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Men'sWeek issue 07/25/2013

STAMFORD, Conn. — Shep and Ian Murray learned early on that they aren’t the buttoned-up corporate types.

This story first appeared in the July 25, 2013 issue of WWD. Subscribe Today.

They were only 27 and 23 — just starting out in their careers — when they realized there had to be something more in life than riding the train from Connecticut to Manhattan every day for their 9-to-5 jobs in advertising and public relations.

So they came up with an idea: create neckties “so we don’t have to wear them anymore.”

They quit their jobs on the same day in June of 1998 and launched Vineyard Vines, a company offering whimsically designed neckties inspired by the lobsters, boats and street signs of Martha’s Vineyard, where they loved spending time.

“We left the daily commute to New York City and our corporate jobs in pursuit of the American dream,” Shep has said in relating the company’s background. “We wanted to pursue the things we love, enjoy life and spread the island state of mind by making ties that represent the finer things and places that life has to offer.”

Fifteen years later, that dream has become a multimillion-dollar reality. The company has volume of more than $100 million with a goal to reach $500 million in the near future, and its signature pink whale logo is found on everything from men’s, women’s and children’s sportswear to coozies, coasters and tumblers. There’s a Vineyard Vines-designed line for the Kentucky Derby, and they’ve even created hotel rooms for a boutique New England firm, Lark Hotels.

RELATED STORY: Vineyard Vines Adds Personal Touch to Marketing >>

But getting to this point was hardly a day at the beach. When the brothers started out, they were unable to secure a loan, so they applied for as many credit cards as possible, maxing them out and rolling the debt over from month to month for the first few years. They peddled their silk ties on Martha’s Vineyard, sometimes off their boat and other times out of their Jeeps and backpacks at local bars. Although most people were not interested, they persisted, offering a no-risk, money-back guarantee that the ties could be returned if someone didn’t like them.

They finally got a few local stores to agree to test the ties, and they were in business.

But on July 3, 1998, the day before the company would officially launch, disaster struck. It’s memorialized on the Vineyard Vines Web site as “The night Shep forgets the ties.”

As the story goes, with the first day in business only a few hours away, Ian was on the Vineyard, waiting for his brother to join him with the first batch of ties for the local stores. Shep’s job was to gather the product from the family’s home in Greenwich, Conn., and fly up. Later that day, when the duo were assembling the orders, they realized they were missing the red Martha’s Vineyard Street Signs ties. Shep had forgotten them in Greenwich. “Calls are placed to the dog walker, neighbor, anyone and everyone that might be of some help in getting the ties up to the Vineyard in the next 24 hours,” the Web site relates. “As luck would have it, Shep and Ian’s neighbor on Martha’s Vineyard was a pilot, and when he heard the predicament the guys were in, he volunteered to fly to and from Greenwich, that is, if Shep kicked in for gas. Shep gladly agrees and at sunrise the missing ties arrive and the last order is prepped for sale. They learn one of the most important rules in business — do whatever it takes to make the customer happy, no matter what.”

In an interview in their low-key offices in Stamford, Shep, now 42, and Ian, 38, still live by that rule. But in addition to keeping their customers happy, they have another goal: to keep themselves and their 500-plus employees happy as well.

The company’s motto is “Every day should feel this good” — and this has remained the underlying motivation for Vineyard Vines throughout its history.

“I can’t believe it’s been 15 years,” Shep said, shaking his head. “We’ve been living the dream.”

They admit when they hatched the idea, everyone thought they were crazy. That includes Dan Farrington, general merchandise manager of Mitchells Family of Stores. “When they started in 1998, the tie business was terrible, but they had a simple idea, the ties were well done, and it was just Shep and Ian. They’d answer the phone, put the ties in the back of a truck and drive them to the store. I think we were their second customer. They made personal appearances, hosted trunk shows. It’s astounding how much business we did with them. And it’s been fun watching them grow.”

