Jaimie became forced to file for bankruptcy in 2019 and let the company go.
“It was really hell,” he admits. “It all started in 2007, just before the global financial crisis. I made a big mistake; I made a terrible, terrible deal with private equity partners that gave them huge, guaranteed returns.
“In 2012, I had to buy out the partners because if I didn’t, they would essentially take over the company and take over the whole thing. The only way I could do that was to borrow a large amount. So I bought them out and got 100% ownership of Skins, but that changed everything within the company.
“We went from a dynamic, entrepreneurial organization – focused on building a brand and doing the right thing – to cash, cash, cash. We had all this debt and that led us to do some stupid things for short-term benefit, which killed the company in the long run.
“The company that lent us the money took over the distribution rights and within 12 months the distribution had dropped from eight million to two million, and then even lower. That money was critical to making our repayments and financing the business.
“In the end, the amount of debt we carried was just overwhelming. It became a spiral that led me to bankrupt the global operation.”
Picking up the pieces
While a company’s devastating fall may have brought others to their knees, Jaimie says hitting rock bottom helped him achieve a mindset shift that brought new clarity and purpose.
“I can tell you, the run-up to it was three years of hell; by going that train wreck in slow motion and trying everything to save the company,” Jaimie recalls. “I was sure I would fall into a deep depression; that it would be three to six months of pure pain and hell to recover. But it was 11 days,” says Jaimie.
“On the 12th day I had a conversation with myself. I spoke to myself as if I were giving advice to someone else in my shoes and miraculously this fog lifted and everything became clear.
“It was like a switch flipped; it was incredible. Suddenly I had clarity and I looked at things in context. I realized that compared to what everyone else goes through in life, this is nothing. And that changed everything for me.”
Refreshingly vulnerable about his business ups and downs, Jaimie shares a lot of passionate insight into using your brand as a force for change in the world in this candid episode of first act. Listen to the full podcast now.
Every Tuesday, Kochie’s Business Builders releases a new episode of first actbecause every story has a beginning.
Listen and subscribe now:
- 1 A fresh start
- 2 Hot water over advertising claims
- 3 The Downfall of Skins
- 4 Picking up the pieces