How we morphed a party outfit into a multi-million pound costume business
Jennifer Sieg meets Fraser Smeaton, co-founder of Morphcostumes, to see how he turned an impromptu party outfit into a multi-million pound fancy dress business
On 9 May 2009, entrepreneur Fraser Smeaton sold his first ever head-to-toe spandex bodysuit.
Within just three years, he and his friends – who soon became co-founders – made their first ever £1m profit, with a turnover of £10.3m.
“There was such a demand – people were turning up on my doorstep,” Smeaton, now 45, says.
Little did he know, it was this impromptu “side hustle” that would soon turn into what is now a multi-million pound fancy dress brand, Morphcostumes.
Morphcostumes, which is headquartered in Edinburgh, has become something of a global British success story over the past 15 years.
Its products – which now range from its flagship “morphsuit” to all kinds of special occasion costumes – are sold online across 12 countries and stocked in major US retailers such as Walmart and Target.
There are all kinds of fancy dress occasions that keep the momentum going for the team at Morphcostumes, with one of the most notable being Halloween.
In the run-up to Halloween, the month of October sees an average of one costume sold every two seconds, Smeaton says, making autumn one of the busiest seasons of the year.
How Morphcostumes started
The idea to trademark and sell a few hundred morphsuits came to Smeaton, his brother Ali and his friend Gregor Lawson following a boys’ weekend in Dublin.
The entrepreneur can still remember the heads turning at his friend, who was dressed in rather unique stand-out attire, walking in through the crowd.
“We all had to dress up in a certain colour and one of my friends turned up in an all-in-one spandex suit,” Smeaton says, with a laugh.
“Two hundred people stopped watching street theatre, turned around, and he became the main attraction.”
Spandex suits were of course nothing new, but there was never really an established brand-name behind them. The idea to create one, Smeaton says, was ripe with opportunity.
The group of three decided to put in £1,000 each to order a total of 200 morphsuits, using whatever was left to set up a website.
First taking to Facebook to create a group for posts and advertising, the 200 morphsuits were sold out within 10 days.
“Then we put in our life savings of £7,000 each – which was our life savings aged 30 – and we managed to buy 2,000 and we sold them very quickly,” Smeaton says.
“We were able to charge so much money for them because of the demand that we could self fund the business, because we were making such good margins because we were first to market, and it grew from there.”
What it has become
The new and exciting trend of morphsuits eventually became the new norm, causing the momentum in sales to slow.
By 2015, the business had to pivot. Smeaton says the team lost a million pounds in a year, which led them to making the difficult decision of laying off half of their staff.
“Our margins were getting squeezed and we made the inexperienced mistake of not grasping the nettle of the situation and realising that there was over-exposure and competition,” Smeaton says.
Naturally, they had to learn how to diversify their product range and ask themselves what consumers were really looking for.
The answer, he says, was a reliable, well-established brand offering a range of products to suit nearly every occasion – whether that be Halloween, a stag-do, birthday party or music festival.
So instead of being in the niche that we were that got us into the industry, we then leveraged everything we built with that niche into doing all sorts of costumes.
“So instead of being in the niche that we were that got us into the industry, we then leveraged everything we built with that niche into doing all sorts of costumes,” Smeaton adds.
“That is still the journey we’re on, adding 250 new designs in the core categories each year.”
Will the Halloween momentum continue?
In 2023, Morphcostumes saw yet another record year of turnover, reaching nearly £42m.
The team accredits much of its success to its growth in market share on Amazon, which accounts for 85 per cent of all sales.
Smeaton says Halloween celebrations are also increasing worldwide, including the UK, which continues to cause even more of an uptick of sales during the autumn season.
The US market is one to watch and dial into closely, he adds, with nearly one in three Americans dressing up for the spooky season every year: “That is 100m plus costumes that are getting sold.”
Looking forward, the team seems confident that it can continue to diversify its product range as it looks to keep up with ever-changing consumer trends and long-established cultural occasions around the world.
CV
Name: Fraser Smeaton
Company: Morphcostumes
Founded: 2009
Staff: 65
Title: Co-founder, CEO
Age: 45
Born: Belgium
Lives: Clapham, London
Studied: Edinburgh University
Talents: Consumer Marketing
Motto: Test Quickly & Cheaply, Scale what works
Most known for: Inventing the Morphsuit
First ambition: To have my own business
Favourite book: Good to Great
Best piece of advice: You can’t do it all yourself. To be able to grow you need to leverage either a Team, Money or IP.