Interview with Xupes director Joseph McKenzie

11th June 2014
Posted by: Hugh Taylor

Joe tells us about moving into the new office, staying motivated, and buying second hand watches.

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Interview with Xupes director Joseph McKenzie | Xupes Magazine

I am sitting in Wickham Hall, a newly converted thatched barn on the outskirts of Bishop's Stortford. Surrounding us are a number of sister conversions, a farm and a nature reserve. A rather idyllic setting for a handful of up and coming businesses. Although the building retains its original beams and structure, inside it is a hub of modernity. I pass a number of delicate looking antiques and artworks in the hallway and am given a brief tour of the office. The atmosphere seems laid back, lively and surprisingly young. I take a seat in some sort of conceptual pod that I am told is an Eames chair. The room has a kitchen and a table tennis table. Since my arrival there have been two black terrier dogs at my feet who seem very keen for some attention. I am offered an Ipad to have a flick through the Xupes catalogue whilst I wait.   

I am here to meet Xupes CEO Joseph Mckenzie who is only 27. Since he created Xupes in 2010 Xupes it has been expanding at a remarkable rate. I am told that in 2013 they saw 190% capital growth and tripled their staff numbers. Already this year they have secured over £1.5 million capital investment, which will double their current stock of over 20,000 luxury products. This year the Xupes team predicts it will triple its annual turnover, it has an upcoming executive marketing campaign and plans to expand into fashion and wine. I wanted to understand what was driving these impressive statistics.  

Joe enters and shakes my hand with a beaming smile on his face.  

  • Hello. So this must be the new office. How are you all settling in?  

Very well thanks. We love the beautiful location and all the space. Being somewhere like this is pretty inspiring. It’s great to take the dogs out for a walk to get a break and clear the head.  

  • I bet, the décor is pretty nice too. How’s your table tennis?  

(Laughing). It’s improving. We are pretty busy up here but we think it’s important to keep our staff entertained. We take inspiration from that fun, innovative environment you see with businesses like Apple and Google.  

 New Xupes office, young friendly

  • I noticed there are some other businesses setting up here, and even a rather nice looking café, how is your relationship with them?  

Well I seem to be building up quite a tab! (Laughs). I have to say actually, credit to the landlord, he seems to have selected some like-minded, innovative, young businesses. We are all getting on very well. Soon there is going to be an event up here, we will all be working together to display our different products.  

  • Do you get many visitors out here?  

We have a lot of loyal clients and returning customers who like to drop in from time to time. We often entertain clients and take them for lunch. For those coming from abroad we pick them up from the airport, we like to have a very personal relationship with customers.  

  • What about local walk-ins, it’s not exactly on the high street?  

No, primarily we are an online company but actually we are just about to undergo a local advertising campaign, we are looking to sponsor local sports clubs and charities, and raise brand awareness in the area as we are still relatively unknown. Anyone who fancies can book ahead and come to meet us.  

  • So tell me then, how did you first start all this?  

Well I was studying photography at the London College of Communication, part of the prestigious University of the Arts, I was looking for a way to earn some extra cash. I had always been quite business minded, I suppose I got that from my dad who owned different businesses and worked in antiques. I had already been using eBay to buy and sell airsoft gun parts as I was working at an airsoft company in my holidays. I started getting an understanding of the online market place and decided to do some research on what products I could buy and sell.  

I bought my first Must de Cartier watch for £200 and sold it 5 days later for £500. I was hooked!  

  • That makes it sound pretty simple, it can’t be that easy?  

No it’s not. But generally second or third hand watches are a fairly safe bet, in fact they can often go up in price, or at least hold their value.  

A lot of it is knowing what to look for and marketing. I suppose my degree in photography taught me a thing or two about the importance of presentation.  

  • Similar to antiques then. So your dad was already in the business, how much did you learn from him?  

Dad has been in antiques for over 30 years. He is a real expert in his field, he has a library of over 500 antiques related books that he has read. Actually he is the backbone of the business today. He is incredibly cautious, this probably has something to do with his accounting background. I take more chances and have often had my fingers burnt as a result. He puts the reins on me and balances me out. We make a good team!  

