Marc Jacobs is finding himself in a familiar place — in the news.
This story first appeared in the March 23, 2015 issue of WWD. Subscribe Today.
As reported on Thursday by WWD, the company will cease production of the Marc by Marc Jacobs label and assimilate that collection’s product range and price points into the signature Marc Jacobs collection. While this is the first tangible merchandise-centric step in an ambitious plan to grow the company in anticipation of a possible IPO, it is in fact part of a process that has been underway for some time.
When WWD spoke with Jacobs, Bernard Arnault and Robert Duffy in October 2013, just before Jacobs showed his last collection for Louis Vuitton, LVMH Möet Hennessy Louis Vuitton owned the Marc Jacobs operating company while Arnault, Jacobs and Duffy each owned one-third of the trademark. Since then, LVMH acquired a controlling interest of the entire company. Though no one involved would confirm specifics, according to sources, LVMH now owns 80 percent of the Marc Jacobs brand with Jacobs and Duffy holding the remaining 20 percent in equal measure. Last fall, Sebastian Suhl started at the house as chief executive officer. With Suhl’s arrival, Duffy stepped back from the day-to-day operations while remaining Jacobs’ equal partner in the business.
In separate interviews, Jacobs, in person at his Spring Street studio; Suhl, by phone from Paris, where he is attending LVMH meetings, and Duffy, vacationing with his daughter in Nevis, addressed some of the changes under way.
“In a sense, we’re starting at the beginning,” Jacobs said, referring specifically to the Marc by Marc news. “It sounds like a musical.” The next line was inevitable, recited in unison by himself and an interviewer: “a very good place to start.”
Perhaps the biggest development — after the change in ownership — is something that has been evolving quietly for some time: Within a partnership of 32 years and counting, Duffy’s role has changed, and that change is of considerable emotional weight for both him and Jacobs. “First and foremost, Robert’s my partner,” Jacobs said, recalling the well-known story of their meeting, when Duffy contacted him immediately after seeing his brilliant senior show at Parsons. “It was Robert’s belief in me then — that’s why I’m still here….From those very early days of Sketchbook, we said whatever happens, you and I are partners. And the most important thing to me is to know Robert is my partner.”
A partner who’s made the decision to step back, his reasons two-fold. First: The big-eyed, curly-haired Victoria. “I’m nearly 61, a single parent with a three-and-a-half year old,” Duffy said. “I want to be full-time parent.” He also saw that as the brand’s overall revenues approach $1 billion and the company contemplates an IPO, it should have a ceo with deep, multibrand experience who could reorganize the company “from the bottom up.” “From the bottom up, Suhl,” Duffy said, “is extremely smart. He has the courage and it appears that he has the stamina to do it. He’s still young and he has the drive, the ambition.”
Yet, experience with past ceos indicated to Duffy that as long as he remained a daily presence at the company, there would be some staff confusion. “With the exception of IT and finance, they were all hired by me,” Duffy said. “If I’m here, they’ll come to me first.” Duffy remains deputy chairman of the board, with voting rights, and on the boards of Marc Jacobs China and Marc Jacobs Japan.
The Marc by Marc move is the first under Suhl’s watch.
“I want to make incredible fashion,” Jacobs said. “I want to figure out a way to make that incredible fashion available to people on different levels.”
As originally conceived, Marc by Marc Jacobs was intended to aid in that process. At the time of its launch, the line was more item-driven with a clear connection to the main collection. To that point, its label wasn’t Marc by Marc Jacobs. The Marc Jacobs label is “Marc Jacobs” in white on a black background. The first label for the off-shoot line was the same black background with “Marc” in white and “Jacobs” in light gray, as if faded or blacked out. “Marc-no-Jacobs,” the designer calls it. That didn’t work out for editorial credit purposes; magazines were stumped by the same name in two tones. Legally, a change to the stand-alone “Marc” wasn’t possible; it was already taken.
“The intention now is no different than when Robert and I started Marc by Marc Jacobs or Marc-no-Jacobs,” Jacobs said, using his nickname for the original label. “We believed that fashion could exist at lots of different prices. It could be flip-flops for $30, a well-priced T-shirt; there could be an honesty and integrity in different types of clothes. It wasn’t supposed to be a second line or the poor-relative-of. I’m sitting here in a $2,000 cashmere/silk sweatshirt hoodie that we’ve made for 15 years and Adidas track pants and a cotton shirt from American Apparel, and I have a Prada fur coat upstairs. I think as myself as a fashion customer, and I know on a daily basis I will wear everything from American Apparel to Adidas to Marc Jacobs to Prada. I love that mix of things, that high and low, that rich and poor, all of those contrasts, the everyday and the extraordinary.”
