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.
SAN FRANCISCO, United States — On March 9th, San Francisco's de Young museum held a black tie benefit for its latest show, an Oscar de la Renta retrospective. The de la Renta family came west for the event, which was attended by members of the city's social set, from Diane B. "Dede" Wilsey to Vanessa Getty, who have helped to make the San Francisco Bay Area — which includes Silicon Valley about 40 miles to the south — one of Oscar de la Renta's top markets.
Guests were almost exclusively decked out in gowns created by Mr. de la Renta — who passed away in October 2014 — or his successor Peter Copping. Notably missing, however, was Yahoo chief executive Marissa Mayer, a long-time client of the house who helped to fund the exhibition alongside several other patrons. The timing of the event wasn't ideal for Mayer, who was set to appear on talk show Charlie Rose the next evening to defend her tenure at the struggling Silicon Valley tech giant. Attending a glitzy gala in the middle of a crisis could be seen as poor judgment no matter what the cause, but it certainly didn't help that the evening's festivities benefited a fashion exhibition. In 2013, Mayer was widely criticised in Silicon Valley for appearing in a fashion shoot in American Vogue, an episode that goes some way towards explaining the gulf between the traditional value systems of the tech and fashion industries and, more broadly, the affluent Bay Area's uneasy attitude towards fashion as a whole.
"To be honest, I don't think people think a lot about fashion here," says Michael Preysman, founder and chief executive of Everlane, the direct-to-consumer basics brand reported to be seeking new investment at a valuation of more than $250 million. "I think they think about convenience. San Francisco in particular is a very idea-centric city. People value intellectual ideas."
“Everlane exemplifies the way the Bay Area approaches fashion,” says Mo Clancy, a fashion industry veteran who opened the clean eatery Seed + Salt in San Francisco’s Marina neighbourhood in 2014. “It’s a very minimal, pared down, kind of conservative approach. Very functional, simple.” Stop at Clancy’s restaurant on a weeknight and you’re likely to find diners wearing leggings and running shoes — not surprising given that organic food, running, hiking and yoga figure more highly in the local consciousness than shopping for luxury goods. Indeed, the Bay Area has long had an anti-materialist bent, rooted in its link to 1960s counterculture and the culture of engineers that gave rise to Silicon Valley.
“As it stands right now, closets full of designer clothes and accessories seem out of place,” says stylist Jason Campbell, who has been working with Silicon Valley clients — tech billionaires, wives of tech billionaires and socialites — for over a decade. But Campbell, who is also known for his work with Wendi Murdoch and Ivanka Trump, can sense a shift in the region’s affinities. “That time will come,” he says. “[Silicon Valley] is still finding its place on the style spectrum.”
Twitter HQ in San Francisco's Mid-Market | Source: Matthew Keys/Flickr
In recent cycles, fuelled by the growth of fashion e-commerce, the promise of wearables and the democratizing effect of social media, fashion has emerged as a key focus for several of the area's major tech players. But beyond the business imperatives, there's evidence that values are starting to shift. Twitter chief executive Jack Dorsey, for one, now regularly wears Rick Owens 'Island Dunk' high-tops, which cost more than $1,000 per pair, to the company's office in the still-rough but fast-evolving Mid-Market section of San Francisco, also home to companies like Uber and Square, drawn to the area by tax breaks.
Then there's the spate of luxury fashion retailers opening in the region. In the past year, Isabel Marant has opened on San Francisco's Jackson Square, while Maison Margiela has launched on nearby Maiden Lane. And just last month, Barneys New York opened the doors of its standalone men's shop (across the street from its original location near Union Square). Meanwhile, Hermès has acknowledged plans to open a new boutique in Palo Alto, in the heart of Silicon Valley. And the luxury wing of Westfield's Valley Fair shopping centre — which straddles the border between Santa Clara and San Jose, about 10 minutes by car from Apple headquarters — has welcomed brands including Balenciaga, Saint Laurent and Bottega Veneta. A $600 million expansion project, set to be completed in 2017, will bring 80 to 100 more stores to the complex. "A partnership between Silicon Valley and luxury fashion has become more evident in the past couple of years," says Caran Fisher, senior marketing director at Westfield Valley Fair. "Even if it is sort of a jeans-and-hoodie environment, it's an elevated jeans and hoodie."
