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On a Saturday afternoon at 403 Bleecker Street, home of the Marc by Marc Jacobs women’s store, a fortysomething woman, shopping with her two tweenish daughters, is standing by the door, looking a little scared. “This is crazy,” she says. “This is just crazy!” Staff aside, the three of them are just about the only people speaking English in the store. There’s a quartet of Japanese girls huddled around the tote bags up front. A French couple assesses the ready-to-wear, while a group of Brazilians digs through the T-shirt display and two Nordic women pace the store with rubber rain boots in hand. A quick head count totals upward of 50 people in less than 1,800 square feet of sales floor space.

This story first appeared in the November 9, 2010 issue of WWD. Subscribe Today.

A steady stream of half as many customers had circulated through the store two weeks earlier, on a Friday. It was enough to prompt this reporter to remark how busy it seemed, only to be corrected by a manager. “This is dead,” she said. “Come back on a weekend; there won’t be anywhere for you to stand.”

The scene on Saturday is a claustrophobic’s nightmare and a retailer’s dream, which, in this case, belongs to Robert Duffy, who’s known less as a retailer in the traditional sense than as the president of Marc Jacobs. Duffy has been Jacobs’ business partner since 1984, through the Perry Ellis days and up to and including Marc Jacobs collection and Louis Vuitton. But Marc by Marc is Duffy’s baby. A decade after its launch, the secondary line has 161 freestanding stores, plus several hundred wholesale accounts and what Marc by Marc Jacobs president Carolyn Risoli calls “double-digit growth” from day one. In honor of the 10-year anniversary, a capsule collection, pictured here, of greatest hits from the women’s and men’s collections is being reissued for spring. The business is wildly successful, which makes it hard to believe that Duffy struggled to get the project green-lighted in the first place.

“After our partnership with LVMH, I really kept pushing the issue with Mr. Arnault [Bernard Arnault, chairman and chief executive officer of LVMH],” says Duffy. “Most people [at LVMH] didn’t understand it, because LVMH was a luxury group and, I mean, that’s what they do and that’s what they do really well. There was a lot of resistance to it. I had to pitch it to everybody underneath [Arnault], and everybody said no.”

Finally, Duffy got a private meeting with Arnault and convinced him that there was money to be made in the contemporary market. What made Duffy so certain this was a bankable business was the company’s young demographic. There were the 20-year-olds buying $3,000 collection dresses in New York, but more formal data came from focus groups at a Midwestern mall held during the company’s first fragrance launch. Outside of New York and Los Angeles, the name Marc Jacobs resonated with teenagers and young adults, who had seen photos of Jacobs with musicians and bands — Nirvana, Sonic Youth and the like — taken during the heyday of grunge. “It was something that I knew that I think took everybody else by surprise,” says Duffy. “I don’t know if that information had ever been passed on to Mr. Arnault, but he was the one that gave it the blessing.”

Meanwhile, Arnault wasn’t the only one who needed convincing. “Marc doesn’t like change,” says Duffy. “He was completely stressed out, so going through the process was a little difficult.” A secondary line meant Jacobs was responsible for three full collections in women’s wear alone each season — daunting by anyone’s standards. But Duffy felt the firm had a strong enough creative team, including the stylist Venetia Scott, who has consulted on the collection since its launch, to execute the vision without monopolizing Jacobs, who had final approval. And Duffy claims to throw his own two cents in designwise. “At that point, I had had enough design experience with Marc, just working with him over the years, that I also could get involved with it.” (Junhee Kim is the line’s current designer.)

While wholesale was robust from the start, and grew quickly into a global business, Marc by Marc Jacobs’ own network of stores has made for a fascinating retail model. It started in New York’s West Village, on the corner of Bleecker and West 11th Streets, where Duffy has gradually built the most idiosyncratic of flagships: an enclave that now stands at six individual stores, the most recent a Bookmarc that opened in September. A similar setup thrives in Los Angeles, where there are five stores in the same vicinity on Melrose. Duffy likes to point out that, when he arrived on Bleecker, Melrose and Fillmore in San Francisco, there was little to no local retail activity. Yet all have become busy shopping districts with a sort of “where Marc Jacobs goes, they follow” scenario that applies to Ralph Lauren, James Perse and Intermix, all of which have become reliable neighbors. Still, if the Marc Jacobs store circuit has rejuvenated the areas, Bleecker in particular, not all the locals are thrilled about it. “Is it good for the neighborhood, bad for the neighborhood? I don’t know,” Duffy said when Bookmarc opened. “I didn’t ask everybody to follow me there.”

