The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — Rag & Bone chief executive Marcus Wainwright, who founded the New York-based label in 2002, was for a long time viewed as the quieter, more serious foil to his former business partner David Neville's upbeat charm. Sitting at a pair of well-worn desks in their industrial, bare-brick Meatpacking District offices, they divided responsibilities by their natural inclinations. Wainwright focused on design, marketing and production, while Neville took on the finances: operations, partnerships with retailers, paying the bills.
Physical proximity allowed them keep tabs on each other and the business as a whole. The setup suited them for nearly 15 years. (For a short time starting in 2013, retail veteran Mike Tucci served as managing partner, but Wainwright and Neville were back in the driver’s seat, becoming co-CEOs, in less than two years.)
Over the summer of 2016, Neville’s itchy feet — a desire to advise and invest in startups full time — got the better of him, however, and Wainwright took over as Rag & Bone’s sole chief executive. Today, the 42-year-old sits at a single desk, framed by a high shelf lined with photographs, print campaigns and other ephemera that document the story of Rag & Bone, a brand as deeply rooted in Wainwright’s upper class British background as his life in New York and his personal connection to America’s shrinking manufacturing base.
Sitting in a lounge area that looks out through steel casement windows onto an open space filled with desks occupied by Rag & Bone’s more than 300 employees, Wainwright seems unphased by the shift. “I’ve always been the co-CEO, essentially,” he says, with a matter-of-fact-tone, a sense of authority that indicates he was, and is, the only person for the job.
The brand says it’s bucking a slew of industry trends: it’s performing at wholesale, it’s winning in multiple categories and, most importantly, it’s on a track to drive continued growth. While its own stores and franchise deals are an increasingly significant portion of the business — wholesale currently makes up 65 percent of retail sales — there are no plans to flee department stores. Incidentally, the brand also has no plans to follow the trend towards fashion immediacy.
Wainwright is full of opinions on the state of fashion today and his skepticism for “see now, buy now” shows is impossible to mask. “I don’t really, personally believe in ‘show now, buy now.’ To do it the way people are currently doing it means that you have to buy up front. And then show it and sell. I think that takes some of the freedom of the creativity out,” he says. “And what you have to buy becomes the safest stuff. And while the customers might want something instantly, that doesn’t meant they should get it. There is a reason you have to wait for a table in a great restaurant, a new Ferrari. There’s a reason you can’t just walk in and buy an iPhone when it launches. There is a functional reason — good quality takes a long time to make.”
It doesn't feel culturally or ethically right anymore. To be honest, I don't know if I will do a show ever again.
In fact, this New York Fashion Week, Wainwright is eschewing a runway show altogether, throwing a party on Thursday night in celebration not only of the Autumn/Winter Fall 2017 collection, but of the company’s 15th anniversary and an accompanying exhibition (which will be open to the public February 10th-12th).
The executive made the decision not to show soon after the US presidential election in November, when most designers — many of whom were shell-shocked by the results — were in the midst of building their next collections.
“My opinion on the importance of fashion shows has changed drastically in terms of the format, the timing and the rules that I assumed were rules. They are not rules. And learning from Donald Trump, there are no rules,” Wainwright says. “What is the best way to put it out there? I don’t even know if we should show at all. The notion of what a fashion company is has changed… A lot of people assume they need to do this or that. And they don’t,” he continues. “I don’t think it speaks to consumers anymore. It doesn’t feel culturally or ethically right anymore. To be honest, I don’t know if I will do a show ever again.”
However things net out, it’s clear that Wainwright is in brand-standing mode, working to reinforce Rag & Bone’s message like the stitching on the back pocket of a pair of jeans. A new short, filmed at the company’s manufacturing facilities in Sunset Park, Brooklyn — where a custom-fabrication team builds everything from office furniture, in-store cash wraps and shelving to money clips, coasters and bottle openers — depicts Wainwright in a dad-friendly zip-up pullover knit worn over his standard uniform of a t-shirt, jeans and trainers (all his own designs).
