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 — The latest chapter in Mark Cross's long history didn't start in Boston, where the leather brand was founded as a saddlery in 1845, or in the French Riviera, where later owners Gerald and Sara Murphy inspired F. Scott Fitzgerald's "Tender Is the Night" in the 1920s, or even in Hollywood, where Grace Kelly carried Mark Cross on screen in the 1954 film "Rear Window." It started in Boca Raton, Florida, in the summer of 2003, when New York retailer Neal J. Fox decided to pay a visit to a former luggage executive named J.P. Wilkin Jr.
Wilkin Jr had acquired the trademark to the once illustrious leather goods brand Mark Cross quite opportunistically: four years after the Sara Lee Corporation, which bought Mark Cross for $7.5 million in 1993, shut the struggling company down in 1997 to focus on its other American leather brand, Coach, Wilkin Jr started using the Mark Cross name — on stationery, on email, when introducing himself as its president — prompting Sara Lee to sue him. Citing abandonment, Wilkin Jr won the name.
It was an unlikely outcome for a historic brand that once boasted stores around the country and a flagship on Fifth Avenue, back when Hermès still only had a shop-in-shop inside the landmark New York City department store Bonwit Teller. Fox saw the story in the press and went to go see Wilkin Jr in Florida to try to buy the trademark himself. According to Fox's retelling of his involvement with the brand, the former luggage executive didn’t want to sell.
Nevertheless, Fox and Wilkin Jr developed a friendly relationship over the next five years, during which there wasn’t much activity around the brand. It finally debuted on QVC in 2008 with bags in the $200 to $300 range, but the effort was short-lived. “I told him from the time that I met him that he was wrong, but it took a while to get the message,” Fox told BoF.
Fox had ambitious dreams for Mark Cross, as well as memories and the kind of deep retail experience that enabled him to make a go of it. He started his career at Brooks Brothers in 1956 and later took senior leadership or chief executive roles at Neiman Marcus, Bergdorf Goodman, I. Magnin and several other upscale department stores. The Washington Post once described him as “brash.”
"[Mark Cross] was, in effect, America's Hermès, America's Vuitton and America's Gucci all rolled into one," said Fox. And it was unsullied, unlike other American classics such as Halston. "I don't know that I would have felt the same emotionally about the brand if it had been beaten to death," he said. When Fox said Wilkin Jr finally agreed to let him license the name to produce a line of bags, he decided to take a gamble.
"I looked at the market at that juncture and said, 'Well, we don't have the wherewithal and the capacity to really take it where I thought it belonged, at the apex of the pyramid,'" said Fox. With financing from fashion executive Richard Bienen, who took a 50 percent stake in the company, Fox developed a line of bags priced between $500 and $900, and Ron Frasch, then president of Saks Fifth Avenue, agreed to carry the line of boxy leather bags at 18 store locations. Fox manufactured it at Chinese factories with Italian leather. "We started with a sensible, affordable luxury," he said.
Mark Cross relaunched for the first time in the spring of 2010, as the US economy was still grappling with the recession, and it didn’t resonate the way Fox hoped. “As a retailer, I was unhappy,” he said. “Saks was okay.” The problem, as he saw it, was that Mark Cross was not expensive enough to be on the ground floor at the Fifth Avenue flagship, which accounted for almost a third of Saks Fifth Avenue’s business at the time.
Unsatisfied with the brand’s performance, Fox decided the following year to send his design team to the very same factories that produced Mark Cross bags 35 years ago in Italy. He was thrilled with the samples they brought back — at the kind of luxury level he had always thought the brand should be positioned — and decided to aggressively pursue the new strategy. “I wanted to compete with all the big guys out there,” he explained. “At the end of the day, I got lucky. I had a strong feeling that there was longevity inherent in this concept, as more and more consumers focused on their accessories at the expense of what they put on their backs.” In its new iteration, each Mark Cross bag cost around $2500.
The consumer is up to here with LV's and C's and G's. They are very secure with themselves and they love our brand because it's not identifiable.
While most of the department stores, Saks Fifth Avenue included, were cool on the idea, Fox said Mark Lee and Daniella Vitale of Barneys jumped at the chance to carry the new higher price line exclusively at all nine of their stores.
