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WWD CEO Summit: Andrew Rosen

Having grown up on Seventh Avenue, the third-generation industry leader has seen the industry from many vantage points.

Andrew Rosen

Having grown up on Seventh Avenue, Andrew Rosen, a third-generation industry leader, has seen the industry from many vantage points. His background includes roles as president and chief executive officer of Puritan Fashions and later president and ceo of Anne Klein. Today, as ceo of Theory and Helmut Lang and an investor in such companies as Proenza Schouler, Rag & Bone, and Alice + Olivia, among others, Rosen has developed an expertise in the contemporary and designer market and is viewed both as a strategic adviser and mentor to young designers.

WWD’s editor in chief Edward Nardoza sat down with Rosen to talk about his investment strategy, his own mentors, how the industry has changed over the years and where it’s headed.

WWD: We referred to you as the “bridge.” You grew up on Seventh Avenue and now you’re a mentor and investor in various young companies that are helping to chart fashion’s future: Proenza Schouler, Rag & Bone, Helmut Lang in addition to Theory. Tell us about your mentors — your father and grandfather were both products of Seventh Avenue and helped shape Seventh Avenue.
Andrew Rosen:
The principles of running a clothing company back in my dad’s time, or even my grandfather’s time, are the same as they are today, but clearly the world has changed a lot. I think companies then, and today, need to be innovative, inspiring, have integrity and passion. My dad [Carl Rosen] was a very inspiring man, had spent his whole life in the clothing business, as his dad [Arthur Rosen] had. I think he learned from his dad, and I learned from him about how to create an environment that was stimulating, exciting and how to market product and how to innovate. It was a time when we didn’t have Google to reach back when we didn’t know something. If we wanted to find something out, we had to network in the truest sense of the word. If you wanted to know how something sold, you went down to Bloomingdale’s and Saks and counted the stubs on the spindle at the end of the day.

WWD: Was the industry more fun back then?
A.R.
: We always think the old days were more fun, but I’m enjoying it a lot now.

WWD:
What was it like working with Calvin Klein and Barry Schwartz in the Eighties?
A.R.
: Calvin and Barry taught me about being entrepreneurial. They were real entrepreneurs, a great team together and really exciting to be with. That was an exciting time, and their company was growing like crazy. Calvin was at the forefront of so many new ideas, in terms of marketing and product. After that, I spent a number of years with Frank Mori at Anne Klein. Frank taught me a lot about how to be a good corporate executive. Frank was a terrific executive and a terrific leader.

WWD: Did your mentors teach you to trust your own instincts? Or did they show you where the boundaries are and where to take risks, and where to avoid risks?
A.R.:
With my dad, that was really a big thing of his, to believe in yourself and trust your own instincts. And certainly that continued with Calvin. It’s really an entrepreneurial trait. In my early years, I had good training that way. Today, interestingly enough, I still have mentors. One of my great mentors today is Mr. [Tadashi] Yanai, who’s founder and ceo of Fast Retailing. It’s an incredible company doing business all over the world and very innovative.

WWD: There’s a theory at retail that it lifts all boats if you have a vertical store across the street from a department store. I’m not sure that’s the case all the time. When it started to happen in the old days of Ira Neimark and Bergdorf Goodman, if you opened a store, you were thrown out the next day. How has that changed and how do you keep your dual brand in both places?
A.R.:
Clearly, as a designer manufacturing clothes, you cannot just survive on being a wholesaler. In the old days you would think about making clothes to sell to your customers. Today, I think about making clothes to sell to the consumer. I think about putting merchandising and marketing programs together that will stimulate and excite the consumer. There’s no more wholesale business as we knew it before. Even working with the big department store retailers today, it has to be a partnership. We, together with them, have to work to develop a singular approach. It can’t be us sitting in our showroom, hanging up clothes, selling them clothes, and them buying [the clothes]. It has to be a complete partnership where we’re working together. The industry is too demanding today, the competition is too severe, for it to be just an arm’s-length transaction.

