Little more than two years after launching the online men’s wear company Frank & Oak, cofounders Ethan Song and Hicham Ratnani have moved off-line in strategic fashion to simplify shopping for Millennial men.
Thanks to a recent infusion of $15 million led by Silicon Valley’s Goodwater Capital, the Montreal-based e-tailer, known for its slick magazine format, monthly, in-house designed collections and e-commerce interface with 1.5 million active users, opened its Canadian flagship in November in Toronto’s Queen Street West district.
The move, according to chief executive officer Song, 30, wasn’t an either-or proposition. “Having these multiple channels is good for business. That’s the bottom line,” he said.
It also reflects the company’s ambition to provide a fully integrated shopping experience to its 25- to 35-year-old target customers and parallels the move of an increasing number of e-tailers, from Bonobos to Warby Parker, to expand further into the brick-and-mortar world.
“Our goal isn’t merely to sell goods to Millennials. We want to be their lifestyle adviser. The Toronto storefront contributes to that vision,” said Song.
This is not Frank & Oak’s first foray into the Toronto market. In 2013, the company opened its first pop-up shop on Queen Street West from November to early January, to take advantage of the holiday season. The company, which currently receives 35,000 online orders a month and makes 70 percent of its sales in the U.S., also opened its Montreal storefront, Atelier, in 2013.
Like Atelier, Frank & Oak’s 2,600-square-foot flagship in Toronto showcases monthly capsule collections, priced at $50 or less, with the same visual punch that has attracted online followers since the company’s launch in February 2012.
The Toronto location is equipped with a barbershop and café and features the type of technology that Millennial consumers have come to expect.
“The technology is there to use when and how consumers want,” said Song.
Shoppers can log onto their accounts to view past purchases or search out previous favorites to find the same fit in newer collections. They can also go online to book shaves, haircuts or free, 30-minute style consultations.
“The point is that we know who the customer is when they come in. It’s personalization like this, not receipts, that builds the relationship we want with customers,” the ceo said.
With more Canadian launches slated for 2015 and in the U.S. within the next two years, Song and Ratnani plan to use the new flagship to explore the idea of treating future stores as a living space and local hangout for customers.
“There’s an interesting thing going on in today’s retail world,” noted Song. “Everything is going to digital, yet we’re finding that people crave community. They want to talk to real people who understand them when they shop. They also like the idea of a local store where they can find what they want, hang out and feel like they are part of something bigger.
“That’s why we chose Queen Street above any other location in Toronto. It’s got that creative sensibility and sense of community that speaks to our clients,” he added.
That recognition impressed early-stage investor Goodwater Capital.
“What really grabbed me was the technology behind this operation,” said Chi-Hua Chien, the cofounding managing partner at Goodwater. “More than a quarter of their revenues come from mobile. The company has clearly built a strong platform across the Web, with mobile and now in its stores,” said Chien, who discovered the brand through friends.
The company’s focus on good design at a good dollar value was equally impressive to Chien.
“When we first met, I remember Ethan showing us the monogram on their sweatshirt hoods and the buttons on their shirts. Everything I saw was unique. It became very clear, very quickly, that these partners had built something that resonated deeply with their target demographic,” said Chien.
From Chien’s perspective, Frank & Oak has the potential to become “the go-to brand for Millennial men,” even as they mature and move into their child-rearing years.
“Six months ago, these two guys were primarily doing shirts and outerwear. Now, they’ve started doing bags, shoes and home items in limited runs. You can see where this road will go in terms of lifestyle-brand appeal,” said Chien.