BROOKLYN, United States — Sneaker label Greats has partnered with American department store Nordstrom, marking the category disruptor's first foray into wholesale.
Founded in 2013 by Ryan Babenzien and Jon Buscemi, Greats launched by selling shoes directly to the consumer — instead of through wholesale partners — with the intention of offering lower prices for higher-quality goods. At Greats.com, sneakers start at $59, while handmade Italian styles began at $169. (The "suggested retail price" for those styles are $147.50 and $422.50, respectively.) Typically, customers pay 2 to 2.5 times what wholesale partners — including department stores and indie boutiques — pay the makers of a product.
Greats will cost the same at Nordstrom as they do online, which will likely be a hit to Greats' margin. (The company would not disclose the terms of the deal.) However, the upside to such a partnership is the scale and exposure a retailer like Nordstrom — which may help the brand reach a new customer — can bring. “It’s important to offer price parity regardless of where our customer chooses to buy Greats,” co-founder and chief executive Babenzien tells BoF.
In the past half-decade, Nordstrom has served as a catalyst for several direct-to-consumer start-ups to develop their wholesale presence. (It recently announced a partnership with basics label Everlane.) “We have a successful history of working with brands that formerly sold only direct to their consumer,” Robert Evans, Nordstrom’s divisional merchandising manager for men's shoes, tells BoF. “It started with Topshop, then Madewell, Brandy Melville, J Crew… We strive to bring our customers the best the market has to offer, including innovative product concepts, and we want to have the brands our customers want. We put Greats in that category."
While this isn’t the first time Greats have been stocked in a brick-and-mortar store — its 2015 collaboration with Parabellum was available for sale in the leather good label's LA boutique — the Nordstrom partnership is omnichannel, and is part of a wider expansion into physical retail. The label plans to open ten of its stores over the next two years. In May, Greats raised $10 million in equity funding led by California-based venture capital firm JH Partners, taking the brand's total funding to $13 million. Existing investors include retired NFL star Adrian Wilson and Searchlight Capital's Eric Zinterhofer.
“While digital is and likely will be our number one channel of distribution, there is still a large percentage of the customer base that wants to touch and feel the product, especially in the discovery and consideration phase,” says Babenzien. “People don't talk about this enough. Even if the customer goes home and buys on their mobile phone, they were influenced after being able to experience the product physically, smelling the Italian suede, seeing how it fits and ultimately deciding if they want it or not. Building a great brand today is not about picking one channel, but finding the right balance in all of them.”
For Nordstrom — which will stock Greats in eight stores including outposts in San Francisco, Santa Monica and Los Angeles, as well as online— offering shoppers product that cannot be bought elsewhere is more essential than ever. Greats have designed new colourways exclusive to Nordstrom. “We [need] to give the customers a sense of discovery,” says Evans.