How a former Lehman Brothers banker turned the tables and built a pandemic-proof business

Declan Ee always knew he wanted to run his own business. 

But when he graduated from University College London in 2006, he saw his peers applying for jobs at investment banks and decided to give it a try.

His first gig? Lehman Brothers.

“I liked seeing how businesses worked on a global scale. So that was very interesting.”

But the 2008 collapse of Lehman Brothers not only roiled global markets, it was a shake-up for Ee too.

“I was in the subprime mortgage division. I dodged reporters while walking to Lehman in Canary Wharf. It made me double down on leaving banking at some point.”

The 39-year-old Singaporean did leave investment banking eventually in 2016, to build his furniture start-up, Castlery. 

Today, the business is bringing in millions and its modern pieces can be found in over 300,000 homes globally, said Castlery. CNBC Make It finds out how.

It all started when Ee came back to Singapore 11 years ago and was furnishing his marital home. 

His good friend and co-founder Fred Ji was also looking for affordable modern furnishing. 

“We shared a bond in that … [the process was] frustrating. We want to get the nice pieces but they are so inaccessible.”

That is due to things like the price point and managing multiple lead-times of furniture, he explained.

That’s when they had the idea of selling affordable, designer furniture to “urban millennials” between 25 to 45 years old. 

“This age group, you go through a lot of change. You leave school, you start building your career, you get married, you have a kid … We add stuff to our homes,” the president of Castlery told CNBC Make It.

Ee wanted to provide options to young adults who want to have an “inspiring space” and “something more than Ikea,” — without breaking the bank.

In 2013, Ee and Ji went digital-first with Castlery, allowing consumers to view a virtual studio and purchase furniture online — a disruptor in the traditional furniture industry. 

“When customers started to shop online for furniture, they realized that, ‘I don’t need to go to 25 furniture stores anymore.’ The next time they need to buy something, they will do it online again.”

Ee’s experience in investment banking, where he “saw many blow-ups,” has taught him a thing or two about running his own business. 

When it came to financing Castlery, Ee was determined to not go down the “venture capital route” for his start-up.

“With the VC game, you want to mock up your valuation every 18 months. And when we started, I knew that we had to spend time learning the business,” he said. 

Having no experience in the furniture retail business, Ee estimated he needed six to seven years to master the ropes, which is as long as the “fund life” of VCs. 

“Straightaway, there’s a conflict … that’s why stress happens — you don’t have clarity of thought, because you have to scale at all cost.”

Instead, Castlery’s initial investments came from family members and other entrepreneurs who have exited their businesses.

“At the core, it’s about building a good foundation and a strong business that gives value to your target customers. That will always translate no matter what, whether you want to sell or list your company,” Ee said. 

When the pandemic hit in 2020, Castlery had just begun expansion into the U.S. market, apart from its presence in Singapore and Australia. 

“I thought, wow, this is really not meant to be. I was really stressed because our most profitable country was Singapore and there was the circuit breaker too.” He was referring to partial lockdowns in 2020, designed to break the chain of infection. 

But his stress turned to surprise as he saw a surge in e-commerce, with nationwide lockdowns pushing shoppers to rely on internet retailers for their consumer needs. 

And as millions of employees were shut out of their offices and required to work from home, the “meaning of home” also changed, Ee observed. 

“It’s not just a place you come back to [after work]. You are doing your work, you’re pursuing your passions, you have your kids. How you furnish your home matters because you’re spending much more time there.”

With more people looking to upgrade their space, Castlery’s growth “accelerated,” said Ee.

“We were growing so fast, our faces were turning green.” 

According to Castlery, the company grew “six times” during the pandemic, making over $100 million in the most recent financial year ending March 2022, and became profitable in 2020.

However, with or without the pandemic, Ee believes that Castlery’s biggest selling point is the design and functionality of its products. 

“I speak to customers from the U.S. every month and they are like, ‘We love your washable range of sofas!’ I thought, ‘Okay, it’s a thing?'”

“I guess being Asians, we are quite practical,” he said.

Ee added: “They would explain that in the U.S., you won’t have this option at this price point.” According to him, his furniture is “20% to 30%” cheaper than similar pieces in the market.

That is achieved through a “rigorous process refined over the years,” said Ee.

“Each collection is assigned a buyer, an engineer and a planner — this trio runs a well-oiled machine to ensure products go to market in a timely and cost-efficient manner.”

He added: “[The] buyer finds the best in class manufacturers to work with. Engineers redesign inefficient processes while a planner works to source materials at the best possible price point.”

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