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Cynthia Rowley, Venture Capitalist?

The designer’s most unconventional brand extension yet is Pretty Penny, a program that offers support and seed money to budding entrepreneurs.

Peter Arnold, Laura Martin, Bill Powers and Cynthia Rowley, in front of Exhibition A pieces.
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Special Issue
WWDStyle issue 03/01/2011

When former Council of Fashion Designers of America executive director Peter Arnold was named president of Cynthia Rowley in 2006, he told WWD that his aim was to take branding out of its box. “We are focused on how to bring fashion into other product categories,” he said. “The traditional licensing route is a little bit dated.” Consider his mission accomplished. In the years since, Rowley has introduced Band-Aids, diapers, wet suits, picnic blankets, strollers, hammers, screwdrivers and bibs, not to mention a lineup of virtual clothing for social network Meez.com and its community of avatars.

This story first appeared in the March 1, 2011 issue of WWD.  Subscribe Today.

But the designer’s most unconventional brand extension yet is Pretty Penny, a program, not unlike the CFDA Fashion Incubator, that offers support and seed money to budding entrepreneurs. The caveat, though, is that it’s restricted to Cynthia Rowley employees.

The public got its first glimpse of the Pretty Penny operation back in November — though no one knew it at the time. That’s when Rowley; her husband, gallerist Bill Powers; her business manager Laura Martin, and Gabby Munoz, formerly of private equity firm General Atlantic, launched Exhibition A, an online site that sells limited edition art and other pieces on a flash-sale basis at friendly price points — everything is less than $500. There are big-name artists on their roster: Richard Phillips and René Ricard works have already sold, and this summer will bring ones by David LaChapelle, Kalup Linzy and Sean Landers. And last week, Exhibition A launched a wallpaper series, starting with a design by Jim Drain.

While Rowley and Powers, who was also a judge on Bravo’s “Work of Art: The Next Great Artist,” are the inevitable headliners, it’s actually Martin, 26, who came up with the idea for Exhibition A. The Virginia native started out as an intern at Cynthia Rowley in 2005 and then spent a year in the sales and marketing department at Robert Lee Morris before “making my way back here eventually,” she says. Martin is Rowley’s first Pretty Penny recipient.

No one can quite pinpoint the exact origins of the program, but everyone emphasizes that entrepreneurial thinking has always been part of the company’s Kool-Aid. “It’s a mind-set we cultivate,” says Rowley. “If you have an idea, bring it to us and let’s try to make it work. I want people to think expansively and to feel like they’re entrepreneurs in their own position. It’s just pretty much stayed within the realm of fashion until now.” She brings up her 2009 pop-up shop at Art Basel as the perfect example — Martin hatched and oversaw the project from start to finish.

Pretty Penny’s genesis seems to stem from a February 2010 company meeting in which Martin pitched her idea for an online platform to buy affordable art. “It’s something I’ve been thinking about,” she recalls. “I was frustrated as somebody who wanted to be a young collector, but knew I couldn’t afford an original piece by these established artists. Then with [‘Work of Art’] and seeing how it opened art up to a broader audience, I thought, why can’t somebody like me collect art?”

Though the meeting’s agenda was to discuss business strategies for the upcoming year, Martin’s digression wasn’t so unusual. Whereas other designers flirt with the art world, Rowley’s connection is a full-blown affair: she’s an avid art collector, chaired MoMA PS1’s 30th anniversary gala, has sold her designs at the Gagosian Shop and married Half Gallery co-owner Powers — at the Montauk home of renowned photographer Peter Beard, no less. Both sit on the board of nonprofit group RxArt.

So Martin’s proposal simply clicked. Rowley and Arnold decided to back it — “in a more structured way,” he says — which eventually led to the start of Pretty Penny. The designer intends to fund a new business idea each year. There’s already a batch of employee pitches on deck for 2012, which range from beauty to food and beverage.

Rowley is quick to point out that she’s not just handing out a few starter dollars here and there. The seed funding is substantial, in the six-figure range, which is about all she’ll reveal. “This isn’t a prize,” adds Arnold. “This is a significant investment.” And, yes, for those wondering, the label does have the wherewithal to offer such financial support. “We’ve got a significant wholesale business, six of our own retail doors, and licensing arrangements and partnerships that have started to generate a very regular return to make a funding decision like this,” says Arnold, who declined to give specific sales figures except to say the company sells “over $150 million worth of product” annually.

But the support goes beyond the monetary. Exhibition A shares Rowley’s resources in marketing, public relations, accounting and legal until the start-up, which is its own business entity, is financially capable of hiring its own. While it might beg the question of whether the designer is running her staff thin — especially as, if all goes as planned, more and more employees turn entrepreneur — Rowley simply notes, “Well, we’ll just hire more talented people.” To wit: she’s already tapped a new p.r. director — Elyssa Dimant, who happens to be the author of “Minimalism and Fashion: Reduction in the Postmodern Era” — to replace the last one who left her position to begin freelance consulting for Exhibition A, among other projects.

“We’re making sure this thing has legs,” says Arnold. “We want to know that we’re taking a stake in something that has business merit and that there will be a return over time.”

And so far, things look good for Exhibition A, whose name was partly inspired by Andy Warhol’s 1968 “a, A Novel.”

“It’s done surprisingly well for a start-up,” notes Martin. Within the first month, more than 13,000 people signed up as members, with clients as widespread as Australia, Sweden and Brazil. “Fashion used to be this elite, niche market and now it’s part of America’s everyday vocabulary,” adds Powers. “I think art still has to grow into that and hopefully we can be part of that process.”

And now, Exhibition A is about to grow beyond the digital constraints, too, if only briefly: the company has partnered with New York’s Ace Hotel to hold a monthlong exhibit there, opening on March 14. “Monochrome Set” will showcase works by Terence Koh, Nate Lowman, Hanna Liden, Olivier Zahm and others, all of whom have sold on the site, as well as pieces by Olympia Scarry and Peter Sutherland, both upcoming contributors. “This is about evolving as a brand and culture,” says Rowley. “You have to constantly explore, experiment and innovate. It’s the sort of idea where, if it’s not the end of my career, it will be something totally amazing.”