Costume drama playing out in a Clapham flat

It was on a stag weekend in Dublin that three rugby mates dreamt up their idea for a fancy-dress business. Four years on, it's grown into a fast-expanding, multi-million-pound company, albeit headquartered in a rented flat in Clapham Junction.

Fraser Smeaton, 32, set up the business with his brother Ali, 30, and university friend Gregor Lawson, 32. "We were in Ireland in 2007 when we saw a friend wearing an all-in-one dance suit," Fraser explains. "It got people talking. Afterwards, when other friends saw our photos of the weekend, they asked where they could get one. We bought some off eBay, but they were very thick and you couldn't see out of them."

Despite that, the trio regularly donned them to sporting events and stag nights. The interest that drummed up led them to look into designing a superior, all-in-one Spandex bodysuit wearers could see out of. They each invested £1000 and began to develop the suits around their rugby and work commitments: Ali was working in M&A for Barclays in Dublin; Fraser was head of BT's broadband marketing department in London and Gregor was working in brand marketing for Procter & Gamble in Weybridge.

"We discovered a website called alibaba.com," explains Gregor. "It allows you to source manufacturers from around the world. We found three companies who could make prototypes and told them how we wanted our suit to look and feel, with the challenge being to get the right mix of polyester and Spandex so the wearer could see through it without anyone being able to see their skin."

They placed their first order with a factory in China. Then on May 8 2009, Fraser's 30th birthday, the trio donned the costumes, with the brand name Morphsuits ("because when you put one of our suits on you morph into a more extroverted, fun and awesome version of yourself") and website stamped on their bums, and went to watch a rugby match.

Orders starting flooding in to the then "very amateur website," says Ali. "We managed the sales growth by ploughing all our profits back into the business. We haven't had to put in any more of our own capital."

Stock began piling up in Fraser's rented bedroom, then in Stockwell. "There would be 200 Morphsuits in there - I could just about get into bed. Gregor and I would meet after work and start up our mini production line with him reading out the addresses and me labelling and packing."

Morphsuits then chose Essex start-up International Marketing and Distribution to handle their packing and postage. "They've really grown with us," says Gregor. "Containers of our suits arrive at their warehouse in Clacton-on-Sea from China, they pack it and send it out across the UK and Europe."

Morphsuits now has warehouses in Australia, America, Canada and South Africa, with half of all sales coming from North America. The founders say international growth is due to their presence on Facebook. Customers post photos and videos of themselves on the Morphsuits Facebook page; some even organised mass "morph get-togethers", and there are now 855,000 Facebook fans.

Turnover hit £1.2 million in the first year but the trio didn't quit their day jobs until six months later, when they were convinced their business wasn't a short-lived craze. Revenues reached £10.9 million this year, following a deal with America's largest fancy-dress retailer, Party City, in February.