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BoF Exclusive | David Neville to Exit Rag & Bone

BoF has learned that co-chief executive officer David Neville will step down from his day-to-day role at Rag & Bone, while remaining a ‘significant’ shareholder and board member. Marcus Wainwright will become the company’s sole CEO.
David Neville (left) and Marcus Wainwright (right) | Source: BFA
  • Lauren Sherman

NEW YORK, United States — "Ten years ago in June, I turned 30, got married and Andrew [Rosen] became our partner, all in one week," Rag & Bone's David Neville recently recalled. "When we came back from my wedding, we got our first office."

Now, just in time for his 40th birthday, Neville wants to try something new. The executive is relinquishing his day-to-day responsibilities at the 14-year-old brand in order to pursue other projects. Neville will keep his seat on the company’s board of directors and remain one of the largest shareholders in the business, which is projected to generate more than $300 million in revenue in 2016, according to market sources.

Marcus Wainwright, Neville’s longtime business partner and former British boarding school mate, will become Rag & Bone’s sole chief executive officer. (The duo have been co-CEOs since the middle of 2015, when former chief executive Mike Tucci exited the company.)

“We’ve known each other since we were kids,” Neville said of his partnership with Wainwright. The two have long shared an office, where they sit at side-by-side desks. “To be able to build a brand from nothing showed an awful lot of determination, ambition, grit and trust in one another to make it happen. I think that people could always see that Marcus and I were very committed and dedicated to what we wanted to achieve.”

The shift comes as Rag & Bone, which employs about 300 people, is entering a new stage of growth, with increased focus on the direct-to-consumer portion of the business. Overall sales are up 20 percent year over year for 2016, with a double-digit increase in sales at stores open at least one year. The brand’s directly owned retail stores will generate about $100 million in sales this year.

Rag & Bone opened its first store on Christopher Street in New York in 2008, just two years after Rosen — who is also the chief executive of Theory and has personal investments in several New York-based brands — came on as a partner. “We sort of jumped off the deep end… but it was the right thing to do given our aspirations,” Neville said. “We’ve created a retail proposition that’s extremely productive. If you look at the penetration in our stores, it’s very nicely spread between shoes, denim, women’s ready-to-wear and men’s. It also helps with customer experience. When they see it all together, they can really get a sense of the aesthetics of Rag & Bone.”

We've built a team that can really run the business side of the business.

Wainwright credits the label’s retail success to the duo’s unwavering dedication to create a fully realised brand. “Other companies are finding it hard to go direct-to-consumer because it’s expensive. It’s not cheap to open a store,” he said. “It has become increasingly easy to lose people when they know everything instantly, so the stories you tell and the brand that you build are the key. That fine line between not being too precious, but also not overcooking it; that is the holy grail.”

Today, there are 22 Rag & Bone stores in the United States, including a Madison Avenue location set to open next week. Internationally, there is a single store in London — with two more tentatively planned to open by the end of this year — as well franchise stores in Taiwan, Hong Kong, Japan, UAE, Lebanon and Thailand, where there are two locations. (Additionally, there are six Rag & Bone off-price outlet stores in the US.)

The company’s investments in direct-to-consumer retail have made Rag & Bone less reliant on the struggling wholesale market. “Our goal is to shift the paradigm more to direct-to-consumer,” Neville said. “We’ve got to try to get it to parity first, while maintaining our relationships in wholesale channels.”

To this aim, the duo have spent the last few years hiring a stable of senior managers that will now report directly to Wainwright, including chief marketing officer Johanna Murphy (previously vice president of e-commerce at Kate Spade & Co.), chief financial officer/chief operating officer Chris Vieth (who came from Maidenform) and, mostly recently, chief commercial officer Lydia Forstmann (a veteran of Tory Burch and Coach).

“Prior to that, we didn’t really have a lot of seasoned people,” Wainwright said. “For the past two or three years, we’ve been focused on adding a layer of, not sort of senior-corporate types by any means, but a layer of experienced management that would give us and David the flexibility to diversify.”

Wainwright will continue to run the creative side of the business, including design and marketing. “For the longest time, we’ve been talking about the balance between art and commerce, and our roles really reflect that balance,” he said. “My job working on the design and marketing aspect of things, that [part] won’t change at all. We’ve built a team that can really run the business side of the business. But I’m sure [my role] will change in many ways.”

To be able to build a brand from nothing showed an awful lot of determination, ambition, grit and trust in one another.

Brand storytelling may remain at the heart of Wainwright’s position, but he’ll also be focused on expanding the company’s retail footprint — particularly abroad. While the label is currently sold in 53 countries worldwide, international sales only make up 20 percent of the business.

“Ten years ago, we were trying to sell to everyone. Andrew said, ‘Stop doing that. Just focus on America and New York. If you can’t make it work here, it’s going to be very, very tough to make it work internationally,’” Wainwright explained. “So we built the domestic infrastructure, which has really enabled us to grow and continue to add categories in order to be a diverse — and therefore quite stable — business.” Today, the brand’s Sloane Street store in London is among its top-performing doors, which helps to explain the company’s plan to open two more locations in the city by the end of 2016. The company currently operates an office in the United Kingdom, where about 15 employees are based.

Expanding the brand’s presence in leather goods is another key focus. “Bags are probably the biggest opportunity for us,” Wainwright said. “Everything else we’ve grown very organically, shoes included, which is a difficult category to figure out. But once we did, it was really quite explosive. Our challenge was actually in controlling that growth more than anything else.”

To be sure, Wainwright and Neville’s partnership with Rosen has played a key role in the development of the company. “I remember when they came to see me the first time,” said Rosen. “They didn’t have an office. They didn’t have an employee. Nothing. To put this kind of company together in 10 years, to have that kind of success? These guys have built an incredible, powerful voice in this space. I am so proud.”

Rosen's mentorship may even have inspired Neville's move. Along with supporting his wife, makeup artist Gucci Westman, in the launch of her own beauty and skincare brand, Neville also plans to scout emerging labels. "I'm looking at investing in some fashion brands in the same way Andrew did with us all those years ago," he said. "I really enjoy the work that we do with the CFDA/Vogue Fashion Fund. I find it exciting to go in and talk to some of these young brands about where they are and what they're trying to achieve. I would love be able to give them some guidance the same way Andrew did with us back in 2006."

As for who might take the open desk in Wainwright’s office? The newly appointed top boss joked that Rosen and Neville can now share it.

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