Just before Proenza Schouler’s Spring/Summer 2013 show, BoF sat down with the brand’s newest investor, Andrew Rosen, CEO of Theory and Helmut Lang, who revealed his latest investment in London-based label Les Chiffonniers.
NEW YORK, United States — American fashion mogul Andrew Rosen, CEO of Theory and Helmut Lang and an investor in several of New York’s most exciting labels, including Proenza Schouler and Rag & Bone, learned the ropes from his father, Carl Rosen, a successful garmento and former chief executive of Seventh Avenue dressmaker Puritan Fashions. Taking his son under his wing at the age of 19, Rosen senior helped to put young Andrew on a path — guided by gut instinct, not formulaic business models — that has made him one of the most respected forces in American fashion today.
Theory, the company Rosen co-founded with Elie Tahari back in 1997, began by incorporating Lycra, then a new material, into fashion basics, providing added comfort and enabling new silhouettes which proved a hit with young women. In September 2003, the brand’s Japanese licensing partner Link International (now traded under the name Link Theory Holdings), a subsidiary of Japanese giant Fast Retailing, owners of Uniqlo, acquired a controlling stake in Theory and subsequently, in 2005, went on to acquire the Helmut Lang brand from Prada, repositioning it as a designer contemporary label.
In 2010, as Theory began to feel a bit staid compared with advanced designer contemporary brands like Alexander Wang and 3.1 Phillip Lim that had quickly sprouted up and positioned themselves as designer fashion companies at contemporary price points, Rosen hired Belgian design prodigy Olivier Theyskens (formerly of European houses Rochas and Nina Ricci) to take the reins as the brand’s creative director and inject a jolt of fashion energy into the product. This year, Theory is expected to turn over more than $700 million in sales, making it one of the largest and most successful contemporary fashion businesses in the world.
Rosen has also famously invested in a slew of high-potential emerging fashion businesses, including the aforementioned Rag & Bone and Proenza Schouler, as well as Alice + Olivia, Gryphon and, most recently, Les Chiffoniers, a London-based brand which, BoF can reveal, is working closely with his son, Austin, who like Andrew before him, is learning about the fashion trade alongside his father.
With his son by his side, appealing product hanging from the rails and scores of stylish young women floating throughout the airy Theory headquarters in Manhattan’s Meatpacking district, Rosen seemed very much in his element as I sat down with the gregarious New Yorker to discuss the importance of gut instinct, how American fashion has changed, and what it takes to build a successful fashion business in 2012.
BoF: When you look back to the beginning of your career and compare how the industry worked then to how fashion functions today, what have been the biggest changes?
AR: You have to understand when I started in the clothing industry there were no computers. Communication was totally different. The world has changed so much. And as the world changes, people’s tastes change, the methodology of doing business changes, the methodology of buying and selling clothes changes dramatically. I’m sort of a bridge between the old way the fashion industry was back then and the new way the fashion industry is today.
When I started, I was 19 years old and my Dad was a very famous guy in the clothing business. I sat at his side and at 21 years old, I was running one of his companies. At 25 years old, I was the CEO.
Back then, I used to go to Bloomingdales and Saks at the end of the day and count the stubs to see how much we had sold. Nothing was electronic. You didn’t know how your clothes sold unless you went into the stores. There were no cell phones, there were no emails. If I wanted information, I had to find it myself. I couldn’t Google it. I didn’t have Style.com or Vogue.com. Information wasn’t instantly at your fingertips, so you had to learn to find what you needed and you had to learn to distinguish between what was important and what wasn’t, because you couldn’t waste your time. It taught you how to survive on your own, and it really was survival of the fittest. Today, the same information is available to everyone at the same time, in the same way.
Also, back when I started, most manufacturing was done in the US. But then companies started really moving manufacturing to China and Hong Kong and so on. Today manufacturing in the US is almost unheard of. I still manufacture our clothes here. But back in those days [everyone] manufactured most things in the US.
BoF: Do you think that there is a real future for manufacturing in the United States?