The promo emphasises attention to detail, quality and above all, integrity of the clothes Rag & Bone sells, with inspiration coming from Savile Row as well as the American factories where Wainwright first sourced his denim. Its visual signature is part Americana, part British heritage, part youth sport, whipped into modern tailored blazers, sleek trainers and jeans. Lots of them. There's nothing stuffy about Rag & Bone, but it's not loose either. There are expectations of what the brand will deliver.
“My utopia is to walk into a Rag & Bone store and to be completely satisfied with every single piece of product in there,” he says. “That is impossible. I have a very critical brain, which is my cross to bear. But what I believe is that what really makes something perfect is not the design, per se. It’s the integrity with which it was designed and made.”
But while perfection may be elusive, it remains his goal. Wainwright, a photography nerd, pulls out a military-green Leica M camera that just arrived at the office. It’s digital, but looks markedly similar to the 1958 version of the company’s iconic rangefinder.
“This is an example I use all the time. Leica is the personification of the pursuit of perfection through simplicity and quality and craftsmanship,” he says. “It’s not about design — in the fashion industry there is this philosophy that everything has to change all the time, as opposed to everything being slow and effective. This camera has not changed since it was launched. It’s the same camera.”
For Wainwright and Rag & Bone, getting things right means being attentive to craft and quality. From the beginning, he was interested in making clothes in US factories, starting in Kentucky with Kentucky Apparel and moving to North Carolina with Taylor Togs. Both of those facilities have since shut down, although Wainwright did his part to sustain them, scrambling to find other designers willing to make jeans there.
Now, Rag & Bone denim is made in Los Angeles, with certain ready-to-wear items produced in New York City’s Garment District. At the same time, Wainwright is realistic about how far local production can take a brand. As the new administration continues to push for the reshoring of manufacturing — and Congress aims to deploy a so-called “border adjustment tax” that could cripple brands selling items made abroad — the question of whether or not brands can or should be “Made in America” has become deeply polarising in a matter of months.
I think the biggest problem in this business is when we deliver clothes... Delivering winter clothes in July is just stupid.
“I think it’s going to be hard to bring significant clothing manufacturing back into America. Those girls from Kentucky — they’ve moved on. That was ten years ago. North Carolina, the factory closed and there is no one training,” he says. “It’s a complicated issue and it’s obviously a very sensitive moment for that. I want to tell people how much we make in America. But at the same time, I’m afraid of offending people, that [we think] somehow products from other countries are no good. I would hope that whatever decisions are made, they take into account businesses that survive based on being able to make stuff in... Mexico. Penalising companies that have been in some extent forced to make things abroad is going to be difficult.”
Rag & Bone, like many of its mid-priced competitors, cannot afford to manufacture everything in the US and Wainwright is working out how to reconcile the values of his brand with the demands of the market. With the majority of Rag & Bone’s revenue tied up in wholesale, he must play nice with his retail partners without losing sight of his vision.
It's a difficult task, especially as consumers flee department stores and other multi-brand retailers for direct retail. In 2013, Rag & Bone took on a minority investment from mid-market private equity firm Irving Place Capital in order to expand its store footprint and ramp up its e-commerce. (Theory chief executive Andrew Rosen was an early investor and remains a top advisor.)
Today, the company operates 24 of its own stores in the US and two in London — a third London store is set to open on Beak Street in April 2017 — as well as franchised stores in Japan, Hong Kong, Taiwan, Thailand (where there are two), Turkey and the United Arab Emirates. But after a rapid rollout, Wainwright has put the brakes on retail, focusing on increasing foot-traffic and sales at existing stores instead of pursuing further expansion.
“We have made some decisions based on profitability that haven’t been right. They actually end up negatively impacting the profitability because you begin to focus on that instead of the product and the customer,” Wainwright says. “I really believe that my job as CEO is to build an organisation that works like a clock.”