WWD: Tell us about brand development as it relates to the brand you’re developing now. Helmut Lang, Rag & Bone, Proenza, Theory…does each have its own freedom to do what it needs to do?
A.R.:
I believe every company has to have its own culture and its own identity. All those companies operate independently. I’m the only one who sort of touches all of them. My philosophy is, it’s important to understand the mission of each company, the designer’s aesthetic, the designer’s desire and direction, and where they see the company going, and to put together a platform in unison with them that turns that creativity and that dream into a reality.

WWD: What do you look for in deciding whether to invest in a brand?
A.R.:
There’s got to be innovation, there’s got to be integrity, there’s got to be authenticity and there’s got to be passion. The whole idea when you’re looking for young companies is not just about making clothes to fill up racks in stores, but finding companies which can cut through and find a seam in the market and leapfrog over the rest because they have a good idea.

WWD: Does it start in the designer’s imagination, or is it ferreting out a perceived need in the consumer’s mind?
A.R.:
I think it’s a combination of both. When I started Theory, all companies were thinking about making coordinated clothes. They weren’t thinking about making individual pieces that worked hard in a woman’s wardrobe. No one had put together a line exclusively of stretch fabrics.

WWD: Theory’s one of the great success stories of the last 20 years. One of the questions we had submitted in advance from the audience was whether you would ever take Theory public?
A.R.
: Theory is part of a great company, Fast Retailing. Fast Retailing is a public company on the Japanese exchange. They have a group of stores named Uniqlo. Mr. Yanai is very happy with the ways things are, and speaking for myself, I’m also happy working under that umbrella.

WWD: Tell us about your own personal division of labor. With multiple brands, interacting with designers, product development, sourcing, relations with commercial developers, department stores. How does your day break down?
A.R.:
When I started in the industry, my dad put together a training program. I never went to college. I started working in the factories and the warehouses, the manufacturing side of the business. I came to New York and worked in the showrooms and design rooms. I like to get involved in important decisions in the company. I would feel that I’m more effective down in the field than I am sitting up in my office moving papers around. I like to get involved with manufacturing issues and real estate and merchandising and design issues. That happens when they need me. If they don’t need me, I’m happy to go play golf.

WWD: Gary [Hamel, professor at London Business School] was saying top-down management, an authoritative regime, is really a thing of the past. Are you a living example of that? Management by collaboration and facilitation?
A.R.
: I’m a big believer that the ceo has to be responsible at the end of the day, and has to know what’s going on. I believe some of the best ideas are coming from the people doing the work. I want to create an environment where people are excited to come to work, where people feel that it’s OK to share their point of view. I don’t always have to agree with their point of view, but I always have to listen to their point of view. My office door is always open, and I encourage people to come and talk to me with good ideas, or with problems.

WWD:
You have been involved with various initiatives with the city, and have been trying to tackle the problems that Seventh Avenue faced. Are those days pretty much gone? Aren’t those jobs gone? What can it become, and what kind of thinking is this task force doing?
A.R.:
I think there’s a great opportunity in America, and especially in New York City, to bring manufacturing back here. The problem with the manufacturing arm of the garment center, there’s been no investment in the manufacturing process, no new machinery, no upgrade of facilities, no training programs, there’s been no collaboration with equipment manufacturers or software companies. The garment industry in New York City has been left to fend for itself. But what’s happened is the prices in China have escalated, and there’s a big opportunity to bring work back here. I never would have started Theory and never would have been as successful as I was if I didn’t have the ability to manufacture clothes in New York City. There are a lot of other designers and a lot of other companies like that. I’ve gotten together with the city and the CFDA. We’re just about to put forth a program where we’re going to put together a fund, initially supported partly by the city and partly by the industry, to invest in either grants or interest-free loans into existing manufacturing facilities so they can upgrade their own facilities and stimulate American companies who want to do more manufacturing here. Look at what’s happened in California with the jeans and T-shirt industry. The factory owners in California have invested in equipment and technology so they are the leaders of jeans and T-shirts around the world. I think we can do the same thing in New York City.

