Case Study: MorphCostumes

Headquartered in Manchester, MorphCostumes is a fast-growing online retailer of fancy dress costumes, including the iconic Morphsuit. Read on to learn how an all-in-one spandex suit spawned a costume empire, with growth capital and support from BGF.

Flair for fancy dress

The idea for MorphCostumes came to co-founders Fraser Smeaton and Gregor Lawson while they were on a friends trip to Dublin.

The group were all wearing fancy dress and one person wore an all-in-one spandex suit from Japan. “He got an incredible reaction,” says Fraser. “Hundreds of people stopped watching street theatre to take pictures of him. We often wear fancy dress and had never seen a reaction quite like it.”

It took wearing the suit a few more times for the friends to start considering them as a business opportunity. Fraser joined forces with his brother Ali and together with Gregor they decided to test the water – creating a business plan to sell 20,000 suits – all while keeping their day jobs. Fraser’s experience from his career in marketing helped them to get a website set up and they hit Facebook to see if there were any takers.

“It went totally crazy,” he explains. “After a year, we’d sold a million pounds’ worth which was when we decided to quit our jobs and concentrate on the business full time.”

The team found the fancy dress market to be a lot larger than they had anticipated. A trip to an American trade show resulted in a meeting with US costume giant Party City which placed a large order and transformed the business.

On the shoulders of gnomes

“We met with BGF in 2012 to see if they could support our growth,” explains Fraser. “At that point, we only had one product and one channel to market. They really helped us to diversify our product base and distribution.”

Having BGF on board also helped the young founders to professionalise. “While we had experience in middle management in blue chip companies, we’d never sat on a board before,” says Fraser. “They took us from being some people selling costumes online to a larger, entrepreneurial business.”

BGF backed MorphCostumes with £4.2 million. The firm started selling to other major retailers, such as Walmart and Target, bolstered skill sets when it came to setting up on Amazon and developed a wider range of outfits. These included inflatables as well as piggyback or ‘ride-on’ costumes, which make it appear the wearer is being carried on the shoulders of a fictional character such as a leprechaun or gnome.

After an introduction by BGF, the company also appointed Ralph Kugler, formerly a Director at Unilever, as Chair.

Bigger and better

From the original Morphsuit, the company has now expanded to offer inflatable costumes, suits with battery-powered lights, outfits for children, and more. Looking to the future, MorphCostumes plans to continue building on its existing product range, with Fraser and the team focused on getting even more products out through their well-developed distribution channels.

As of 2024, the company now employs 68 staff and offers 1,200 varied designs to its global customer base. The majority of its sales come via Amazon, across 12 countries, with additional US sales driven directly through retailers Target and Walmart.

Value creation

With our investment in 2012, alongside valuable support and guidance, MorphCostumes has been able to successfully:

• Bring new products to market
• Target overseas expansion
• Develop its supply chain
• Make strategic acquisitions

In 2024, we successfully exited MorphCostumes, through a company and management buy-back. The deal delivered strong returns on our original investment, reflecting the impressive growth that the business has achieved over the past decade.