How Fair Harbor, one of fashion's fastest-growing sustainable brands, hit record sales during the pandemic

• Jake Danehy, 26, and his sister Caroline, 23, are the founders of Fair Harbor, a sustainable brand that turns recycled water bottles into clothing.
• Last year, the duo was honored for their work in fashion and sustainability with a spot on the coveted Forbes 30 Under 30 list.
• Jake and Caroline previously spoke to Business Insider about how they spent the past five years scaling their business to become a popular — and profitable — sustainable swimwear brand.
• The duo caught back up with Business Insider to unpack their strong sales during the pandemic — and how that led to the launch of their first kid's collection.
• A nimble approach to manufacturing helped, as did taking seriously customer feedback — especially about getting rid of that mesh lining.

Just before the pandemic hit the US, in February, Business Insider spoke to Jake Danehy, 26, and his sister Caroline, 23, the cofounders of Fair Harbor, a brand that turns recycled water bottles into clothing.

At the time of our first conversation, Fair Harbor's business was booming. It was on track to recycle over 3 million water bottles by 2021 and it had launched the Round Trip Initiative, a program where the company takes any old swimsuits from its customers in exchange for a discount code for future Fair Harbor purchases.

After spending five years scaling the business and opening pop-up shops throughout the country, the Danehy siblings told Business Insider they were reporting almost 1,000% year-over-year growth.

But then, of course, the pandemic hit, and the world started to spin.

Retailers shut down and people were no longer traveling. The menswear category, Fair Harbor's specialty, went into a steep decline, with Stackline reporting that the category saw a 64% decrease in demand in March. This meant the Fair Harbor duo were quickly forced to find a new way to market themselves to consumers. Surely this whole situation would have caused a dent somewhere in their business, right?

Hardly, Jake tells Business Insider. Sales figures in the months following the pandemic up through June, reviewed by Business Insider, were up 1,200% year-over-year, and their overall rate of near-1,000% year-over-year growth has remained steady. They have been doing so much business these past few months, that they went ahead and launched their kid's' line. It already has 20,000 on its waiting list.

"We've had to keep our heads down, stay creative, and stay incredibly nimble and agile"

Fair Harbor wasn't impacted much by the manufacturing closures during the pandemic, the cofounders said. One of the factories they use is "nimble" and found ways to open up safety, while the other one they use is part of a conglomerate, which allowed them to shift some of their production from China to another facility in Southeast Asia.

"We were able to get our goods on time and stay up to date. We did run out of inventory in the middle of June, but that wasn't a factory issue," Jake said. "We were able to take advantage of the market that was working for us and get behind it."

Jake said the company has spent the entire summer "off to the races" and that April was their best month to date in terms of sales, which then doubled in May. Then June "was awesome."

"It's been an incredibly exciting journey, we've had to keep our heads down, stay creative and stay incredibly nimble and agile," he continued.

Their company started off focusing solely on men's swimsuits, but Jake and Caroline said they are now interested in creating shorts that can be used for "all different things" and have been using these past few months to show that their products go beyond just men's swimwear.

"We really wanted to have kid's products for the holidays," she continued. "Since we started the company, we have always strived to evolve into a full lifestyle company and provide products for every member of the family. Kid's is our first expansion into that."

The duo said they have also been spending the entire summer ensuring that the quality of their kid's collection matches up with their men's. For example, they once had to redesign a few of their men's pieces, adding a boxer brief lining, after some customers complained that the mesh lining felt like having a "cheese grater" in their pants.

"Men hate mesh lining," Jake said. "We have heard from our customers that mesh lining has literally ruined vacations."

Neither of them wanted the children wearing their new kid's collection to go through that.

"These stories that women and men are telling us about the irritation and the chafing, it sounds horrible," Caroline said. "That's why all of our shorts have this super soft built-in boxer brief liner that's also sustainably made."

Kid's as a step into a full lifestyle brand

"We're very excited about the opportunity in the kids market," Jake said. "We're a profitable business and we did not raise any additional capital and we were able to fund [the kid's line] with our cash flow. We're keeping a lean and mean team."

The new Fair Harbor kids collection soft-launched this October. Caroline said they had been teasing the idea for a few months and it has gained "incredible traction."

As Business Insider previously reported, Fair Harbor was born in 2014. Jake was studying geography at Colgate University at the time, learning about global ocean currents and climatology. His studies got him to think more about the waste that was accumulating in the ocean.

So, he teamed up with Caroline, his sister, who had an interest in fashion, and together they created Fair Harbor, a sustainable fashion brand that turned recycled water bottles into clothing.

The duo brought forth this business idea to a mock "Shark Tank" competition at Colgate University, and subsequently won a $20,000 grant that helped fund the company. After another round of fundraising from family and friends, Fair Harbor was born and has since become one of the fastest-growing sustainable brands in the country.

Jake said they are now working on their spring and fall collections, the latter of which is his "passion project."

"I won't release exactly what we're working on, but I'm incredibly excited about these products," he said. "What we're really working on is having products that will be able to be sold and worn all year round."

Right now, Jake and Caroline are hunkering down at their parents' house in Westchester County, New York. They have plans to return full-time to New York City, and have already started working once more out of their offices in Soho, and managing their store out in Sag Harbor.

"A core value of our company has always been approachable sustainability, to show how people can make small changes to their everyday lives, and to live more sustainably," Caroline said. If there's a silver lining to the pandemic, she added, it's "that it's allowed us to slow down and to realize our impact on the environment on a day-to-day- basis, and what that impact looks like on a global level."