AR: First, if you look at successful businesses, for the most part, manufacturing and design go hand-in-hand. It is no surprise that shoes and accessories are so good in Europe. It’s because the manufacturing and design are right there [together]. The best jeans companies in the world are in LA — and the manufacturing is done right there.
I believe that it’s very important to have a manufacturing centre in New York to support the design [function] and the efforts of young designers here. The problem is that no one has invested money in the infrastructure here. If you look at what’s happening in China, big industrialists have invested billions of dollars in the manufacturing infrastructure. Big manufacturing companies have also invested lots of money in LA, because of the jeans and T-shirt business there.
I believe that manufacturing in New York City is a big opportunity. When Theory started, 75 percent of what I did was based in New York City. For Rag & Bone, it was the same thing. Without the manufacturing base in New York City, I would have never grown my business the way I did. For me, it’s not about saving the Garment Center. It is never going to come back in the way that it was in the 70s or 80s. But there is a whole new opportunity for the Garment Center to be revived in a modern way and I think that’s the important thing.
BoF: Basically what you’re saying is that without a strong manufacturing base in fashion, you can’t have a strong fashion industry.
AR: I don’t think so. Not at the high-end. Obviously at the low-end, where you’re just making clothes for the masses and it’s all about the average and not about the specific, yes, you can survive long distances. But to the extent that you want to do something that is going to resonate on a global scale and compete with the best jeans or shoes in the world, you better have manufacturing and design close together.
BoF: It raises an interesting question, one which you alluded to earlier. Anybody can start a fashion business today. There are 300 shows during fashion week here in New York. There is a glut of product out there. I was just taking a walk around the Theory showroom and looking at the way the brand has changed. You still do basics, but there is a fashion edge now too. Did you decide to inject a fashion point of view into Theory in order to stand out from all the ‘me too’ contemporary brands that have appeared?
AR: When I started Theory back in 1997, the level of competition in the contemporary market was different. The contemporary sector was in its infancy and we, along with a few other companies, pioneered that business.
I have always believed that when a company has been around for five or six or seven years, they carry with them a lot of heritage. There is stuff which is good, but also some [stuff] which is not so good. Consumers’ taste evolves; fashion evolves; patterns of shopping evolve. New companies come in which have no baggage, no heritage and they can react to the marketplace at that moment.
I think that if companies don’t evolve, they end up growing old with their customers and as the world’s fashion tastes and consumers are moving so quickly today, companies have to be very quick to evolve. I felt that it was necessary for Theory to evolve and to play on a global stage at the forefront of contemporary fashion. I realised that I needed to change my methodology and some of my thought processes of how to do business. I wanted to have a global design visionary come in and work with our company and I think it’s been really exciting.
BoF: Yes, and you can see the results. Was this direction partially influenced by the work you had begun doing with other designers? You have a portfolio of investments in a number of emerging brands. How did that first come about?
AR: It goes back to my philosophy that companies have to continue to evolve. I was fortunate enough to have the opportunity to meet and to invest in lots of these companies. I like to invest in companies, but not as start-ups. Generally, what I like to do is get involved in companies that do a million or two million in sales and have some sort of point of view about their aesthetic and their clothes. This way, you can have a little bit of an insight into what you are getting before you get too deeply involved.
That’s how I got involved in Alice + Olivia and Rag & Bone. And that’s how I got involved in Proenza Schouler, although Proenza was further along than the other two. It’s inspiring to work with these designers. They all have completely different aesthetics. They all have their own culture and I’m able to work with them on developing that. I learn a lot from them, as I am sure they learn from me.
I very much want to keep pace at the forefront of the industry. I think you have to have influences from different places and that’s still why I love working at Uniqlo with Mr Yanai [founder and president of Fast Retailing, who owns Uniqlo] and with Theory. I learn a lot. So for me, all of this is about being able to understand different points of view and being able to learn.
BoF: Who’s the latest young designer that’s got you really excited?
AR: I like all the ones that I am working with. But my son has actually started a business with a woman out of London, which I am now involved with. It’s called Les Chiffoniers.
