Two years ago, Johnny Was went from a family-owned business to a growing enterprise with much larger aspirations.
A little more than two years ago, private equity firm Endeavour Capital invested in the business, setting the stage for the ramp-up that’s happening. Johnny Was will have opened 10 stores, which includes a seasonal Southampton location, in 2017 to end the year with 28 doors. It’s got another 10 on the books for 2018, with a companywide workforce of 250, sales in excess of $100 million and profitability every year since it began in 1987. The line is also in more than 1,500 doors, a mix of department stores, such as Neiman Marcus and Nordstrom, along with specialty boutiques.
The recharged business is being led by executive Rob Trauber — who has clocked time at companies such as Coach Inc. , Cole Haan and Juicy Couture — who joined the business with Endeavor’s acquisition of the company.
“I think of us as a very large start-up,” Trauber said in his office at the company’s Vernon, Calif. headquarters. “We’re an emerging brand that has a big base. People know us from the years of seeing us in specialty stores and Neiman Marcus, but we haven’t had the breadth of stores ourselves or a lot of marketing behind the brand.”
Founder Eli Levite opened the first company-owned store in Santa Monica in 2010 as a means of a sort of insurance for the business following the 2008 financial crisis. The business continued to chug along, but the focus since Endeavor’s entrance has been on taking the family-run business and transforming it into a larger enterprise.
The company introduced a monthly catalogue. Trauber called the catalogue “embracing old-world ideas and new-world ideas” and it stuck, speaking to not only to existing customers, but also new ones. The company’s boosted its digital media spend and two months ago hired data scientists to create a platform that helps it track the effectiveness of its spending. In February, the company will relaunch a web site that gives a boost to the aesthetic, but also improves the navigation. And then there are the stores. Trauber sees plenty of opportunity domestically and potentially overseas, the latter of which accounts for 5 percent of the business today. Trauber would like to see that grow to 20 percent through a combination of wholesale and direct-to-consumer, depending on the market.
Trauber’s aspiration for the business is a lofty one. He said the team is building the next great American luxury company, a bold statement given not only how competitive the landscape is, but also how rapidly the rules are changing.
That the old modes of how to build a brand are becoming outdated in some cases could be Trauber and Johnny Was’ in to nab market share. The company’s taking advantage of the tepid environment around real estate where short-term lease deals are and many of the majors are shuttering large swaths of stores.
In September, the company moved into New York’s Upper West Side in a 1,200-square-foot space with a 45-foot street-fronting presence. November saw the opening of Westfield UTC in La Jolla, Calif., and the Shops at Merrick Park in Coral Gables, Fla. The most recent opening was in Carlsbad, with next year’s stores slated to open in markets such as Palm Springs, Seattle, Philadelphia, Nashville, Manhattan and Dallas.
“I always say ‘OK, the next point’s $200 million and then it’s $500 million.’ Juicy [Couture] was a $500 million brand and we saw what was developed there and they lost their way, obviously, because their customer sort of changed and they didn’t change with their customer,” Trauber said. “We’re very conscious of some of those learnings, too. I feel we’re well-positioned. Four years ago, I didn’t know what Johnny Was was. It’s fascinating.”
The company is celebrating its 30-year anniversary, a feat for a boutique brand that’s quietly built a diverse base. Its wholesale accounts range from the aforementioned Neiman Marcus to Sundance catalogue, with the age of the consumer beginning at 35. These shoppers have an appetite for the company’s intricate embroidery laced across the company’s bags, apparel and shoes — and the pocketbooks to buy. An embroidered kimono might run someone $288, booties $498, a scarf $98 or studded cross-body bag, $320.
“People like Stevie Nicks and Christine McVie actually shop at our store. We are that inspiration of the Seventies rock-‘n’-roll, beautiful embroidered kurtas and that whole category of relaxed, California surf-cool-chick that’s what people aspire to,” said executive vice president of retail Catherine Nation. “It’s a bit rich hippie. Somebody’s coming in, buying three tops and dropping $1,000.”
The company launched a sustainable brand called Calme Organics earlier this year. It also introduced denim and is testing kids’ with a small capsule for holiday. It’s planning on a potential swim launch next year and is also looking at more special occasion.
As Johnny Was (which came from the Bob Marley song of the same name, played on repeat by founder Levite’s kids) pulls on all levers, Trauber is also mindful of moving too fast to the point of losing the customer.
“We have a jewel here that we’re going to build and you hear a lot of buzzwords out there,” he said. “You have Everlane and Warby Parker, and what’s next? Is it the subscription model like Stitch Fix, which just went public? But in the end, you have these great, little brands like us who resonate, who are relevant, who people love to shop. It’s just about being relevant and creating an experience that customers enjoy….Yes, we’re 30 years old, but I’ve been here two-and-a-half years and we truly feel like a start-up heading into another 30 years. We’re about renewal and keeping up and making sure we evolve because we don’t want the woman to open up her closet and say ‘OK, I have all of this.’ Hopefully, knock on wood, the next several years will be amazing.”
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