Rohan Blacker: Business lessons from a sofa entrepreneur

“Sofas were still sold in a very fragmented, traditional way [in the mid-2000s],” recalls Rohan Blacker, “there wasn’t a dedicated mid-market, you might say.” 

On the one hand were high-end stores. “These shops were intimidating,” says Blacker. "They were like high-fashion stores and you would press on the bell and they would look you up and down and work out whether they wanted you in their store or not. Their sofas cost vast amounts of money, there were long lead times and they were just for the very few.”

There was a big gap between that and “very regionalised” stores, which were much cheaper and catering to the “low market”. 

So Blacker and co-founder Pat Reeves saw a gap in the mid-market, just as online sales were beginning to take off. 

Blacker had quit a career in the law to take the plunge as an entrepreneur. He already had two businesses behind him, a gastro-pub in London and a food delivery service called Deliverance. The former had been mired in problems, but he managed to exit the latter with a sale to private equity. 

Sofa.com found success by prioritising online sales of sofas, in an age when websites were still more like showcase pages rather than portals for making sales. The recent dotcom crash meant that not everyone was convinced online was the future. The iPhone had only just come out. 

 Blacker and Reeves secured the premium domain name of “sofa.com” for $100,000, which Blacker believed was vital for market authority.  

“We called it the nuts name, the best hand [in card games], the best name you could possibly get for a sofa company. We just assumed that when anyone typed in ‘sofa’, sofa.com would come up first, because it’s sofa dot flipping com!” 

Blacker now admits theyprobably wouldn’thave gone ahead with the business in the firstplace, iftheycouldn’thave secured the prized name. 

The brand with its convenient online name slowly grew, achieving revenues of more than £20m. It had capital to invest in scaling. It eventually controlled the entire supply chain, building a dedicated factory in Poland to oversee the construction of every frame and cushion, for example.  

The future looked bright for the business and Sofa.com was sold to a private equity firm in 2015 in a deal reported at the time to value it at between £40m and £50m. 

But four years later, it was sold again for just a nominal sum to Mike Ashley’s Frasers Group in a rescue deal. 

It has had the chance for a fresh start and new direction under its latest owners, opening concessions in House of Fraser department stores, while still maintaining a small number of its own showrooms. The brand is still very much alive today. 

Looking back, Blacker considers the 2015-19 period to be a “car crash, which should be studied at business school”. 

So what went wrong, in his opinion? 

He believes it was a case of “death by a thousand cuts”. He cites mistakes such as excessive discounting, reduced marketing budget and high rent from opening too many physicalshowrooms. 

“Small decisions whittled away the brand or the margin,” says Blacker. “They got hooked on discounting, so when they weren’t discounting they weren’t making any sales and when they were discounting they were making sales, but at a very reduced margin.” 

These days, Blacker still works in the world of online furniture retail, so he’s a rival to the company he originally founded. 

He operates Pooky, a lighting company targeting the "mid-market" gap in homeware.  

He also runs Schplendid, a furniture brand focused on sustainability, trying to combat the idea of "fast furniture". 

The sofa market has changed a lot in the two decades since he started Sofa.com, he says, but he thinks he’s identified a new sweet spot. 

“The mid-market has become heavily populated now,” he says. So his strategy is to be “mid-market without the thrills”, while also appealing to the conscience. He has designed a small range with an emphasis on sustainability, so the sofas don’t contain foam and should last a long time. 

He plans to keep costs to a minimum “by not having fancy showrooms, by not having expensive marketing.” 

It seems sofas will define his legacy in business. 

"You develop a sort of illness in a way,” reflects Blacker. “You can't watch a film without looking at the sofas!”