“I personally had always loved the Mark Cross brand — I think it’s one of the only true American luxury brands,” said Lee, who stepped down from his role as chief executive of Barneys in February. “It was a great fit.”
Barneys also provided Mark Cross with a high enough volume of orders for Fox to meet the necessary production minimums. “I couldn't have gotten the thing off the ground at that stage the game [otherwise],” said Fox. He terminated the relationship with Saks Fifth Avenue, held the 2011 holiday shipments and delivered the new and upscale Mark Cross to Barneys the following spring.
That same year, Wilkin Jr passed away after an illness and Fox gained full control of the Mark Cross trademark. Meanwhile Fox's wife Martha Kramer, who had previously led Emanuel Ungaro's North American business, joined the brand to focus on marketing. (She is now its senior vice president.)
On the floor alongside luxury handbags, the new Mark Cross struck a chord with post-recession consumers looking for cleaner and more understated accessories. In the contemporary market, Mansur Gavriel tapped into the same desire with its signature bucket bags when it launched in 2013.
And to Fox's surprise, his consumer was much younger than he had anticipated: no actual nostalgia was required for millennial shoppers looking for a timeless, vintage-feeling luxury handbag. The brand's boxy Grace style quickly became ubiquitous outside international fashion weeks, and popped up on the shoulders of Rihanna, Jessica Biel and Lady Gaga, among other celebrities, despite the company's no-gifting policy. (The brand has since leaned into its street style affinity, later collaborating with it-girls Harley Viera Newton and Chelsea Leyland.)
“Initially it was about the product,” said Fox. “[The consumer is] up to here with LV’s and C’s and G’s… They are very secure with themselves and they love our brand because it’s not identifiable.”
With domestic sales locked down at Barneys, where the brand was exclusive through 2015, Fox pushed for international accounts like Harrods and MatchesFashion. Now only 30 percent of the Mark Cross’s sales are in the US, where Forty Five Ten and Kirna Zabete are among its retailers.
Fox declined to share sales revenue figures but said the business doubled in 2015 and grew 75 percent in 2016, and he expects it to remain up by double digits in 2017. “When you don’t market, at some moment, we're going to hit a wall,” said Fox about the deceleration. “I predicted this two years ago… we're about ready to hit a wall if we don't do something to really force the issue.”
To fuel future growth, Mark Cross will spend money on marketing for the first time this autumn. Fox also wants to offer more bags at a slightly lower price. "I don't have what I categorise as a locomotive like Saint Laurent does at $995 with the tote, I wish I did." Perhaps something along the lines of a Goyard canvas tote or a Valextra Super Bag, but in the meantime a $1195 tote plays that role.
Fox is also expanding categories, not just travel, introduced in 2015, and a relaunched men’s line debuting this month. (Fox retired an earlier men’s iteration in 2013 and 2014 because he “wasn’t happy with it.”) He wants to explore the categories that “keep Hermès alive” — scarves and jewelry under $1000.
But before that expansion, Mark Cross needs its own retail channels, said Fox, who knows the brand can’t rely on wholesale in today’s retail market. “Everyone talks about the growth of the digital but growth of digital on a luxury level is a lot more limited than the growth collectively, and with a brand like ours that's still relatively quiet in terms of its global equity… I think that vertical retail is going to play a dominant role in the growth of our business,” he said. The short-term strategy is to build a foundation of flagship stores in major cities across the country in tandem with a “very focused attack on the digital world.” Right now, Mark Cross’s web business is marginal. “I’m at the starting gate with all the other luxury brands,” said Fox about e-commerce. “So I don't feel as if I'm that far behind.”
To implement this plan — “vertical retail is very capital intensive” — Fox recently took on outside investment at the end of 2015 that saw Bienen's shares bought out. (Fox declined to name the investor or the new ownership structure.)
And not coincidentally, Fox also recently took a fresh look at a “hit list” of dormant American brands, ripe for a comeback, that he compiled years ago. “Some of them are gone but there’s still a few around that are worth looking at," he said. Can the Mark Cross recipe work for another American heritage brand?