The Scale Series — Part IV: Localized Luxury

The Scale Series — Part IV: Localized Luxury

The early 2000s were full of brands launching adjacencies, some of which we looked at in Part II and Part III. Michael Kors, Marc Jacobs, Burberry and many others created endless diffusion lines and offshoots that tried to take the spirit and cache of the mother brand and infuse it into sister brands that sold lower priced products. While some of this worked, many brands also struggled as they scaled past their brand promise, which resulted in a litany of offshoot brands that were all diluting the main brand.

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The Scale Series — Part II: Brands that overscaled

The Scale Series — Part II: Brands that overscaled

In Part I, we looked at the factors that both businesses and brands need to consider when scaling. With this foundation, we'll now examine some of the failures and some of the successes in the fashion industry. This piece will look at the former, while Part III will look at the latter.

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The Scale Series — Part I: How and why brands overscale

The Scale Series — Part I: How and why brands overscale

A person starts a business to grow it. The general goal is to earn some revenue, and then some more revenue, and then lots and lots of revenue, while being profitable along the way. The process of getting there is often called scaling the business, with different definitions of what scale is. 

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Loose Threads Podcast: The Fashion Industry Is Not Exactly Broken — with Marc Bain of Quartz

On the 9th episode of the Loose Threads Podcast, I talk with Marc Bain, the fashion reporter at Quartz, about his path to covering the fashion industry, which included working for a fashion brand in New York; how he found his reporting beats and how the storylines often intersect; the similarities and differences between food and fashion; how the blockchain might impact the fashion industry; the current state of affairs in the fashion industry; how luxury brands will continue to scale globally; how luxury brands are approaching Amazon; how brands are handling sizing online; how Digitally Native Vertical Brands (DNVBs) are approaching retail; and how malls are being revitalized. 

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Nasty Gal: the dangers of ephemeral growth and focus

Nasty Gal: the dangers of ephemeral growth and focus

Nasty Gal filed for Chapter 11 bankruptcy protection last week, which allows the company to reorganize its finances but continue operating. The company, started by Sophia Amoruso as an eBay store selling vintage clothing in 2006, quickly grew over the past decade into a middle-market retailer that sold "limited-edition designs that cut through the noise" to west coast women and girls.  

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Buzzfeed Product Labs and the intersection of everything

Buzzfeed Product Labs and the intersection of everything

The most interesting piece of news last week was that Buzzfeed is formally launching a commerce lab. Named Buzzfeed Product Lab, and led by Ben Kaufman, the former founder of Quirky, the goal is to bring the Buzzfeed mentality—and its massive reach—to consumer products.

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Hype vs discovery: lessons from the Spectacles rollout

Hype vs discovery: lessons from the Spectacles rollout

The world is full of hype. Hype starts as a whisper, then turns into a growing thunder, finally transforming into all out hysteria. This chain of events can apply to anything. A new brand, the latest sneaker drop, "Hamilton." The problem, however, is that hype is really boring. It often seems like it would be fun to be a part of, to be one prodding the fire. But again and again, I always come back to the fact that hype is a ticking time bomb, waiting to explode. 

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Loose Threads Podcast: By Hand, Not by Machine — with Tull Price of FEIT

Loose Threads Podcast: By Hand, Not by Machine — with Tull Price of FEIT

On the 8th episode of the Loose Threads Podcast, I talk with Tull Price, the founder of FEIT. The episode covers the evolution of Tull's career that led him to start FEIT; why Tull is mostly interested in making the best products from the best materials over making money, bucking many trends that ushered in mass production and globalization; the process for building FEIT products and how it differs from a traditional footwear design process; why FEIT sells mostly direct to customers and the importance of retail stores; how FEIT has built immensely strong relationships with the craftsmen who make its products and why this is crucial for the brand's success; and where the name FEIT comes from.

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From online to offline: cost structures and sunken costs

From online to offline: cost structures and sunken costs

The future potential of a business is closely linked to where it stands in the present. If the future is headed north but the current business is positioned south, it's going to take a lot of work to reorient itself. In the commerce world, the most evident manifestation of this idea is brands—especially online only ones—increasingly opening up retail stores. The fact that brands who were started less than ten years ago on an online-only premise are now popping up in the physical world is a testament to the industry's rapid change.

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Loose Threads Podcast: Building the Future of Clothing and Unlocking Social Mobility — with Abe Burmeister of Outlier

On the seventh episode of the Loose Threads Podcast, I talk with Abe Burmeister, one of the founders of Outlier, a New York label that set out to build the future of clothing. What started as a brand aimed as casual urbanists who used bicycles as their primary method of transportation has morphed into a highly experimental, technical and refined menswear label.

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When replicating your previous success isn't enough

The biggest head-scratcher (that probably should not have been a head-scratcher) last week was that Totokaelo, the well-known Seattle boutique that opened a flagship almost a year ago in New York, had sold to Herschel Supply Co, the company that makes those backpacks that are everywhere and also owns Need Supply Co.

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Are algorithms the future of factoring?

Capital is the lifeblood of a business. For companies that make physical things, such as fashion brands, accessing the right capital at the right time is crucial. Both direct to consumer and wholesale brands have to pay for products to be manufactured before the end seller— the customer or the retailer—pays for them. This capital hole, which is entirely man-made, requires many brands to look for outside capital to finance their operations. 

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At the whim of a buyer

People have been selling things since the beginning of time. A transaction between two people or businesses is nothing new. More recently, the nature, context and demands of the transaction have changed. Deals can be more complex, take longer, and involve more people than before. But a trade is still a trade.

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Loose Threads Podcast: Creating a Shopping Street on the Internet — with Chris Morton of Lyst

On the sixth episode of the Loose Threads Podcast, I talk with Chris Morton, the founder of Lyst, the fashion platform that acts as a shopping street on the internet. We talked about how Lyst was started; where the fashion industry is going; the underutilized value of returns; where Amazon is taking over; the powers and pitfalls of in-store fulfillment; the opportunities for mixing data and human-driven curation; and what luxury brands need to do to build digital cultures. 

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"Cutting out the middleman"

If I had to pick one phrase that best sums up the current state of ecommerce startups, “cutting out the middleman” would be it. Almost no other phrase has been uttered so much while simultaneously being the founding pillar of so many soon-to-be venture-backed startups.

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Amazon's success phasing out list pricing is exactly where JCPenney failed

There's an article in the New York Times entitled Amazon Is Quietly Eliminating List Prices. List prices, or manufacturer suggested retail price (MSRP), serve two main purposes. First, it's illegal for a company that sells goods to a distributor or retailer to dictate the price of an item. A clothing brand can't tell a boutique how much to sell a dress for. That's price fixing and is illegal. The brand can, however, "suggest" a retail price, which is how we end up with list prices and the "suggested" in MSRP.

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Vetements follow up: Kanye, staying in stores longer and selling online

The response to my piece on Vetements and the exaggerated death of wholesale has been really exciting. The piece's contrarian view clearly resonated. Even so, there are a few points I want to expand on. Adam Wray, from Fashion REDEF, sent me a nice note after the piece came out highlighting a few points worth discussing further. 

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Macy's, newspapers and Amazon eating the middle of the retail market

The middle of the retail market continues to evaporate. Two articles recently summed up this transformation: Big-Box Retailers Have Two Options If They Want to Survive, in the Harvard Business Review, and The Macy's factor in Politico. Big-box retailers—Macy's, Walmart, Target, Kohl's, JC Penny, you name it—are suffering as the internet, and more precisely Amazon, continues to devour the middle of the market.

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