Of course, San Francisco has always had a strong social scene, with luxury brand after luxury brand sponsoring gala after gala. "If a gala is sponsored by a house, like Dior, [the attendees] all want to wear Dior. Normally, a brand will see significant sales from an event," explains Allison Speer, the public relations guru and de facto welcoming committee for high-fashion brands aiming to hold events in the Bay Area. (Speer, who worked for Giorgio Armani before starting her own firm in the early 2000s, owns what many call "the list," a who's who of social movers. She is also chummy enough with the top names to entice them to attend.) "You've never seen people dress like this for an opening of a store. Everyone wants to be in the current season," she continues.
The leaders of the city’s social community include the philanthropist Wilsey, her son (tech entrepreneur) Trevor Traina and the famous author Danielle Steel. But a new generation of tech wealth has joined the party. “When I left Armani and launched my firm, the focus was retail luxury brand store openings. But what I quickly realised was that it wasn’t just about dressing the celebrities [and socialites], it was about dressing tech,” Speer says. “More and more of my friends in venture capital were coming to me and wanting the same shoppers that were attending Armani and Dior events to attend their events.” By 2009, Speer had signed AirBNB as a client.
“I think there's not only acceptance in terms of fashion, but an increased and growing appreciation for it,” says Julia Hartz, co-founder and president of Eventbrite. “Additionally, I think as more empowered women become role models to other women and a new generation of entrepreneurs come into their own in terms of appreciating both fashion and art, that we are seeing a changing tide.” Hartz says she shops online quite a bit: Net-a-Porter, The RealReal, MatchesFashion and Farfetch are favourites. (Mayer is said to be a big Net-a-Porter client as well.) And the retailers certainly value the region. Recently, Net-a-Porter hosted a pop-up shopping suite in the home of Katie Traina, who is married to film producer Todd Traina.
The luxury wing of Westfield's Valley Fair mall in Santa Clara | Source: Courtesy
To be sure, the Bay Area is home to many with the money to buy luxury goods. In 2014, the area’s gross domestic product (GDP) reached $626 billion. That number combines GDP for the San Francisco–Oakland–Fremont metropolitan statistical area (MSA), which was $412 billion, and the San Jose-Sunnyvale-Santa Clara MSA, which was $214 billion. In 2015, the San Jose metro area ranked first in the country for job growth over the past five years (15.7 percent) and increase in average wage (19.7 percent), while the San Francisco area ranked 9th (11.1 percent) and 11th (10.1 percent), respectively, according to a 2016 Brookings Institution report. The two metro areas house nearly a quarter of the country’s high net worth individuals — or those with at least $1 million in liquid financial assets — according to management consulting firm Capgemini. What’s more, the average salary of those living in the San Jose MSA and working in technology was $118,243 in 2015, a five percent jump from the year previous and $21,873 more than the national average. Nearby Atherton, home to many of Silicon Valley’s venture capitalists, was called the “most expensive zip code” in America by Forbes, with a median home price of $10.6 million. In San Francisco itself, ground zero for a raucous debate on gentrification, the median rent for a one-bedroom apartment is $3,500, the highest in the nation, according to a February 2016 report by apartment rental website Zumper.
It’s this affluence that former Vogue editor Emily Holt hopes will buoy her concept store Hero Shop, which she plans to open in midsummer on San Francisco’s Post Street. The location is not far from Mid-Market, on the periphery of the Tenderloin neighbourhood, the city’s traditional skid row, where a legion of homeless people still live alongside emerging art galleries and tech start-ups. Holt currently has a small group angel investors, all of who are women and believe the city — and the greater region — needs more specialty retail. “Raising money for a brick-and-mortar store in tech-obsessed Silicon Valley was not as easy as I thought it would be,” Holt says, sensing the irony. “The women I’m working with so far, though, didn’t need convincing and I think that’s evidence of the appetite. They’re willing to take a huge risk in this business because they’re that hungry for a place that celebrates fashion and does exciting things.”
