“Perfection can sometimes be the enemy of good,” said Allbirds founder and chief executive officer Joey Zwillinger, who opened the inaugural ReMode conference last week with a fireside chat alongside the event’s founder Pierre-Nicolas Hurstel. “Start with something you think is best in class, and as long as you are up front with people that you are trying to make products that are authentically tied to that, you can have great success.”
ReMode gathered industry leaders and innovators at the Los Angeles Convention Center on Nov. 13 and 14 to spark ideas on new ways of investing, designing, marketing and approaching fashion, from raw materials to the in-store experience. Among the companies represented were Kering, H&M, Google, Target Corp., Tmall, Lacoste, Farfetch, Alice + Olivia, The Real Real, Westfield, Levi Strass & Co. and Shopbop, as well as leading financial investors and technology providers.
Also opening the day, Everlane founder Michael Preysman spoke of the company’s infancy, when pricing transparency was the focus. “Pricing was easy to unpack and tell the story to the consumer about how much their T-shirt cost. When we started looking at which factories to work with, it got more complicated…it became about environmental transparency. In a world with a global climate crisis, people were looking to companies to lead that change.”
“The thing to remember is we don’t own the supply chain, but our goal is to push them forward to find the right combination of price, design and ethics. We’re auditing ourselves, then educating the consumer on things they didn’t know existed,” said Preysman.
Sustainability was a common thread throughout the presentations, as retailers, technology companies, designers and influencers discussed ways to spread the message beyond the inner circle to consumers at large.
Said model Amber Valletta, founder of Master & Muse and A Squared Films: “We are all consumers and so it’s a responsibility that lies on all of us. Those of us who know about the issues have an obligation to get the information out to rest of the world. We don’t have the time and luxury of ‘hoping’ it gets out. We need to make a priority across all businesses. We need to make this information to be really clear, concise and accessible.”
With Master & Muse, her platform that aims to bridge the gap between cutting-edge design and mindful manufacturing, Valletta educates brands about more sustainable practices. Through A Squared Films, she is producing shorts that will educate consumers about how their buying behaviors can impact the planet.
As companies like Allbirds scale, so does their power to develop new materials. For example, it is now using Tencel made from eucalyptus fibers and foam that is made with sugarcane instead of petroleum. In August, it will roll out its first carbon-negative foam, used in the the bottoms of all its sneakers.
“It’s pragmatic and altruistic,” said Zwillinger. “And it’s open to everyone in the industry. We’ve gotten calls from over two dozen companies, and the more people who use it, the lower the price will get.”
Kering, too, is sharing its technology within the industry. Laurent Claquin, president of Kering Americas, said, “We believe we have to do it together to win.” Claquin pioneered the company’s sustainable initiatives in 2007 and said its goal is to be completely sustainable by 2025.
Toward that end, the luxury conglomerate has developed a leather tanning process that uses no heavy metals, and has partnered with LVMH Moët Hennessy Louis Vuitton on an open-source charter model. Kering also partnered with H&M to share research costs on how to extract polyester and cotton fibers from old clothes. With its environmental profit and loss accounts, or EPNL, Kering assigns a monetary value of these initiatives on every part of the supply chain, from raw materials to stores.
“This lets us prioritize,” said Claquin. “For example, we learned that 85 percent of the impact is at the extraction and processing of raw materials, so we need to go to the source for cotton, silk, gold and leather.” Innovations such as lab-created diamonds and stem-cell-generated leather have come to the fore as a result.
New business models, too, such as rentals and memberships, have thrived. Rati Levesque, chief merchant and cofounder of The Real Real, talked about the Sustainability Calculator, which will launch next year. “We developed it with the Ellen MacArthur Foundation, as a way to see our impact on the environment. Since 2012, we’ve offset [the equivalent of] 65 million miles of car and greenhouse gasses.”
The Real Real’s partnerships with Stella McCartney and Neiman Marcus also help grow the circular economy by encouraging people to consign by offering money back to spend at Stella or Neiman’s.
“You don’t always have to reinvent the wheel,” said actress Rosario Dawson, who founded the artisanal fashion brand Studio One Eighty Nine with Abrima Erwiah, which recently won the CDFA Lexus Fashion Initiative for Sustainability. The two sat down with CFDA president and ceo Steven Kolb to discuss ways to disrupt the status quo.
“We love doing collaborations because if someone else has figured out a better way to do something, we want to bring them to us so we can start learning those practices,” said Dawson.
When asked what their biggest goal was, Erwiah said, “To activate microentrepreneurs and educate future generations. Who is the consumer of the future? We might not be able to control how they consume, but we can teach them to create solutions so they don’t replicate the old ways of the past.
