Shinola and Reem Acra New York were among the companies presenting at the fifth annual Consensus Advisors conference.
The conference on the “The Next Great Consumer Brands” was jointly hosted by Consensus and Nasdaq on Thursday at the NASDAQ MarketSite in Times Square, with Well Fargo Capital Finance as a special sponsor.
Other companies presenting include tween retailer Triple Flip and consignment retailer Second Time Around, formerly branded as STA. Many of the firms presenting are at the stage where they are hoping to get the attention of investors so they can move on some expansion plans. Past presenters in previous conferences include Temperly London, Rebecca Minkoff, Charming Charlie and Xcel Brands.
Shinola made a play to an audience of potential investors at the Consensus Advisors and NASDAQ’s “Next Great Consumer Brands Showcase” on Thursday morning with a presentation focused on its Made in America laurels and exponential growth.
The brand’s chief executive officer, Steve Bock, was in town from Seattle to deliver the address — the first of the conference — telling investors that the brand’s diversified interests, all made with quality in mind, have vastly contributed to its success. Shinola, now with eight freestanding stores, says that its watch, paper, leather goods, and bicycle businesses are all charting toward unprecedented growth.
“Shinola is irreverent, unique, everything we do has a sense of humor — it’s a combination of design, quality, value — and Detroit plays a very big role in that,” Bock said.
Motor City is of course home to the brand’s 60,000-square-foot factory: operations that Bock says are continually expanding. The company has just opened a watch dial manufacturing hub within its downtown Detroit store — intended to service all of the brand’s dials in the near future.
A watch-strap manufacturing operation is also in progress, which Bock expects to provide a massive business opportunity once in service. “Leather watch straps can be made in China for about $3, Thailand for about $4, and Switzerland for about $40. By the time we get this factory up-and-running, and we started exactly a year ago, we expect that we can make leather straps in the U.S. for under $20,” Bock said.
He added: “Who wouldn’t want to buy a quality, crafted leather strap made from leather from the United States? This is another huge opportunity for us.”
While watches remain Shinola’s bread-and-butter, the company says that its other categories are expanding at a rate that have made them equal priorities. Leather goods is a category in which Bock sees immense opportunity — especially since the hiring of Richard Lambertson and John Truex as the line’s design directors.
He said: “Last year [leather goods were] about five percent of our business, this year it’s projected at about 10 to 12 percent, and by next year we expect it to be 20 to 25 percent.”
Bock added: “When we started our watch business, it was obviously at about 95 percent or more. This year it will be about 85 percent and within the next couple of years we expect it to be in the sixties.”
Designer Reem Acra spoke about her brand’s three main categories: bridal, eveningwear and ready-to-wear. She also does a haute couture line. She noted that a couture wedding dress can cost between $100,000 to $500,000, while an evening couture offerings can be between $50,000 to $100,000.
“The consumer is out there,” she said, noting that many of her clients include “celebrities, princesses and first ladies.”
Acra described the Reem Acra brand as aspirational for the global luxury market, but since she is already at the high-end, there is room to add lines that are more accessible. The distribution is currently in 32 countries, with a worldwide store presence in 100 doors.
In bridal, the expansion opportunities are licensing, such as bridal for China; new categories such as jewelry, and home goods in bridal such as tabletop. For the mass bridal market, the opportunities the designer identified are for bridesmaid dresses and accessories. For the eveningwear and ready-to-wear lines, leather goods such as handbags and footwear are options, while licensed products could be done for fragrances and jewelry.
Acra said she grew up with a live-in tailor and designed her own wardrobe. Her first job was working in private label in product development for retailers such as Kmart, Wal-Mart, J.C. Penney and the Spiegel catalogue. “I love luxury, so I quit the mass market and went into interior design,” she said, noting that she got into fashion design after creating a wedding dress for a friend, which ultimately led to an order of 30 wedding dresses for Saks Fifth Avenue and Neiman Marcus. Her Reem Acra New York line was started in 1997, with evening wear added six year later. Ready-to-wear was introduced in 2008.
These days, Acra counts Angelina Jolie, Taylor Swift, Madonna, and Halle Berry as clients.
As for the current state of bridal, Acra said women today want “crop tops and nakedness,” referring to some sheers and bare skin.
Kristin Kohler Burrows, chief executive officer of Second Time Around, spoke about her firm and how they have a goal to expand in New York and Boston and transform into an omnichannel retailer.
The company is about 35 years old, and grew from a single store to over 40 locations. Burrows said the consignment model doesn’t have inventory risk, and a comps metric that grew 8.5 percent in the last six months of 2014. Her firm’s market is the contemporary to luxury categories, with brands featured such as Theory, Vince, J. Crew, Rag & Bone, Michael Kors, Chanel, Dior, Hermes and Prada. The company is able to match product with the customer base surrounding each store location.
Linda Maslechko, co-ceo and founder of tween activewear brand Triple Flip, spoke about the firm’s origins in Canada. The brand offers a mix of activewear and streetwear, as well as accessories and footwear offerings for girls between ages 6 and 14 years.
The company will also do pop-up shops that are open for five days in sites where girls are, such as gymnastics events.
A total of 14 companies presented at the event. One firm, Borderfree, which helps facilitate orders from overseas customers at U.S. retailers and then ships them to their home country, elected not to present given that the company is slated to be acquired by Pitney Bowes for $395 million.
The keynote speaker was Kenneth Langone, the co-founder of The Home Depot. And while Langone spoke about how he founded the big box do-it-yourself hard goods store, he did note that “Amazon makes us a better company,” noting how they sell everything and that lack of competition “makes you lazy.”
Langone also spoke about how over the years, he’s been making bets on people. “Every time I lost, I made a bad bet on people. Every time I won, I had great people.” In the case of Home Depot, the company became a success because of the store associates, he noted.
Langone said he is a believer of mandatory retirement on boards, noting that sometimes “you start to do strange things” when you get older. And while that was intended to garner some laughter from the audience, Langone was quick to differentiate board retirement — “You want to quit while you’re still on top” — from actually retiring from work. “I’m not in favor of retirement,” he said.