Certainly, the original “Marc-no-Jacobs and the early “Marc by Marc,” as it became known, created monstrous excitement at the contemporary price point. When the Marc by Marc store first opened on Bleecker Street, it was a temple for fashion-loving types from closet assistants to celebrities. “There were cool jeans, a cool jean jacket. There were great T-shirts. There were the military-inspired jackets but they were done in denim or washed cotton velveteen or whatever I felt,” Jacobs said. “The aesthetic felt more connected to what we were doing in collection.”
At some point, pragmatism won out, and the label was changed to its own entity, a move that Jacobs noted, “once upon a time felt like a good idea and it worked.”
Along the way, it became a collection unto itself, with little connection to the main collection — a process that began well before the appointments of Katie Hillier and Luella Bartley as creative director and women’s designer, respectively. The line also lost its uniqueness in its category as contemporary exploded. “We’ve gone through many different ways looking at what it was initially and how it had gotten away from that, and I think again we’re back to that same thing,” Jacobs said. “The way to do it is that this is under one label.”
Asked where the idea came from to merge the two collections, Jacobs said, “it just feels like we aren’t doing that job by showing two different collections with two different messages,” while stressing that he has “absolutely enjoyed the last few seasons of the Marc by Marc Jacobs’ young, cool, hip shows” designed by Hillier and Bartley.
When he spoke with WWD in 2013 about long-term plans for the Marc Jacobs brand, Arnault noted the need “to put in place the organization, and to complete the business plan, which requires retail organization, retail investment and more products.” While discontinuing the label responsible for roughly half of the company’s revenue seems counterintuitive to that goal, Suhl stresses that in fact, the contrary is true. The company remains committed to continuing the “core price range” of Marc by Marc. In addition, Suhl noted a great deal of “white space” between that range and the luxury pricing of the Marc Jacobs collection. “We’re not in all kinds of price ranges,” he said. “For example, our price range for bags is approximately $350 to $500 retail. Today we have almost no presence in price points above $500 in contemporary. There’s a market out there for that. I’m not saying it’s going to be a majority of our market. It might be low double-digits, low penetration, but there’s a big opportunity there. We also have the opportunity to live in the advanced contemporary [with clothes]. There’s no reason we should have some price points there as well.
At the other end, Suhl sees room at the designer/luxury level: “Often, we’re on the higher end of luxury. There are many price ranges. That’s big business opportunity.”
As for staffing, Suhl said increasing the product range will mean a larger design staff. Prior to her appointment as creative director, Hillier had a long-term relationship with Marc by Marc. She is highly regarded within the company and is expected to stay on with a significant role. It is unclear whether Bartley will remain. Otherwise, “our headcount over the next year or two is going to increase overall,” Suhl said. “That doesn’t mean the exact same people will always be here. But this isn’t about synergies and restructuring. This is about operating better.”
For his part, Jacobs says bring it on. It’s no secret that he has spent the lion’s share of his time focused on the higher end of the Marc Jacobs fashion range. He anticipates that with this new, broader-spectrum approach he and his design team will work more closely with merchandisers on a regular basis. “Working with Mr. Arnault was like working with a merchandiser to a certain extent,” Jacobs said. “Mr. Arnault would say something about being in a shop of another brand and seeing something at a good price. I said, ‘you know what? I’m a very good creative problem-solver. If you tell me that somewhere there’s a canvas bag at an entry price, let me come up with my version. Give me a problem and let me come up with my solution to it.’ I don’t wake up in the morning wishing for that project — but given it, I’m not bad at it. I think that’s part of my American or New York design training, of working here and going to Parsons. The idea of solving a design problem is very creatively rewarding. Let me see if I can come up with a solution that I feel good about, that says ‘us.’”
Retail is another area of immediate focus. Jacobs is in the initial stages of planning a redesign of its stores and showroom. He has a passion for interiors, furniture and art, and is eager to apply his personal knowledge in a significant way. “It’s what I really love to do,” he said. “I’m spending quite a bit of time, and I’m so inspired by the opportunity to being able to do that.”
He is unwilling as yet to articulate a specific vision, except to say that he would love the opportunity to make the company offices at 72 Spring Street a visual expression of the firm’s aesthetic. “You have Balthazar nearby,” he said. “I would love to walk here and maybe there are potted plants outside and a doorman who lets you in. I’d like a very particular type of floor, beautiful in those elevators. I’m not looking at Halston and the Olympic Towers — I’m not that guy. I would like our version of that. I’d like to work on defining our world when you come in to this office. Robert and I never had the chance to do that.”