Reinvest: Following the Money
Fashion is recognizing money isn’t everything.
Being flush with cash may have helped some scale quickly in recent years via venture capital and private equity in a hot market that emphasized digital disruptors. However, new philosophies are taking shape around strategic partnerships and building a long-term brand.
This is one reason European conglomerates have had a leg up on their American counterparts when incubating smaller brands, pointed out Hilldun ceo and principal Gary Wassner.
“You need a support structure,” Wassner said. “You need someone there, a team there that understands this industry to help build that dream appropriately.”
That’s something several speakers hammered on throughout ReMode when it came to distinguishing between venture funding and strategics.
“Strategic investors are generally operators of some sort and they understand the inner working of the business. Venture tends to view the world a little differently without the operational expertise, the supply chain understanding and what it takes to make something,” said Greats founder and ceo Ryan Babenzien.
Resonance cofounder and ceo Lawrence Lenihan took a stronger view against venture capital for fashion, especially when the subject of valuations popped up.
“I think venture capital doesn’t work for this industry,” he said. “Everybody up here is going to have a different take on how these companies ought to be financed….A fashion brand is not a technology company. I think the headwinds that small brands face require something different. Fundamentally, the entire infrastructure for this industry has to change. It would be great to have everything handcrafted and everything else, but in the end you’re competing with Amazon. You’re competing against Zara. Your leadership is on your ability to create and not your ability to manufacture.”
The idea of sustainability — not in the green sense but building a lasting business — should be most important in measuring a business’ value, said Eurazeo managing director Adrianne Shapira.
“EBITDA [earnings before interest, taxes, depreciation and amortization] is a key metric for sustainability in private equity,” she said. “I think the barriers to entry are really low today and there’s a whole host of investing business models that are cropping up….I think at some point things will slow and so sustainability, durability of a brand and profitability is the best way you can identify who is on the right path.”
For as much as people want to argue over what’s the best metric — be it top line, unit economics or something else — nothing beats profitability, said Kings Circle Capital partner Mona Bijoor.
“As an entrepreneur, I’m very focused on profitability,” Bijoor said. “If you’re going to start a business, you should think about how to get to profitability as soon as you can.”
Remarket: Brand Building Today
No one’s buying product as much as they are a good story these days.
The brands winning in today’s increasingly fragmented landscape are masters of the story when either launching into the market or reasserting themselves back in.
History can’t be forgotten, but neither can the present for heritage brands. K-Swiss brand president Barney Waters thinks about that as he looks to continue a turnaround at the shoe company.
“It’s [heritage] definitely an asset, but it can also be something of a burden in a market that’s really fast and driven by speed and progressive brands and hype,” he said. “We always lean on the heritage as a good statement of authenticity and trust. But be aggressive at the same time and try and deliver the heritage in a fun and compelling way, which seems to be a formula for success right now. Heritage brands acting with more dynamic and progressive tendencies.”
It’s about keeping in mind the newer consumers doesn’t “want to be exactly like their dad,” Waters said.
“That’s key. I think it’s a question of the balance,” said Lacoste North and Central America president and ceo Joëlle Grunberg. “You don’t want to alienate a strong part of your [existing] customer.”
Leaning on the past is a powerful card to be able to play for the 85-year-old Lacoste and that manifests in the product, Grunberg said.
Newer brands create their plays from a slightly different book. However, the end goal remains the same: relevance.
For some, the narrative has been aided by technology. That, in and of itself, is also a tight-wire to walk.
“I think that for us we view tech as a vehicle to ease pain points and to tell a story, so we’re ever only going to use technology if it does one of those things,” said Rebecca Minkoff.
For others, the narrative has been around sustainability and mindfulness. Rallying around a less is more philosophy can be tricky if one is also looking to scale a business.
“It’s about making sure to drive demand at opportune times,” said Melissa Mash, founder and ceo of Dagne Dover.
Mash went on to say the Dagne Dover customer has been trained to expect drops twice a year, with newness in the product assortment more about introducing new colorways, fabrications or prints as opposed to additional handbag silhouettes.
Aday cofounder and co-ceo Nina Faulhaber said the firm uses data from a database of about 6,000 people to find holes in customers’ wardrobes and then introduces new product accordingly.
“We try to really design with our customer because our process is intentional or conscious design,” Faulhaber said.
Still, telling that story is a constant struggle even for those that have managed to have their voices heard.
“Consumers are getting very savvy and they can smell out what’s real and what’s kind of BS and what’s being put out by brands because it’s popular,” said State Bags cofounder and “GiveBackGuy” and Scot Tatelman. “It’s the thing to do to have a socially conscious mission of some sort. So, for us, for me being a brand that’s genuine and authentic is something I sweat over. I lose sleep over.”
