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Christopher Kane, 3.1 Phillip Lim, Erdem & Roksanda on Turning 10 Years Old

A decade after they launched, Christopher Kane, 3.1 Phillip Lim, Erdem and Roksanda have emerged as five of the world's most promising young fashion businesses. What are their strategies for the future?
Erdem Moralıoğlu, Christopher Kane, Phillip Lim and Roksanda Ilincic | Source: Courtesy
By
  • Kate Abnett

Christopher Kane: Creativity First

Christopher Kane Spring/Summer 2016 | Source: InDigital Christopher Kane Spring/Summer 2016 | Source: InDigital

Christopher Kane Spring/Summer 2016 | Source: InDigital

LONDON, United Kingdom — From neon bondage dresses to gel-filled plastic clutch bags, Christopher Kane has built a business by making the bizarre desirable. Kane has sold offbeat creativity on a global scale — stores in London, Japan and LA picked up his graduate collection — and, by forging his zany designs in gorgeous quality (Swiss lace; Scottish cashmere), he's sold it to a luxury client.

“I think we forget with designers that it's not their job to be led by the market, it's their job to say: ‘I know you don't think you're going to wear this, but you are,’” says Sarah Crook, chief executive of Christopher Kane.

For four years, Kane and his sister Tammy stocked some of the world’s most distinguished luxury stores from a bedroom in East London. Funding came from prizes like the 2011 BFC/Vogue Fashion Fund, but, by 2013, they were craving professional fashion expertise in order to channel their creativity into scalable commercial success. “We were at breaking point and we really needed investment to move forward,” recalls Kane.

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Right on time, luxury conglomerate Kering took a majority stake in the business. In the two years since, Christopher Kane has launched bags, shoes and sunglasses (all made in-house though Kering), unveiled its first website, opened a flagship on London’s Mount Street, and hired Crook as chief executive. “My job is to get the best creative director, for him to be free, to be creative. His role is not to run the business,” she says.

Currently, ready-to-wear makes up 85 percent of sales, but Crook wants to shift that percentage to favour accessories. To this end, e-commerce and the label’s first advertising campaign will launch next year. “When you're building accessories you really need that image,” says Kane.

Retail will be the “big shift” for the business over the next decade, though a second store opening "won't be for two years or so," says Crook. Meanwhile wholesale — currently 160 doors — will focus on the US and Asia, as the market matures. “It used to be about the super brands, but they want creativity, they want point of difference, and that's a really strong opportunity for us,” says Crook.

It’s the time-honoured tale of young-brand-meets-big-conglomerate. However, a break with tradition is on the way: “I am doing something different in the structure of how we go to market with product. The timing, what kind of product we go to market with, absolutely is going to evolve,” she hints. “The industry can't sustain consistently shipping summer in winter and winter in summer."

Phillip Lim: Designer Value

3.1 Phillip Lim Spring/Summer 2016 | Source: 3.1 Phillip Lim 3.1 Phillip Lim Spring/Summer 2016 | Source: 3.1 Phillip Lim

3.1 Phillip Lim Spring/Summer 2016 | Source: 3.1 Phillip Lim

NEW YORK, United States — In the course of an hour, Phillip Lim describes his business as a "love story," a "self-fulfilling prophecy" and like Bobby Brady from the Brady Brunch. It has, he says, "the challenger spirit."

But behind his metaphors and mantras, the designer is crystal clear on what makes 3.1 Phillip Lim work: the price point.

"It's actually been everything," he says. "We've been able to create the marketplace that we're in right now." The brand, which Lim and chief executive Wen Zhou launched in 2005, filled a gap in the market for chic day-to-night womenswear, with a designer quality and aesthetic, at prices "we can all afford and still pay rent," says Zhou.

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This positioning saw the business sail through the recession, with sales growing at least 10 percent year-on-year. “Phillip Lim is the type of brand that grows when the economy is not as strong,” she adds. “People look for value.”

To achieve this price point, Lim and Zhou — who are both of Chinese descent — challenged the notion that modern luxury fashion couldn't be 'Made in China.' "I never believed that China is only one factory that is thousands of humans and cheaply-made copies. There are so many artisanal factories," said Zhou, who founded her own fabric-sourcing firm at 21.

Now, with revenues of $80 million, according to market sources; 450 points of sale; 15 own-label stores and categories including menswear, childrenswear, leather goods and footwear, where will 3.1 Phillip Lim go next?

“I think that the next stage may be fragrance,” says Lim, but declined to specify a timeframe. “Parts of the business have not been maximised yet,” he added. Currently, less than 30 percent of the brand’s stockists carry its menswear. “That number is insignificant of what the future may hold. We haven’t even opened the merchandising — that’s when the floodgates are lifted.” Footwear is another priority, having grown over 300 percent in the last three years.

New stores will be concentrated in the US and Europe (most are currently in Asia) and the business just signed a franchise partner for retail in the Middle East. “We’re barely starting out on [direct retail] and that’s a huge area for growth,” says Lim. Indeed, direct retail currently makes up only 10 to 15 percent of the business, though Zhou adds, “It’s not in the brand strategy to open ‘x’ amount of stores in ‘x’ amount of years.”

“Not having that constant pressure of growing ‘x’ amount allows you to go forwards — or backwards — for the greater health of the brand,” adds Zhou, who only plans the privately-owned company’s strategy one year at a time. “We don’t do things for the sake of quick return.”