"The narrative around Northern California fashion and style is that it doesn't exist here. I don't think that's the whole story and I want to change the plot a little bit," Holt continues. "I want that idea of this being a wasteland for fashion to fade away." Holt's buy includes local designers, such as Stevie Howell, Future Glory and Tempest + Bentley, as well as a range of labels beloved by her fellow fashion editors, including Adam Lippes, Gabriela Hearst, Creatures of the Wind and Sophie Buhai. "It's a good time for something like this," she says. "Right now, within San Francisco and the Valley, there is less of a stigma towards fashion. You also have a lot of people moving here from New York or Los Angeles or Europe, and they're used to consuming in a certain way. They need places to shop, too."
"San Francisco is a tech town today — all of Silicon Valley going up and down the freeway every day," says Susan Foslien, owner of the influential upscale boutique Susan and the contemporary-driven Grocery Store, referring to the flows of moneyed tech employees who increasingly prefer to live in San Francisco proper and reverse commute down to jobs in Silicon Valley, often on private bus services run by their firms. (While small- to medium-sized tech companies are increasingly based in San Francisco, giants like Facebook, Google and Apple remain south of the city in the Valley). Foslien — who carries brands like Vetements and Yang Li, alongside Junya Watanabe and Simone Rocha — rejects the idea that the area's casual culture means there aren't plenty of people who are interested in serious fashion; they're just not interested in peacocking. "I dress a couple of people who are in tech who say, 'I can't look like I'm wearing anything terrific,' but they want great fabrics," she says. "The cool thing today is not to talk about it… You can order $1,000 bottles of wine and spend $5,000 on your meal, but you're still sitting there in jeans and a t-shirt and that's cool."
“It’s a downplayed affluence. You may drive a Prius, but you live in a $6 million home,” says Julie Kelly, director of marketing and business development at the Stanford Shopping Center, an expansive outdoor mall on the border of Palo Alto and Menlo Park, adjacent to Stanford University and just minutes away from some of world’s biggest venture capital firms on Sand Hill Road, as well as the Rosewood Sand Hill hotel, an intermittently raucous element of Silicon Valley’s social scene.
"Mark Zuckerberg took a stand with that grey hoodie. Yet he will block streets to get his houses done," adds Foslien, referring to the Facebook founder's uniform of choice. While more fashionable types may resent — or at least roll their eyes at — the grey hoodie narrative, the more casual, yet undeniably considered, approach to fashion here is reflected in a cadre of small but respectable independent brands emerging from the region. "This place is not New York. It's not crawling with designers, but I do think that there is a handful of designers that are good and deserve to be given a spotlight," says Holt. Nearly all of them — including those Holt is carrying in the store — have attached some sort of social mission to the work they're doing. Howell, for instance, uses organic fabrics and natural dyes. Jumper brand Tempest + Bentley is knitted in the United States with American-sourced yarns. "We're definitely makers," observes Bryr designer Isabel Schofield, who handcrafts clogs at her workshop in the Dogpatch neighbourhood of San Francisco. Other local designers with a reach beyond Northern California include Ali Golden — who runs a multi-brand boutique out of the indie shopping enclave Temescal Alley in Oakland — and Lauren Wolf, whose boutique Esqueleto is right across the way from Golden's.
Men's boutique MAAS & Stacks on Market Street in San Francisco | Source: Courtesy
Otto Zoell, co-owner of the menswear store MAAS & Stacks, which opened in San Francisco in 2011 and carries high-concept labels like Craig Green and JW Anderson alongside Japanese streetwear brands like Sunsea, says the most surprising thing about the local customer — aside from his willingness to buy into brands like these — is his interest in the sourcing and manufacturing of the garments. "The supply chain is very important to them," Zoell says. "These are people who actually work for their money, and they're looking for a solid value proposition. Regardless of aesthetics, the fact that Craig Green is made in the United Kingdom helps them justify the price."
Those niche SF labels — and others that resonate with local consumers — might sit in stark contrast to the few apparel behemoths that are headquartered in the area, including Gap and Levi's. But, as Levi's historian Tracey Panek points out, there is a certain ethos — ideals, even — that threads Bay Area fashion together. "Since we've been in the area since the Gold Rush, I often think of Levi's as one of the original San Francisco start-ups," she says. "The world was literally rushing in, and it was an exciting place to be." It seems that history is, indeed, repeating itself.