Remake: Sustaining Sustainability
The drumbeat of brands with a cause found a rhythm in ReMode’s Remake sessions.
Washington, D.C., may wince in the face of issues like climate change and environmental impacts, but a growing number of apparel operations are taking the mantle for sustainability seriously.
The urgency is paramount for a fashion business that hinges on an uncomfortable truth: It takes massive amounts of water, energy and chemicals to grow, produce and finish fabric. That fact struck a chord for designers and entrepreneurs such as Eileen Fisher.
According to Amy Hall, the eponymous brand’s director of social consciousness, Fisher’s travels to less-developed nations made a deep impression on her. She was dumbfounded by the severe signs of water crisis, for instance. “Those are the same places we manufacture our clothes,” Hall said. “[So] when she came back, she had a call to action for us.”
The company has been exploring alternative fabrics, like Tencel — a textile based on wood-pulp fibers — and aims to use 100 percent organic fibers by the year 2020.
Athleta, a Gap Inc. activewear brand tied to fitness and outdoor lifestyles, has a similar pledge: “We reset our mission a couple of years ago to be a purpose-driven brand,” said Athleta’s Sheila Shekar Pollak. Today, more than 40 percent of its product is sustainable, the vice president of marketing added, but the company wants “over 80 percent of our product to be sustainable by 2020.”
Denim production, considered one of the dirtiest processes in the apparel sector, appears to be going through a reinvention as well. François Girbaud, of Marithé + François Girbaud, called out acid-washed jeans in particular as “a crime against humanity — we know it’s a danger now.” The desire to achieve various looks without the environmental cost has led to new processes, such as laser-finishing by companies like Levi Strauss & Co. and others.
On the retail front, Target not only pushes for efforts like eco-friendly packaging, but also for efficiencies in its supply chain. And it readily looks for opportunities to advance “circularity” in retail.
It may sound like a buzz word, but proponents of the circular economy use it as a short-hand to describe the push to recover, regenerate and reuse materials and products. The model not only helps the environment, but consumers as well.
Jennifer Silberman, Target’s vice president of corporate responsibility, believes that circularity can also help customers solve problems: “We’ve seen great momentum in some of the guest engagement models, like the car-seat take-back program,” Silberman said. “Guests had these car seats piling up in their homes. So we really answered a guest friction point. And by the way, there was this great sustainable story.”
Going forward, the future of sustainability looks bright. The same creativity that inspires fashion designs — like Asher Levine’s nature- and cellular structures-inspired motorcycle jacket — and newer, smarter smart garments drives today’s sustainability movement.
Innovation in design, fabrication and production run the gamut, from the use of 3-D printers to make prototyping more efficient to research into fabrics based on bio-engineered material. Right now, scientists, designers and companies are exploring textiles based on spider web silk and leather-replacements forged by dried mycelium or mushroom composition.
Rethink: How to Drive Business Forward
As makers, scientists and artists consider new forms of design, research and production, business types are looking closely at new opportunities.
The retail sector looks to artificial intelligence, big data and blockchain technologies as the future of their businesses. AI’s bid to reinvent how companies cater to personal preferences, and blockchain’s ability to authenticate and certify premium goods have been a driving force of conference room conversations, as well as national headlines, for the last few years.
Like the Remake sessions, ReMode’s nuts and bolts Rethink track also took on sustainability. It can certainly make brands feel better about the work they do. But it can also work as a sound business strategy — if implemented and messaged properly.
“I try to move it away from compliance,” said Mazar’s Richard Karmel. “As long as it’s about compliance, there’s very little value.” In other words, there needs to be a shift in thinking and communication, and effort to move the conversation away from something that sucks resources and costs money to a growth area that can drive revenue.
The White House administration’s efforts for environmental deregulation may have had one intriguing side effect — it appears to have rallied opposing forces and raised the level of eco-awareness. In that climate, a company dedicated to responsible sourcing and manufacturing can connect with modern consumers in a powerful way.
“It’s sustainability, not just from a product perspective or storytelling perspective,” said Marie Chassot, head of Richemont’s Baume Watches. “But from a consumer engagement perspective.” Translation: It’s not about gimmicks, but authenticity that drives quality. For the luxury sector, the focus on quality is a must.
It also doesn’t hurt to have the backing of the company’s chief financial officer, said Karmel. “If you’re going to embark on the sustainability track, it has to be embedded in your strategy,” he added. “Make sure your cfo is your friend.
“He controls the pursestrings,” he added. “And if he doesn’t understand, you’ll get nowhere.”