  • Yes it sounds like a good combination. So tell us more about getting your fingers burnt?  

Well if there is one thing I have learned from the online marketplace it is that I shouldn’t always be so trusting of people. I have been sold fakes and empty boxes. I have dealt with retailers that have defaulted, last year I lost about 20k with a company that defaulted, I was a little naïve with them. But you can’t get it right from day one, it’s a long process. My dad has been insistent on this.  

  • Ouch, 20k must have been painful. It sounds like your dad’s experience is paramount. Is it difficult to work with family?  

Obviously working with family has its ups and downs but generally it has gone very well for us. We are from a Catholic background and we all have a very close relationship. Actually I think this is one of our main strengths.  

  • That’s interesting, the close-knit family business is less common nowadays. So, other than learning to be more cautious, what other tips can you pass on?  

For me it has been essential to build the right team, at first it’s all you, and then you have to get the right people that fit. Aside from a basic skill set, I mainly look for characteristics that fit in with the Xupes ethos – honesty, integrity, awareness, and humility. I really feel that character is first and foremost.  

I think we have a very positive office atmosphere. We have a laid back environment and we work amongst the team, we don’t work in our own offices. We have a lot of team building events like go karting days or sports evenings, we run cake days too.  

We like everyone to have an opportunity to really develop their skills, our team generally work in all the different areas of the business and are given freedom to be creative. I think this is the secret to keeping people motivated.  

 

  • That makes sense, what about advice on a personal level?  

Positivity. I always like to try new things and have a go. We just invested a lot of money in some Vertu phones, people were worried about whether they would sell but they have already been really popular and the margin on them is excellent.  

  • Yes I read your magazine article on those phones. Also I see that you have recently expanded jewellery and added fashion and wine categories to your website, do you see the company moving into any other areas, technology perhaps?  

We have recently added a lot to our business. Now we really need to concentrate on developing our prowess in those areas. We want to make these categories as excellent as we can. We have just taken on a number of experts in jewellery, art, wine and fashion. We want to focus on developing our brand and staying within categories that suit our business model.  

  • What other goals have you for Xupes over the next few years?  

Well we are interested in opening a store at some stage. Probably in London or in another major city. The thing is though that the market is becoming saturated so we want to do something different to try to stay ahead of the game. We are currently thinking along the lines of a lifestyle store, some sort of hybrid between a café, art exhibition and a place where you can see, say, watchmakers in action. The idea is that it would be a nice place to spend some time, informative too, but ultimately you can purchase products if you are interested. Kind of like our new office, clients can come in for a chat, flick through some magazines and brochures, have a coffee, we don’t like that traditional shop atmosphere which at times can be intimidating and make you feel that you should be buying something.  

Also, we are looking at setting up a new foundation with a portion of sales going to local charity.  

Xupes Office lifestyle shop 

  • That sounds like the future of shopping! What other goals do you have in mind?  

Where do I start? We have so much going on in terms of growth. We are recruiting almost 1 person a month and we are looking at doubling the team in next 6 – 12 months. In fact I just interviewed someone to help manage the watches side of things.  

Our current focus is on international growth, we are having our website written in multiple languages and will be undergoing SEO, digital marketing, and PPC campaigns in each country.  

We are also growing our consignments area of the business i.e. selling items on a customer’s behalf. This makes up about 10% of current turnover. We want these customers to keep coming back to us.  

We are considering bringing watchmaking in house in a move to expand on some of the services we recognise that our current customers need.   Finally we have an exciting new project about to launch. It’s something we have been working on for 2 years with investors. It’s a new concept which has fantastic potential, but I can’t disclose any details right now.  

  • International development sounds like a challenge to me. We know that Asian investment is one of the key factors in the performance of the luxury goods market, have you had any dealings with Asian countries and do you have any plans to appeal to that market?  