Part of the company’s new approach has been to rethink the cadence at which Wainwright designs: month-by-month, rather than seasonally. “I think the biggest problem in this business is when we deliver clothes, seasonally. Delivering winter clothes in July is just stupid. In January, you get spring. There are a lot of people out there with spring products, but it snowed yesterday in New York,” he says. “We design it to months. Because otherwise you just get caught up in this fashion system that doesn’t really actually work.”
He is also, unlike many of his peers, not giving up on wholesale. "We obviously have a huge drive to build our direct-to-consumer business — not to shrink our wholesale business, but to maintain our wholesale business and give them everything they need because that is very important to us," he says. "In 2008, when the world fell apart, and people began to be conscious about overt spending and overt branding, and labels for the sake of labels, we had a very high quality product that wasn't designed at a price point for the sake of being designer. It was the price point it needed to be based on the expense of the fabric and where it was made. We got a lot of loyalty from that period of time."
According to some of Rag & Bone's retail partners, that loyalty remains. Peter Nordstrom, co-president of Nordstrom, Inc., says the brand remains one of the Seattle-based department store chain's top vendors. "You've got to have authenticity," he says. "The customer can sense when something doesn't feel authentic or relevant. Marcus has a big job, but you get the sense that everything passes through his filter. I think it's critically important."
Joshua Schulman, president of Neiman Marcus-owned luxury department store Bergdorf Goodman, believes that Wainwright's commitment to getting every product category right — whether it's outerwear or women's shoes — has afforded the label sustained relevance. "The contemporary business by nature is a fast business — you have brands emerging, brands declining. We're always chasing the next brand. For over a decade, Rag & Bone has been very consistently growing," he says. "As they built the business, they approached it both as designers first and foremost but also as merchants. They enter categories with real product authority."
I really believe that the money will come if that is what we want, but it cannot be the focus. That kills the vibe.
Wainwright declined to disclose revenue numbers, but market sources estimate that annual sales at Rag & Bone are currently north of $300 million, with growth in both 2015 and 2016, and future growth projected for 2017. “It’s really fucking difficult out there, to be frank. But touch wood, we are a growing business,” Wainwright says. “Like most people, I’m spending a lot of time soul searching and trying to understand what decisions we need to make for the next five-to-ten years. What I see now is that exponential pace of growth and change.”
Just how fast that change will come and what it will bring however, is hard to know. Wainwright is zeroing in on what he can indeed control: quality and intention. While the business is 75 percent women’s, 25 percent men’s, its success in entering new categories, such as shoes, suggests that there is room for more breadth. Given that the company is already making custom furniture in Brooklyn, expansion into home goods — if executed properly and with the right partners — could be a natural fit for the brand. He also sees potential to grow internationally — which currently makes up just 20 percent of the business — and online.
“Why can we not double the size of our international business and build our e-commerce 10 times as big as it currently is? But the most important thing to me is that we focus on what we stand for. We can’t predict the future,” he says. “What we can control is how we do what we do, and we can control the quality of the product, and we can control where we make stuff, and we can control the inevitable pressures to make things faster and cheaper. We can resist that if we really believe that people will always want great quality stuff. It is really important we remain focused on what we do, and not panic.”
What Wainwright’s determination indicates is a great ambition, not only to do well by his investors, but also to build something that will last — and build something big. As the retail world becomes more and more fragmented, the idea that there will be another billion-dollar fashion brand — a household name — seems less likely. And yet that is exactly what Wainwright is aiming for.
“I think you are making that assumption based on the set of rules, that designer brands follow a certain path. A brand has one store and suddenly it has 150 stores — it opens 200 stores in China. Loads of stores around the world. Multiple layers in product lines, some in flagship, some in Macy’s, some in airports. That’s the model and has been the model. But that’s the past. It doesn’t exist anymore,” he posits. “That doesn’t mean there isn’t a new paradigm creating itself.”
“My vision for Rag & Bone is to stay completely true as a company. I really believe that the money will come if that is what we want, but it cannot be the focus. That kills the vibe. And I learned that, to be honest, the hard way.”