He also would like to create at least a vague template for stores around the world that would reflect various collaborations with artists and furniture designers. And that may change seasonally, as with the freshly painted pink facade on the Mercer Street store in New York.
That store, the company’s first, remains dear to him. “Robert and I were fired from Perry Ellis after the grunge collection. We didn’t work for a year. We got drunk one night on red wine at, I think that restaurant on Commerce Street, and we decided to take the lease out on that store at Mercer Street, which had once been a gallery. We had the money to take the lease but we didn’t have the money to make the clothes. The only thing we did was we made shopping bags.” They had an empty store for a year, until they Arnault signed Jacobs to do Louis Vuitton. “Mr. Arnault said, ‘keep the store, go ahead go with it and I will help you and support you,’ and we started producing clothes for that store. So that store is a very important place for me and for Robert.”
Jacobs pointed out that their instincts were right: “Originally, there was our store and the Mercer Hotel. Now there is Balenciaga, Prada on the corner, Marni next to us, Versace across the street. So there is something to be said for instincts or whim, whether they are drunkenly inspired or otherwise. But it wasn’t shooting an arrow up in the sky and seeing if it came back to you. We believed this little garage on Mercer Street could be a great first store.”
Suhl agrees that the location is important to the brand’s identity. By early next year he expects to open or re-design one or two template stores, with Mercer likely the first. The brand holds the lease for the entire building, and, with a redesign, he said, can make better use of windows and natural light while doubling the selling area by taking over second-floor office space.
Beyond that, retail is a major focus. Between wholly owned and franchises stores, the brand has 200 stores around the world in addition to wholesale accounts. An evaluation is underway regarding where to expand or relocate, and what to do with Marc by Marc locations. “We have loads of opportunities to operate and open more stores, but I think the main focus is really getting the concept right, the product right under a unified store concept,” he said. “And, very importantly, professionalizing, reinforcing the retail team internally both at headquarters and in local markets around the world. That’s something we’re doing right now, we’re putting together a really strong team.”
While the Bleecker Street, New York and Melrose, Los Angeles store clusters are under review, Suhl said that he likes the concept of multiple stores, particular in the West Village, and considers Bookmarc an off-beat and delightful concept that can be expanded. “We not going to pen up thousands of bookstores, but it can be expanded.
At approaching $1 billion, the company still has ample growth possibilities. Suhl points that Marc Jacobs is the only American brand that does more than 50 percent of its business abroad, a fact that goes both ways: Jacobs has an impressive international profile and still plenty of growth room at home. Specifically. Suhl thinks U.S. malls present a “glaring opportunity.”
These days, when any company talks about growth, accessories are at the top of the list, and this is true within Marc Jacobs. Yet the designer maintains that accessories, and bags in particular, aren’t what they used to be. “I don’t think we’re in the It bag cycle anymore,” he said. “Even that term feels old. We’ve been through the It bag at Vuitton, the It bag from Marc Jacobs, the It bag from Céline. Now it doesn’t seem like it’s an It bag kind of moment. Of course, we’ll always pay attention. Accessories will always be easier than clothes because clothes can require a body type — but I definitely think it’s not the same.”
Jacobs suggested that bags and shoes have become a default category to cite as a growth potential, and noted other potential paths to big bucks. He pointed out his firm’s success with fragrance — Marc Jacobs’ Coty fragrances are number 12 worldwide, he said with a new, more sophisticated fragrance launching soon — and beauty, done with Sephora. He indulged in a boast about the latter. In a meeting last week,with Sephora’s Kendo group, which produces his cosmetics line, he was informed that on a recent weekend, his line out sold Chanel at Sephora on the Champs Élysées. “Now, that’s not worldwide, but it is Paris on the Champs Élysées,” he said. “That doesn’t mean we’re selling more than Chanel, which we are not, but it’s quite a feather in our cap. Especially in a world that’s very, very competitive, and where no designer recently has been that successful.”
With all of these changes in play, Jacobs is feeling positive and excited. He remains invigorated by the reaction to his powerful fall show, and by his life-long love affair with fashion.
Fashion still compels him, “more than any thing,” he said. “What matters most to me is that exhilaration, that thrill. It is a pleasure-pain principle all the way through. It’s the insecurities, the lack of belief in your instincts and those days of feeling so confident, so good.”
It sounds like one of those spiritual axioms — the reward is in the journey. But it’s also in the destination. It’s absolutely the yin and yang, the black and white. It’s that undefinable thing: You love it, you hate it, you love it.
“Ultimately, there is nothing I would rather do,” he said. “I don’t know why I was wired this way. But nothing turns me on more. Nothing interests me more.”