Over 20 years ago, Tom MacGuinness was walking towards the Horse Show House in Ballsbridge one day with his wife, Carol. MacGuinness, the founder of the equine clothing company Horseware Ireland, was searching for a brand name for his latest product: a revolutionary new horse blanket the Dundalk man reckoned was "indestructible".
As they crossed the road towards the pub, his wife turned to him and uttered the phrase that would transform the business: “Rambo Rug – the horse rug that bites back.” Two decades later, the luxury Rambo Rug is still the linchpin product of the €30 million-a-year company, now a darling of the Irish equine exports industry.
Today is Aga Khan trophy day at the RDS Dublin Horse Show, when the horsey set gallops into town for Ireland's show jumping event of the year. MacGuinness is there too, flogging his famous horse rugs and other Horseware products from a huge tent at the RDS Simmonscourt.
Horseware exports more than 90 per cent of its products to 25 counties, so the RDS tent is hardly critical to its performance. But for MacGuinness, it is his annual “blow-out” stock clearance, in keeping with company traditions.
He is no Sylvester Stallone, but the 62-year-old Rambo Rug-maker is imbued with buckets of the nervous energy that characterises many entrepreneurs. There is an endearing zaniness to the man, such as when he forgets to finish a sentence before starting the next one. "Come on and I'll show you around," said MacGuinness, tearing up the corridor at Horseware's 80,000sq ft Dundalk HQ. The factory is quiet as most staff are on their summer holidays, leaving MacGuinness free to play on their sewing machines.
“It’s pretty handy that the CEO knows how to sew. I have this inquiring mind. I can’t leave things alone, I have to improve them. It’s like an obsession. I’m not an expert at anything, really, but I do know a lot about a lot of things.”
The Dundalk plant, which employs about 120, produces the Rambo Rug. Most of the rest of its horse and rider clothing ranges are produced in China, where Horseware has two factories, and at a plant in Cambodia. Unlike many textile manufacturers, MacGuinness hasn't outsourced production to Asia: "Those factories are ours – we bought them, we run them. Otherwise, how could I be sure everything was being done correctly?"
About 30 staff work on the Rambo line, making the industry’s most durable, breathable equine blanket. A premium product, it’s akin to a Gucci waistcoat for horses.
The rest of the Dundalk staff are split between the warehouse, sales and marketing, research and development, and a new custom design business MacGuinness has recently launched. Dundalk is also home to a Horseware retail outlet – two others were shut in 2007. The company distributes its products to 3,000 retailers globally.
Sales
About 70 per cent of sales are from horse products, with 30 per cent from its rider clothing ranges. The UK is its biggest export market, where it sells 30 per cent of its stock. A quarter goes to the US, with the rest spread around Europe and also Australia.
Sales last year were “just shy” of €30 million, says MacGuinness. “We expect to do €33 million this year. We’ve doubled the business since the recession started.” Not bad, considering he was almost bust 10 years ago.
Would he ever sell the business? “Of course, yeah, but we haven’t prepared it for sale. But our earnings [just under €2 million annually] wouldn’t get us a big price. If we wanted to ‘dress the bride’, I could easily treble that.”
MacGuinness' parents ran a riding school near Dundalk, although he went to agricultural college. On a work experience trip to Israel in 1970, his life changed forever. He says he met some "Jesus freaks" who showed him a passage from the Book of Revelations, about letting God into your heart.
When MacGuinness returned home, he had “an epiphany”, and has been deeply spiritual ever since. He says it is a “gift” that helps him run his business with passion. “I don’t worry – there’ll always be a solution. God is real, it’s a personal thing.” He quit college and spent the next eight years roaming South America as a Christian missionary, living in communes. “But it got too dangerous. There was a coup in Argentina, and 12 months later they were throwing my friends out of airplanes.”
MacGuinness returned to Ireland in 1978, started a family, and took over the family’s riding school. He realised the horse blankets of the era were “crap” – ill-fitting and uncomfortable for the horses. He began designing his own on an old sewing machine.
“I saw a problem that needed to be solved,” he said.
After a year, he perfected his design. He read a Start Your Own business book and “drove the next day down to the IDA” to ask for help to launch a company. He hired someone to run his riding school and began making horse rugs in his parents’ basement, selling them around the country. “It took me five years to get to annual sales of £500,000. I’d hate to do that again.”
Horseware grew steadily – the riding school was shuttered – before it took off in the early 1990s following the launch of the Rambo Rug. Horseware focused heavily on exports almost from the beginning.
Didn't the Rambo film-makers give him a hard time over the name? "They let the trademark registration lapse in categories 25 and 18 – clothing and rugs. I got it for all of Europe and America."
Trying times
MacGuinness picked up an Ernst & Young Entrepreneur of the Year gong in 2001, but soon everything went wrong. A premises he had in America was flattened by a hurricane, destroying €500,000 of stock. Ironically for the devout Christian, his insurance wouldn't pay up "because it was an act of God".
Then one of his Irish plants burned down. Then his lender, Anglo Irish Bank, tried to pull the plug on him because his textile industry competitors had all moved production to China and he hadn't. "I had lost sight of things. Costs exploded, and we were in trouble."
Around 2004, MacGuinness, who had stepped back from day to day operations, returned to save his business. “In 15 minutes, I took out €1.5 million of overheads.”
He shut a factory in Cavan, scaled back Dundalk, and moved most production (with the exception of the Rambo rugs) to China. MacGuinness "lost every penny I had made until then", and rebuilt the company almost from scratch. The memories are still painful.
“I had believed all the propaganda: ‘you’re the ideas man, let someone else run the business’. I didn’t even know how much money we had been losing. I was railroaded. I didn’t believe my gut.” MacGuinness leans forward, his voice crackling with emotion. “After it happened, I went to counselling for six months. I wanted to understand how I let it happen. I won’t let it happen that way again.”
Horseware is now thriving, thanks to “the lowest cost base in the industry” and a new proactive sales strategy. The company has also branched out into different product lines, such as equine health products and rugs for large dogs.
The business, in which his three children work, recently underwent a strategic review. MacGuinness says it needs up to €5 million of investment to take sales “through the €40 million barrier”. After that? MacGuinness is not sure, but he believes a merger with another European clothing company could turn Horseware into a global distributor of other firms’ products. For now, though, he is focused on organic growth. Horseware recently bought a small tailoring factory in Turin, to help it develop more high-end rider clothing.
“I still see opportunities. I’m in control, I can sleep at night. I know nobody can undercut me on price,” said MacGuinness.
With Rambo watching his back, everything should be alright.