BoF: And why did that brand strike your interest?
AR: If I told you what it was, there wouldn’t be anything special to it! I just think that sometimes I look at clothes and I meet with people and discuss their concepts with them and I see way more than what exists now. I see the possibility of what can be. I have a unique perspective, because I am involved in so many different companies, from the mass level, like Uniqlo, to the designer level, like Proenza Schouler, and a lot in between. So I can have a perspective on the market that is very broad and democratic and I can understand where the voids are, where the opportunities are. I think that’s something I learnt from my Dad: to be able to assess where the points of opportunity are.
BoF: So it’s an instinct thing?
AR: Definitely. I don’t even look at business plans. I understand them, but it would mean nothing. Business plans for companies at the stage that I work with [are] meaningless. It’s all about the integrity of the designer and their clothing and where they can position themselves in the market to break through.
I suppose that over the years I’ve spent my whole life working in the industry, not sitting at my desk and being the big CEO, but really working with designers and manufacturers, factories and sales people, so I have a feeling for what can work and what can’t and where to get it made and what price it should be and who should buy it.
It’s totally instinct.
BoF: There are hundreds of young designers here in New York, and all over the world, that would love to have someone like you involved in their business. It’s not just the money, but also the fact you have all this experience and there is so much more you bring to the table as an investor than just cash.
AR: Everyone has money. Money is not everything.
BoF: Indeed. So, if you are starting your own fashion business today, in 2012, what does it take to be successful? What advice would you offer?
AR: Well, I think the first thing is that, if I was a young person out of design school, I wouldn’t start my own business. I would go and work for somebody. I would get some experience. The industry is way too tough today to learn on the job and I think that the idea of getting some experience with a company and a designer that you have respect for and that matches your aesthetic is a great thing. I think that the three or four or five years you spend doing that is just like going to graduate school. The learning curve is so immense…. There have been designers that have done it straight out of school, Alexander Wang is a good example, but that is the exception.
BoF: … and the Proenza boys?
AR: They’ve been around for ten years. On one hand they have broken through in terms of the respect of the fashion community for the integrity and viability of their designs, but I think from a business point of view, they are on the verge of really breaking through. And remember, without the business component to it, there’s only so long you can sustain…. You have to be able to have a successful business model to be able to create the art and fashion that you want to create.
I think Alexander Wang is the one that really took off and has built a very successful business in a very short period of time. Alex is unusual in a lot of respects, talent being one of them. He has a lot of talent in a lot of different areas.
BoF: So after getting some experience in a big company, then what?
AR: If you’re going to start a business, and again this is just my opinion, you have to start a business in a single category. You can’t start a business as a whole collection of clothes. It is too difficult to coordinate the timing of everything.
Look at all the great fashion companies. Prada didn’t start as the Prada we know today. Prada started making accessories out of nylon. Gucci, Hermès, none of them started like they are today. They all started with a focused point of view. Theory didn’t start as Theory is today. And Rag & Bone didn’t start as Rag & Bone is today. Look at Lululemon, [the founder of which] I met early on, who started in Vancouver with a single idea. I guess I’m just saying that as a designer, I think you have to have a very singular focus. You can’t start with a whole collection of clothes.
I also don’t see [emerging] designers having their own retail stores. It takes too much capital and is almost impossible. But starting with wholesale is also extremely difficult today, as the stores aren’t taking the risk to invest in young designers. There are only a few stores that are doing that.
You have to do one category that you do better than everyone else. If you do it better than everyone else, then you get a lot of recognition and authority and credibility.
My philosophy with Theory, when I started, was that I wanted to make pants and shirts out of fabric with Lycra. I believed that fabric with Lycra was going to be the next generation of how clothing was made. With Lycra, the rises could be shorter, the shapes of shirts could be totally redefined and a woman could look incredibly sexy and feel incredibly comfortable.
That was the way I started and built all of this. I had to find a way to pay the rent and raise the kids!
CEO Talk is BoF’s forum for in-depth discussions with the fashion industry’s global decision makers, conducted by founder and editor-in-chief Imran Amed.