RELATED STORY: Vineyard Vines Spring 2014 >>

The brothers are proud that despite the trials and tribulations that come from launching and growing a business, the company remains private and has no investors. And everything they’ve done, they’ve done “because we felt it was the right thing to do,” Shep said. “Since day one, we’ve created a culture and a brand that fit our lifestyle. We’ve passed on a lot of opportunities, but we do things because we don’t want to disappoint the team or our customers.”

They joke that when they started, they knew nothing about gross margins or fashion week. “We didn’t have a merchant inside this building until two years ago,” Shep said. “We don’t consider ourselves to be in the fashion world.” In fact, one of the company’s printed T-shirts shows a seaplane landing on the water and the words “We don’t do runways.”

But they knew enough to recognize that ties were a “high-margin product that didn’t require having a lot of sizes or space on the floor,” Ian said.

The brothers credit Mike Gaumer, employee number one and Ian’s fraternity brother, as a key cog in the Vineyard Vines wheel. “Mike is our behind-the-scenes guy,” Ian said. “He’s a great leader and a great listener and a good mediator between the two of us. And he’s good at getting things done. His job is doing everything we don’t want to do or don’t know how to do.”

Shep added, “He was a football player in college, and so he knows how to coach people.” Up until a couple of years ago, Gaumer didn’t even have a title, another indicator of the laid-back attitude of the company, but he was recently named president, a nod to his invaluable contributions to the company over the past 15 years. “The biggest decision Ian and I make is what to have for lunch,” Shep said with a laugh.

His brother, the more serious of the two, said, “Everybody reports to Mike operationally and to us creatively.” Shep added, “Not everyone likes him, but everyone respects him. He’s like our brother, father, grandfather — we adore him.”

By giving Gaumer carte blanche, the Murrays also show their unwavering belief in their employees. “Ian and I step away and empower people to do their jobs,” Shep said. “We have teams that can do the whole job here, so we shape things and they execute it.”

That’s one reason the company has been growing at 35 to 40 percent annually during the past couple of years.

“We’ve learned a lot over the past 15 years,” Shep said. “And we believe in putting the money we make back into the business. We’re simple people. We’re not bachelors in our 20s anymore, but we’re still 20 years old at heart. Our spouses and kids don’t understand what going to work is.”

But, he stressed, that doesn’t mean they don’t take their jobs seriously. “We’re really just now beginning to ramp up and capture the low-hanging fruit,” Shep said.

The brothers recalled that during the recession in 2008, Vineyard Vines’ business was impacted along with everyone else’s. “But that was the best thing that happened to us,” Shep said. “We matured as managers, looked closely at our business and made sure that we not only would come out of it, but come out and be successful.”

And through the tough times, they remained true to their roots. “We didn’t compromise who we are,” Shep said. “Our line is exclusive but attainable. So often in fashion, people are excluded. But Vineyard Vines is a club to which everyone is invited.”

When asked to describe their unique strengths, Ian said he and his brother are “passionate about the business, but I do ridiculous stuff like wrapping trucks in patchwork and making sure there are whale stickers in the stores. Growing up as children of travel writers, it’s all about the details.”

And he said Shep is the more buttoned-up of the two — comparatively speaking. “Shep is talented at making sure the woven shirts and ties are updated so the gentleman is dressed appropriately. I’m more about the kids in college and making sure they have graphic Ts and iPhone cases. It’s a great entry point for the brand.”

Wholesale, the cornerstone of the brand since the beginning, today represents one-third of sales. “We are committed to building our relationships with our department store partners and supporting the loyal specialty shops that have helped grow our brand,” the brothers said. A new shop-in-shop at Bloomingdale’s 59th Street, which the company said has “far exceeded everyone’s expectations,” is evident of this commitment.