Duffy sought out the Bleecker location, originally a dentist’s office, partly because he lived in the neighborhood and knew what the footfall would be. “A younger person in their 20s is usually living in an area where I would open a store,” he says. “They’re not living near Rodeo Drive, and they’re not living uptown on Madison Avenue or Park Avenue or Fifth, whatever.” But he also chose it because he knew that LVMH wasn’t going to part with a major investment for a store. During one of Arnault’s visits to New York, Duffy took him to see a space in the West Village, which became a men’s collection store for a hot minute. “I got in his car and, of course, 20 other people got in other black cars behind him to follow him,” says Duffy. “I showed him the corner and, in typical Mr. Arnault fashion, he said, ‘I don’t think it will be very expensive, do you?’ ”

At the Bleecker Street women’s store, $1.5 million was a number overheard for the previous month’s sales, a figure Duffy will neither confirm nor deny — LVMH does not comment on sales figures — but he points out that that “may be just one store, but combined, a lot more, and there’s been a lot of those months.” The New York stores are, he says, “a gold mine.” They turn the highest volume and set the tone for the company.

He says he’s long been passionate about retail. “I always wanted to work at Bergdorf Goodman, and I did,” recalls Duffy, who worked in what was known as BG, the equivalent of a modern contemporary floor, during the early Seventies when Andrew Goodman was still running the store. “That’s where I learned it, because he was on the floor every single day. I saw that and thought, this is so cool. He had this huge store, but he really did know what people wanted. He would go to Europe with his buying team and literally say, “This is for Mrs. So-and-So and Mrs. So-and-So.”

The Marc by Marc stores are open until 10 p.m., because Duffy would stop by every night on his way home from his SoHo office to see what was selling and what wasn’t. “If I was there, we might as well keep the doors open,” says Duffy. He added men’s wear, a big moneymaker for the company, in 2001. As the business grew, his own stores had to compete with department stores and their markdowns. In order to give his stores an edge without going on sale (Marc by Marc stores never do), Duffy started offering specialty T-shirts, such as Stinky Rat, which grew into its own offshoot of men’s. When the market trended toward an even lower price point, rather than partner with mass retailers like Target or H&M, Duffy created a still lower-priced lineup known as Special Items, or “stuff,” as he calls the merchandise under the “Jacobs by Marc Jacobs for Marc by Marc Jacobs in Collaboration with Marc Jacobs for Marc by Marc Jacobs” label, including lipstick pens, tote bags, condoms, flip-flops and rain boots. With those, the Marc Jacobs experience can be had for as little as $1, the cost of a rhinestone bubble ring.

All of it, says Duffy, was born out of his instinct for how people dress. “Like, I may wear a designer eight-ply cashmere sweater that I’m willing to spend a couple thousand dollars on,” he says, thumbing the neck of his presumably eight-ply cashmere sweater, “but I don’t want to spend $300 for a pair of jeans. And I’m not going to.” (Marc by Marc denim ranges from $128 to $228; dresses average $350, with the collection topping out at $800 for specialty pieces.)

He continues, “It’s almost like a public service. I know what it costs to make a rain boot. I could charge $800 for them, and people would buy them. Or I could still make a lot of money and be fair.”

Between the T-shirts and trinkets, the Bleecker store has the air of a souvenir shop, thanks in large part to the flocks of tourists — mostly Chinese, Japanese, Brazilian and Australian, according to the store’s staff — who are unloaded from the “Sex and the City” bus tour at Magnolia Bakery, at 401 Bleecker. They get their cupcakes and then cross the street to shop for handbags, key chains, and the like. (Cupcakes are no longer allowed in the store because “there would be frosting everywhere,” deadpans one sales associate.) Duffy estimates that the special items make up 20 percent of the business.

Aside from savvy merchandising, Duffy credits his staff with the stores’ success. In the beginning, he handpicked everyone and set up what has become a veritable retail vo-tech program, with people starting as doormen and working their way up to manager or corporate positions. Duffy met his West Coast manager, David Doidge, when he was skateboarding down the street and stopped in front of the windows. “He’s like, ‘It’s so cool, I love your windows,’ and we started talking. Now he manages all our stores on the West Coast,” says Duffy. “I just said, ‘Do you want a job?’ because he totally related to what I was doing.” There’s very little turnover in the company. Jobs are in demand, particularly in New York, where heavy traffic plus commission can make for a happy workforce. Managers and top sales people are flown to the runway shows and whichever far-off location where the latest store is opening as a reward. Over the course of a few hours at the Bleecker store, at least four people come in with résumés, though new hires are often found by word of mouth. But should they get placed, there’s a good chance they’ll move up in the company. Outside his office at 72 Spring Street is a room full of young staffers, which Duffy waltzes through, pointing out that she came from Bleecker, he came from Paris, this one from L.A. “Every single person in that room has worked in our retail stores.”

Duffy likes to say that the entire Marc Jacobs business “has been a start-up for 26 years.” No matter how successful, he and Jacobs retain a bit of the aura of perpetual underdogs with something to prove — including the burgeoning retail side of the company. With that he turns the conversation to Marc Jacobs collection. “I still don’t have a New York flagship,” says Duffy, at least not at the moment. He says a Madison Avenue outpost is forthcoming, though WWD first reported plans for it in 2001. The money is there, the location scouted, the plans for asbestos removal are underway. There will even be a restaurant, possibly to be called Marc’s Café. Just don’t ask him when it will open.