Entireworld, the direct-to-consumer apparel brand that made a name for itself as the It-brand of early pandemic life, announced on its Instagram on Wednesday it would wind down operations and launch a liquidation sale. In the post, founder Scott Sternberg explains the difficulties the brand faced operating as an independent label, chasing “unsuccessful fundraising” and eventually an almost-acquisition that, after it fell apart, forced the brand to close.
“Entireworld is a big idea, a massive undertaking, which would require significant capital to be able to compete with the countless brands out there,” Sternberg wrote in the post.
Sternberg launched Entireworld in 2018, his next chapter after menswear brand Band of Outsiders (which sold men’s button-downs for up to $325 and relied on a wholesale model) closed. At the beginning of the pandemic, Entireworld’s success was chronicled in BoF as well as in The New York Times, as it became the poster brand for a feature on the future of the fashion industry called “Sweatpants Forever.” The article explored how near-instantaneous shifts in consumer preferences left fashion brands desperate to make a single sale, while those that were able to pivot were able to ride the loungewear wave of success.
As the world recalibrated and life outside the home resumed, however, consumers hurled themselves into “revenge shopping” for products like going-out clothes and party shoes. While loungewear and athleisure continue to be growing segments, the challenges that plagued independent brands before the pandemic have not disappeared.
Sternberg did not immediately respond to BoF’s request for comment.
“Operating at a loss and hoping for investment isn’t a sound business plan, it’s a disaster waiting to happen,” said Gary Wassner, chief executive of factoring firm Hilldun Corporation. Startups today often operate at a loss in the hopes that they will overcome deficit spending with new funding rounds rather than by generating healthy cash flow, ignoring margins in favour of drumming up top-line sales to drive further investment, Wassner said.
Entireworld’s downfall also highlights the limits of PR in propping up a business. Sternberg’s direct communication with customers in long, earnest Instagram captions about the struggles Entireworld faced at the beginning of the pandemic humanised the brand. (He also used the platform to announce the brand’s closure.) But goodwill does not a healthy business make.
”If [a brand has] been working on the proper margins needed to accommodate their overheads and [cost of goods sold], they can adjust to a downturn more easily and quickly,” Wassner said. “During Covid, smaller brands immediately sought to preserve cash by right-sizing their companies and getting out of inventory commitments. The larger companies cannot turn on a dime. The bleeding lasted longer.”