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Steven Alan, Multi-Tasking Merchant

Twenty years after opening his first store, Steven Alan, the merchant, showroom operator and designer, sat down with BoF to discuss how he built his multi-pronged business.
Steven Alan | Source: Courtesy
  • Lauren Sherman

NEW YORK, United States — "I had a desire to do a shop unlike any shop I had ever seen," says Steven Alan of opening his first store on Wooster Street, in New York's Soho, in 1994. Today, a slew of tightly edited multi-brand stores dot the city's retail landscape, from Opening Ceremony to the newly-opened Dover Street Market, not to mention Alan's own stores, which carry a curated selection of clothing, accessories, apothecary and homeware. But at the time — 20 years ago — Alan's idea of a multi-brand concept store stocking emerging designers was completely new. Parisian concept store Colette would not launch for another three years. And while young designers like Alexander McQueen and John Galliano were exciting London, little attention was being paid to New York's emerging fashion labels.

Born Steven Alan Grossman, the future entrepreneur first gravitated towards photography, landing small gigs by the time he was in high school. But retail was in his blood. Together, Alan’s father — a jewellery designer — and mother owned and operated a number of boutiques around Manhattan, where he was raised. By his early twenties, Alan was helping his parents run the family business and had launched a small operation of his own, dealing in vintage and collectible watches. But he was keen to take part in the burgeoning fashion scene happening downtown and launched his first store with the simple idea of showcasing the young designers who were then living and working in New York City. Built by Wendy, Sofia Coppola’s Milkfed, Cake and Rebecca Danenberg were amongst his first buys.

Alan’s emphasis on emerging talent — as well as his knack for merchandising product in a way that looked and felt more like a well-organised closet than a stuffy sales floor — earned him early traction. Then, in 1997, he opened a showroom to complement his retail business, representing brands including Bernadette Corporation and Wrangler. “Other store owners were coming into the shop and wanted to buy the things we had,” Alan explains. “They’d ask, ‘Where can I find this?’ And sometimes these stores were in the neighborhood — right across the street from me.” Simultaneously, designers began asking Alan if he would manage their wholesale accounts. “I loved discovering designers, I loved promoting them, so the logical transition was to represent them.” But it was a difficult business; and one that took years to turn a profit. “Retail is somewhat predictable. Christmas is busy, January is slow,” said Alan. The showroom business, on the other hand, presented serious cash flow challenges. Designers would often pay late — themselves waiting for retailers to pay them for their merchandise — while some of the more inexperienced upstarts failed to pay altogether.

Around the turn of the millennium, Alan added another pillar to the business: his own product, designed to dovetail, not compete, with the other merchandise he carried. He started with a simple button-down shirt for men, which he designed himself. In reaction to the blousy, unflattering styles of the day, it was slim and short enough to be worn untucked. A blazer and pair of trousers were next, followed by a women’s version of his now signature "Reverse Seam" button-down.

But it wasn’t until 2010 that Alan started seeing the label as a cohesive collection rather than a series of separates. Each season, he began offering more items, expanding into handbags, eyewear, home and jewellery. “Our own customers wanted more and so did buyers,” Alan recalled. There are certain product categories where he’d like to delve deeper — expanding the shoe offering, for instance — and others that he will barely touch. Denim, for instance, is a non-starter. “We’ll play around with it, but there are already a lot of great denim brands out there, many of which we carry,” said Alan. “I don’t feel a need to make everything.”

What Alan did feel the need to do was expand his retail network. There are now 22 Steven Alan stores across the US, from Greenwich, Connecticut to Portland, Oregon — one of the big reasons he took on a minority investor in 2011. “I don’t ever want to get to the point where we dilute the brand,” said Alan, explaining his decision to add more retail stores rather than expand the brand's presence in department stores.

Steven Alan is currently stocked in select department stores like Barneys New York, but for Alan, it's important that his own stores are a genuine part of the neighbourhood they inhabit, not housed on a major retail streets. In Los Angeles, that meant opening on Abbott Kinney Boulevard in Venice; in San Francisco, he opened on Hayes Street in the city's Hayes Valley neighborhood; in Brooklyn, he’s on Atlantic Avenue, alongside a slew of antique stores. “It’s more representative of the company,” he said.

His backer is Bedrock Manufacturing, the private-equity firm owned by Fossil founder Tom Kartsotis, whose investment has also allowed Alan to hire a team of top executives, including Trish Donnelly, a J. Crew veteran who is now the company's president, to support the growth of the business. "It was just too difficult to get to the next level without taking outside capital. The main thing we were able to do with the investment was hire the key people, which allows us all to just be better at our jobs."

But the deal with Bedrock came about more through happenstance than strategic planning. “We weren’t really actively looking; we weren’t going on the road show,” said Alan. Instead, Alan first met Kartsotis when he paid a visit to the company's TriBeCa store. “He asked the manager if I was around and my office happens to be across the street. A half an hour later, he came by. He asked what I wanted to do, I told him, and we came up with the terms of the deal,” recalled Alan. “We had been approached by different investment banks in the past and a lot of the people we had met with were looking at the short term. But I think, with a great brand, you always have to look at the long term. We’re compatible in that way.”

Alan might move gingerly. He is also guarded and declined to reveal revenue figures (sources close to the company say it generated between $40 million to $50 million in sales in 2013). But his ambitions run deep. His next step? International expansion. While a licensing agreement with United Arrows in Japan has proven successful, he wants more of a global presence. “We’re really looking to Europe,” he said.

One thing Alan is not doing: worrying too much about what the competition is cooking up. "I guess you have to have competitors, but we work so closely with designers that I often sell or represent the designers who could be thought of as [competitors to the Steven Alan brand]," he said. "Instead, we show [those brands] that we want to do well. Think about the music industry. A recording artist will produce another musician's album. It's so common. And normal."

Disclosure: Steven Alan is part of a consortium of investors which has a minority stake in The Business of Fashion.

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