WWD:
I would think proximity to market would be a selling point for someone starting out in business. But even [for] an established brand, proximity to market gives you the ability to get into the factory and feel the product. You look at where some companies are going.… Bangladesh, Pakistan and those terrible tragedies because the factories are ungoverned and unregulated. I would think it would be a very appealing thing, but don’t the economics negate it?
A.R.
: I’m not talking about making clothes for the masses. I’m talking about contemporary, designer-oriented clothes is where we need to start. I manufacture clothes in China and Europe. If there were a buck or two difference it would be a lot. Certain categories of clothes, like silk or sweaters, are maybe a different story. But if you’re talking about jackets, pants and shirts, there are great opportunities. And I see a great opportunity for manufacturing in New York.

WWD: Fashion designers are notoriously difficult to manage. You’ve had lot of success. What’s your secret? Give them lots of room and lots of freedom?
A.R.
: I think you have to give designers lots of freedom creatively. You also have to be able to understand, and have them understand, what the objectives are. I like to understand what the designer’s creative platform is, where they want to go. My job is to be able to work with them to make them into a successful business. My definition of a successful business is to make clothes that they’re proud of and making clothes that we can see in important stores around the world. The result of having a good process and creativity is making money. My first objective is not making money. My first objective is to make sure we achieve the objectives we have together. Every great designer, if you look through history, has been successful because they’ve had a great partnership with someone who helped focus them on a business platform.

After the Q&A, questions were asked by students at the Fashion Institute of Technology and Parsons The New School for Design and other audience members.

FIT STUDENT: What do you enjoy the most about being part of the CFDA/Vogue Fashion Fund?
A.R.:
The CFDA/Vogue Fashion Fund is a fantastic thing, and is incredibly important for the future of American design. The final 10 designers get the opportunity to go through a rigorous program and meet some of the leading minds of our industry, and gain access to the thinking and ideas of this group. The three winners get a mentor, and many of them consider that more important than the money.

PARSONS GRADUATE: There’s a theory of success that you have to combine something you’re really great at with what you love. What are those two things for you?
A.R.:
I was lucky that I ended up having a dad who invited me into an industry that I loved and I ended up being pretty good at it. I can’t wait to go to work on Monday mornings. I like my Fridays where I get to go home. I like coming back on Monday morning, and I love my work. It’s a bonus if you can combine your work with something you love, and something that you happen to be good at. My friends ask me, “Why do you work so hard? And why are you so passionate about it?” I’m passionate because I found a space in the market that I really enjoy. Over the years, I perfected the area of the market that I think is my strength and I focused on things that matched my own skills and my own aesthetic.

BRIDGET FOLEY: Is there a constant misconception or idealized concept that many younger designers have that’s a rude awakening?
A.R.:
First and foremost, me mentoring young designers is a misnomer in a way because I get a lot from them. I think I probably learn as much from them as they learn from me. I like to talk to young designers and young people in our industry because I get a very core perspective of what’s going on. Having said that, not every designer is going to be successful. It’s an incredibly competitive industry. It’s very difficult as a young designer to come out of school, start your own business, and not have the proper financial support and not have the proper business support, and think you can make it work. There are cases where it does. My advice to them, first and foremost, is spend five years, work for somebody else, get some practice on somebody else’s money. I didn’t start my own business until I was 40 years old. When I started my own business, everyone thought I was crazy to start from scratch and I had all these jobs. But I was equipped to do it because I had all the successes and failures of my prior career. And I think it’s not only the successes that are important, but the failures are important.

B.F.: We’ve had the recession and yet in the past 10 years, really since the Proenza ascent, there’s been a great short-term success of designers taking off. Is it just kismet? Why is the time right for this to happen?
A.R.
: A lot of the big designer names in America sold their companies. Those companies turned into businesses. They were no longer the creative art forms. I think the industry changed, I think the world changed, and it created an opportunity for new designers to come in with a new perspective, a new passion and new innovation. I think designers like Alexander Wang, the Rag & Bone boys, Proenza Schouler, there’s a whole host of them that have come in and made an important mark on American fashion. Those are the designers who are now playing on a global scale. Those designers thought not about designing clothes in the luxury market — and this is where I think they found a seam in the market — they thought about making clothes that are more democratic and more accessible. That’s why the new young American designers have been successful.