Ties remain a hallmark of the label, along with sport shirts. And the Shep Shirt, a quarter-zip polo that mimics a model Murray bought in Switzerland and wore every day in college, has also been a phenomenal success. “The original was purple and green,” Shep said, although there’s a rainbow of colors offered now.

“Our bottoms business is also huge,” he continued. “Our shorts and pants, our wovens and knits and bathing suits — we dress people for every event.”

But there are no plans to go into more tailored offerings. “We do ties and blazers, and we invite you to take a relaxed state of mind with you when a tie is necessary. We’ll get you to the country club, but that’s it,” Shep said.

Men’s continues to represent 55 percent of sales, but women’s wear, now 35 percent, is definitely on the upswing since a new women’s designer, Meg Velleca, came on board last year to revamp the line. Kids and “other,” a term that includes home and the other logoed products, account for the remainder.

In addition to its wholesale collection, the company also has a big retail presence. Vineyard Vines operates 35 full-line and outlet stores, six with retail partners and retail also represents one-third of sales.

Fittingly, the first unit opened on Martha’s Vineyard in 2005 and the next year, another made its debut in their home town of Greenwich, in partnership with the Mitchell family. The first West Coast unit opened at Fashion Island in Newport Beach, Calif., in 2011. Three stores have already opened this year, and another three are expected to open in the third quarter with potentially more in the fourth quarter. In fact, this marks the biggest year of retail growth in the company’s history.

“We think we can easily have a couple of hundred stores in the U.S.,” said Ian.

The brothers credit the Mitchells with “helping us launch our retail platform.” Because the Mitchells are considered specialty store royalty and are also a family business, there was a lot they could teach the Murray brothers. “Russ and Bob [Mitchell, copresidents of Mitchells Family of Stores] are a prime example of the next generation of a family-owned company making the business even better. They’re both extremely good at what they do, and they’re brothers,” Ian said.

The Mitchells ran the Vineyard Vines store in Greenwich for three years until the Murrays bought it back in 2009. “It could have gone badly, but it didn’t,” Ian said. “We’re still great friends.”

The Murrays continue to have partnerships with the Levy family of Memphis’ Oak Hall fame for its stores in Birmingham, Ala., Nashville and Memphis.

“We were lucky,” Ian said. “We started our business with the old-school haberdashery men’s stores, and we’ve learned a lot from them.”

Vineyard Vines is also focused on building its e-commerce business, which has grown to account for the remaining one-third of the company’s sales. In April, the company moved to Demandware, a cloud-based platform, and business this year is up 58 percent. In December, the firm rolled out the second phase of its omnichannel program, which allows online orders to be fulfilled from retail store inventory, and enables store customers to place Web orders on iPads within its retail locations.

Other avenues for expansion include golfwear. Vineyard Vines sells to 500 green grass shops nationwide, including 50 of the top 100 courses, according to Golf Digest. It has been featured at the U.S. Open for seven years, and the brothers see “great potential” for further growth in this channel. “It’s a very labor-intensive business,” said Ian of the custom products the company produces for the pro shops. “There’s not a lot of volume in each one, but it’s the right audience.” For spring, the brand will expand into the technical side of the business for the first time.

Earlier this month, the company signed a three-year contract renewal with Churchill Downs to be the “Official Style of the Kentucky Derby” through 2016. “We’re always looking for new opportunities for people to come to the brand,” said Ian. “And this is like Christmas in May. It creates a need to shop Vineyard Vines. There are frat boys in the infield sliding in the mud and high society in the luxury suites. It’s opened up a lot of doors for us.”

The brand also has deals with Major League Baseball, the National Football League, the National Hockey League and collegiate licensing.

And down the road, international expansion is also in the cards. “Not now, but we’re definitely looking into it,” Shep said.

Would the Murrays ever consider selling their brand or going public? The answer is that they don’t have an answer.

“At some point, we’re going to have to figure it out,” Ian said. “We’re starting to have those internal discussions and talking about what we want for our families. This is no longer a bootstrap business.”


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