Erdem Moralıoğlu: Slow and Steady

Erdem Spring/Summer 2016 | Source: Erdem Erdem Spring/Summer 2016 | Source: Erdem

Erdem Spring/Summer 2016 | Source: Erdem

LONDON, United Kingdom — Despite the floral prints, embroidery and fine fabrics, Erdem Moralıoğlu operates a "no frills" kind of business.

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In ten years, Moralıoğlu hasn't really changed what he does. That's not to say it's boring — it's just not conflicted. Erdem's womenswear, rooted in feminine floral dresses, is a romance that sells. This year, the company projects a turnover of £10 million (about $15.7 million). Since Moralıoğlu, a soft-spoken Canadian, launched the brand in London in 2005, it has grown an average of 40 percent year-on-year and, for the last six years, yielded "significant profit" — enough to open a new store in London without external investment. Those under Erdem's spell include Anna Wintour, Marion Cotillard and Keira Knightly.

“The first big change to Erdem’s business was the decision to take wholesale in house from an agency, a gamble that paid off,” recalls Jennifer Baca, managing director of the brand, who joined as sales director in 2008, when there were only 10 employees. Also that year, Erdem launched pre-collections, which remain a key growth engine. At the time of writing, Resort orders are up 28 percent on last year.

Erdem’s growth has been incremental, cultivated with the patience one would expect from the figure behind such intricately-wrought clothes. “It was a very controlled growth,” says Moralıoğlu. “I understood five years ago that I would eventually open up a store, but I wanted to be able to do it independently. Five years ago, I wouldn’t have had those resources. Now I do."

In August, adding to its 180 wholesale doors, Erdem quietly opened its first store on South Audley Street in London’s Mayfair. “Any success that I’ve had has been based on the fact that my business is totally wholesale. The next chapter will be how do we explore direct retail,” says the designer.

The US has always been the brand’s biggest market (though Europe is strengthening — stockists in Italy doubled from five to 10 last year), and within three years, a second store will open in the US. Baca also hopes that opening a shop in a tourist-heavy area of London will have a knock-on effect on sales in Asia.

Erdem’s foray into directly-owned retail will serve as a “testing ground” for the company’s “ambitions in developing other categories,” says Baca. The first test is footwear, which the brand brought in-house this season. The second, leather bags, will launch in the next five years.

A signature style and a slow, steady growth. It may sound modest, but Moralıoğlu is laying strong foundations: “The ultimate thing would be to create something that can live on beyond the next 100 years. I think that’s the ultimate: the establishment of a house.”

Roksanda Ilincic: Woman to Woman

Roksanda Spring/Summer 2016 | Source: InDigital Roksanda Spring/Summer 2016 | Source: InDigital

Roksanda Spring/Summer 2016 | Source: InDigital

LONDON, United Kingdom — When fashion designers talk about "the woman" for whom they design, "she" is usually somebody else: most young designer businesses are helmed by men, while their female contemporaries often don the unofficial artistic uniform of head-to-toe black.

However, Roksanda Ilincic, a Serbian-born, ethereally beautiful mother of one, is rarely seen in clothing she did not design herself. "I respect that the clothes are there to be worn, not just there to be in museums or to be exciting the press," she says.

From one woman, to countless others. According to market sources, from 2009, the business’s revenues grew 40 percent year-on-year. By 2012, its dresses were selling out up to 80 times over at MatchesFashion.com. By 2013, the company was profitable.

Last year, Indian businesswoman Eiesha Bharti Pasricha took a minority-stake investment in Roksanda. “We suddenly had a much more aggressive plan put in place,” says Ilincic. In June 2014, Roksanda’s first store opened in London’s Mayfair; the team swelled from 20 to 50 people; and, in January, Carmela Acampora, previously chief operating officer at leather goods label Aspinal of London, joined as Roksanda’s first chief executive.

But it was still “all about the dresses,” says the designer. “When you’re a small brand, you don’t have the perfumes, you don’t have bags, you don’t have the other places that you can make the money from.”That is about to change. This season, Roksanda will launch jewellery, as well as a footwear collaboration with Tabitha Simmons. In the coming seasons, the company plans to unveil its first collection of leather bags.

“In the case of bags, we’re planning to develop quite a big range,” says Ilincic, who aims to grow handbags to 20 percent of overall sales. “We are starting something that is almost like a standalone business.” Jewellery will be a small range that moves “on it’s own speed,” outside of the seasonal calendar.

Wholesale still makes up 82 percent of the business, though half of all customers who come into the store make a purchase. “I haven’t seen those numbers before,” says Acampora, but declined to reveal current revenues. While a statement on Acampora’s appointment promised “a considerable retail growth strategy,” she confirms only that e-commerce will launch next year.

For now, Acampora’s focus is to grow Roksanda’s wholesale business — 55 percent of which is currently in the UK and US — to be more global, and increase pre-fall to 60 percent of overall sales, up from the current “unusual” 50/50 pre-fall/main-line split.

More global distribution, more product categories — and more funding. “There’s definitely going to be a need for another investment,” says Ilincic. “Five years, definitely no, but after that, yes.”

This article appears in BoF's third annual #BOF500 special print edition, celebrating the most influential people shaping the global fashion industry. To order copies for delivery anywhere in the world or locate a stockist, visit shop.businessoffashion.com.

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Cover of the BoF 500 ‘Reinvention’ special print edition

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