Frank and Oak’s new owners have begun to put their mark on the brand, starting with the opening of its first U.S. store in Manhattan’s SoHo.
Last October Unified Commerce Group, a new retail acquisition and advisory group created by Dustin Jones and Greg Freihofner, purchased the Montreal-based lifestyle brand following a bankruptcy filing. Now, after spending a few months stabilizing the business and setting priorities, UCG is ready to “hit the gas,” said Jones.
The first evidence of that acceleration is a 1,600-square-foot store at 252 Lafayette Street that opened quietly over the weekend. Next month, a 3,600-square-foot flagship will open at 93 North 6th Street in Williamsburg, Brooklyn.
At the same time, Nordstrom is adding the Frank and Oak collection of men’s and women’s wear to seven stores on Sept. 1, and Jones hopes to further expand the brand’s footprint with the department store for spring.
Before filing bankruptcy last June, Frank and Oak had operated 22 stores, Jones said, but that number was trimmed to 11 after the purchase. He said the stores UCG decided to retain were all in Canada and were the right size, location, aesthetic and price to fit into the company’s go-forward plan.
Jones said UCG is a company that is focused on data and the numbers showed that Frank and Oak had a strong customer base in the New York market. So the decision was made to expand its brick-and-mortar presence there first.
“New York City is our most important U.S. market in our online business, and we are excited to bring the store experience to our existing New York customers, while allowing many more U.S. consumers to get to know the brand and its mission,” he said.
The SoHo store was designed in a showroom aesthetic, showcasing the apparel assortment alongside white walls, lush greenery and wooden shelves.
Both New York stores will be operated by Leap, a business that builds and operates brick-and-mortar stores for digitally native brands including Mack Weldon, Koio, Birdies and others.
Going forward, the plan is to further expand the brand’s presence in Canada, including a flagship in Vancouver planned for November, as well as move into China sometime later this year.
Before starting UCG, Jones held top jobs at Macy’s as well as Hong Kong-based Fung Retailing Group, where he forged partnerships with Alibaba and developed the Asia Retail Company. Freihofner served as an adviser for Chinese companies and took public the first Chinese company to be listed on the NYSE Amex. UCG also has offices in Hong Kong and Shanghai.
UCG counts as board members former Macy’s chairman Terry Lundgren, Chinese influencer and model Bonnie Chen, Good Charlotte singer Joel Madden, Nicole Richie and others with ties to law firm Clifford Chance, Human at Work and Lever Style Inc.
Jones said Frank and Oak, which he called the company’s “pilot acquisition,” will be the first of a “wave” of purchases UCG plans to make.
The criteria for any purchase, he said, is that the company be attractive to a global consumer, be a purpose-driven brand and be fueled by data and digitization. Frank and Oak ticked all those boxes.
“We loved the brand for a long time but it had fallen into bankruptcy during COVID-19,” he said. However, UCG recognized that it had a good portfolio of stores, a loyal customer and a differentiated product assortment driven by material science. Its owners were “humble enough to accept professional retail” management. Although its founders, Ethan Song and Hicham Ratnani, are no longer involved in the day-to-day operation of the business, Jones said, they remain as ambassadors and have a small ownership stake.
Although the company started as a men’s dress shirt brand in 2012, it grew to become a full lifestyle brand and added women’s, which now represents 50 percent of the business. Frank and Oak had sales of $43 million for its most recent fiscal year and was on track to pull in $53 million before the pandemic. Although Unified didn’t disclose the details of the acquisition, Frank and Oak was valued at $80 million last year with 80 percent of its sales coming from online.
As a certified B Corporation, its primary focus is on providing affordable products that are “good for the planet and good for profits,” Jones said. “Born as a digitally native brand, Frank and Oak has grown to be a highly recognized and trusted brand in Canada for high-quality lifestyle basics that leverage innovation in materials, science and sustainability.”
At the beginning of last year, Frank and Oak revealed new sustainable materials goals for 2022, including cutting all virgin plastic from its supply chain and using only recycled polyester fiber to make its shell fabrics, labels and trims. By next year its headquarters, warehouse and retail stores will run on 100 percent renewable energy, and it plans to increase collaborations with local and international partners to achieve 100 percent offset of greenhouse gas scope 1 emissions.
This mission is also reflected in the brand’s fabric choices which include hemp, kapok, SeaCell, recycled cotton, nylon, wool and polyester.
Among its bestsellers are the men’s work shirt made from kapok fruit, as well as the Seawool sweater for women made from pulverized oyster shells and recycled plastic. Jones said outerwear represents 30 percent of overall sales and the brand sells season-specific pieces as well. In addition, the expansion into women’s intimates in May saw strong results, selling out in three weeks and Jones expects that will represent 5 percent of the business this fall. Swimwear has also been popular for women, he said.
With this wide product assortment for both genders, the plan is to continue to open stores in key markets where the brand has already established itself online. “If we do our job right,” he said, “there will be a significant number of stores.”