We already do. Asian investment makes up 30% of our sales. We have specifically amassed a huge Asian art collection. Also we are having the website translated into Mandarin and are starting a campaign to advertise Xupes on Chinese Google.  

Ideally we would like to open an office in Asia or work with a like-minded company to establish our brand in, say, Hong Kong. That may be a little further down the line though.  

  • Let's talk a little about watches, I have been told that is your main area of interest. What is it you like so much about watches?  

Yes I admit I love watches, I think it’s something about the intricate mechanics and complex manufacturing that makes them so appealing to me. I have always been a very practical person and enjoyed taking things apart and putting them back together this stems back to repairing guns when I was 15.  

When my parents bought me a Jaeger Le Coultre Master Compressor Geographic for my 21st I fell in love with it. The brand was less known at that time. I always liked the slightly more refined brands.   And what is that you’re wearing now?   It’s a Girard Perregaux WW.TC in 18k Rose Gold‏. Actually it’s on loan. Mine is currently in service, it has been in there for 3 months, it can take a long time for mechanical watches to be repaired. Mine is an IWC Portuguese 7 Day, but to be honest I’m quite enjoying the current one, I’m going to miss it.  

  • What tips can you give to anyone looking to invest in second hand watches?  

Generally limited editions or watches with military provenance are winners. To be more specific though, I think it could be worth taking a gamble on a Bremont, they are a small UK based watchmaker with a similar style to IWC. They have close links to historical aircraft. I think 1st Limited edition Bremonts are definitely ones to watch.  

  • So you seem like a guy with a lot of energy, what do you do to keep yourself motivated on a daily basis?  

To be honest I have been feeling a bit drained over the last few weeks, we had a very large new stock arrival so sorting this needed to be prioritised. However, generally I get up at 6, I try to work out in the morning. I go swimming or cycling on my new road bike. Then I have a nice breakfast. I often walk the dog with Kirsty (his wife) at 8 and usually I arrive at work feeling very positive by 9am. In the evening I try to relax and switch off, though sometimes I find this difficult, my wife tells me not to think about work after 19:30. Mainly I like to spend evenings with Kirsty or with other family.  

  • Well you seem like a guy that has it all in order, you must have some difficulties too. Have you had any major challenges and do you see any in the near future?  

I think as an entrepreneur and business owner, whilst you may have hobbies and other interests, you become a bit of a work machine and never really switch off. You’re constantly thinking about the next thing. It’s quite funny, when I go to bed I fall asleep immediately and I think that must be because my mind is always so active that when it finally switches off, I'm out!  

I am really trying to concentrate on separating my work from my personal life, I find it a real struggle. I am also aware of the need not to neglect other things in life that later I may regret.   

In a business sense, with everything growing so fast at the moment I am battling with structure. The systems have to be in order to make sure we maintain our levels of customer service, efficiency and work processes during expansion.  

Another thing that I would say the whole team have noticed is that when working in a luxury environment, it can be very easy to have a warped view of reality. If you’re handling these products on a daily basis it can tend to give them less value in your mind. We have to pinch ourselves not to become materialistic and unrealistic. We need to stay grounded.  

  • Yes I could see that quickly becoming a problem. So we know you are a positive person, how would you define your approach to your work?  

I am a ridiculous planner, I am constantly writing things down. I list everything and have a very methodical approach. My wife jokes about my wardrobe because my shirts are in colour order and apparently I have more clothes than she does!  

Even at night I may think of something and I write it down to revisit it the next day. Sometimes I get very stuck if I can't stick to plan, it can completely throw me off course. This is going to be a challenge as my workload constantly grows.    

  • Finally then, what are your dreams for the future?  

My personal dreams are to start a family, this has always been really important to me. Other than that, I am keen on property, at one stage I wanted to study architecture, maybe I will build a house one day.  

My work dream is to build Xupes into one of the UK's best luxury online destinations. Also, I have even thought about starting a watch brand. But that one’s still a bit of a pipe dream – you never know though!  

New Xupes Office Wickham Hall 

New Xupes office at Wickham Hall.

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