Get ready for Theory 3.0.
In a changing of the guard at one of fashion’s leading contemporary firms, Andrew Rosen will step down as chief executive officer of Theory and will be succeeded by Dinesh Tandon, currently chief operating officer, effective April 1. Rosen’s title will be founder and adviser.
After running the business he cofounded 22 years ago, Rosen believes that change and a new perspective will be good for Theory, a brand that exceeds $1 billion in global sales and is profitable.
In an interview Tuesday that ranged from his successor to the digital business to domestic production and horse racing, Rosen clearly took pride in what he has accomplished at Theory. He sees Tandon’s main strategic thrusts as enlarging the company’s direct-to-consumer businesses and becoming better marketers, digital operators and retailers, which will help the wholesale business at department stores as well.
“I founded the company, and I think there’s a lot of strength with having a ceo who’s founded the company and has been around 22 years, and I also think a change in perspective for the company is not a bad thing. I think that for our company to move forward into the future, it’s obviously at some point in time going to have to change, and I think this is a good time for it to be happening.
“I feel very comfortable about where our company is, and I feel very comfortable about Dinesh coming in, and I believe that Dinesh is going to do some amazing things. He’s different than me. This is going to be a real change for the company,” said Rosen, 62.
Tandon, 45, joined Theory in 2013 as ceo of the Greater China and Southeast Asia market, based in Hong Kong, where he oversaw aggressive business growth. He was named chief operating officer and relocated to the company’s global headquarters in New York in 2017. He will work closely with both Rosen and Kazumi Yanai, Theory chairman, to ensure a successful transition. Tandon’s successor as chief operating officer has yet to be named.
Tadashi Yanai, chairman, president and ceo of Fast Retailing, parent company of Theory, said, “I wish to thank Andrew for his significant contributions to Theory and the Fast Retailing Group over the past 10 years. I am pleased to see this succession in leadership as Andrew begins a new phase of his career, and I am confident that Dinesh will build on his solid experience at Theory and demonstrate his capability in powerfully evolving the company’s global business.” Tadashi Yanai is the father of Kazumi Yanai, who has served as Theory chairman since 2012.
Theory was cofounded by Rosen in 1997 and acquired by Fast Retailing in 2009. Besides Theory, Fast Retailing’s holdings include Uniqlo, GU, J. Brand, Comptoir des Cotonniers, and Princesse tam.tam. Fast Retailing had global sales of about 2.13 trillion yen, or $19.25 billion, for the fiscal year ending Aug. 31, 2018.
In addition to pioneering the contemporary space, Rosen has gained a reputation as a sort of Medici of fashion, lending support to fledgling companies and designers both as an adviser and, personally, as an investor.
“This is an exciting time for Theory and for me personally,” he said. “I am incredibly proud of having created this company, this brand and this culture. My new role will allow me to provide mentorship and advice to the team at Theory, and will also give me an opportunity to pursue other interests and passions within and beyond the industry. I am grateful to Mr. Yanai for the leadership and support he has shown to the company over the years.”
Elaborating on the change, Rosen told WWD, “This is something that Mr. Yanai and I have been talking about for a long time, even though it comes across as sudden now. Mr. Yanai and I have spent a lot of time talking about succession. I think it’s something that’s very natural for our company to be doing. I am still going to be continuing as the founder of the company and an adviser of the company. I’ll still have my office and will be headquartered here.”
In a letter to employees, obtained by WWD, Rosen said he created Theory with a dream to make “modern, sophisticated clothes that would matter to a new generation of consumers.”
“As ambitious as I was, I could never have imagined Theory would become such a global success. I could never have imagined what a powerful culture and philosophy the company would come to manifest, or the passion and dedication we would collectively demonstrate in making its mission a reality. I always wanted to create a company that its people could be proud of. We accomplished that,” he wrote to employees.
He said he planned to hold town meetings across the company on Wednesday to express his gratitude for the employees’ hard work and commitment to Theory and to him.
In his new role, Rosen anticipates he’ll have time to pursue his professional and personal interests, which range from investing and advising other fashion companies, to breeding and racing horses. He expects to spend half his time advising Theory. “That will vary depending on what’s needed, maybe in the beginning, a little more, but as time goes on, a little less. My commitment, passion and dedication to the company is still incredibly strong, as it always has been. My perspective is going to be a little bit different, that’s all,” he said.
Rosen called Tandon “a smart, competent guy, and I think it’s a natural transition for him to step up.”
“Two years ago when I moved him here, I always had the idea that one day he was going to succeed me,” added Rosen.
The changing of the guard had nothing to do with how the business was performing, Rosen emphasized. “Our business is very good and continues to be very good,” he said. In fact, Fast Retailing reported that Theory had significant profit gain for the first quarter ending November 2018.
Helmut Lang, which Fast Retailing acquired in 2006, has started to show positive signs and also will come under Tandon’s purview. “It’s really made a tremendous improvement from where it was a year ago. The business is poised to do really good things. We had an amazing fashion show for the fall collection and it was really received very well. The new strategy I put in place in how we designed and manufactured and sourced our product has really been received really well. I see that as poised to do some really great things here,” said Rosen.
Rosen doesn’t expect there will be a radical shift in personnel under Tandon or the way they do business. He said Tandon gets along well with the women’s wear designer Francesco Fucci, as well as the others at the company. “He [Tandon] is a very likable guy, he’s a very personable guy,” said Rosen.
Rosen plans to continue to be involved in the other companies in which he has invested. Although he declined to divulge which companies he invests in and advises, it is widely known that he has taken stakes in such brands as Rag & Bone, Alice + Olivia and Veronica Beard.
“I am passionate about the industry, and passionate about things that are going on in the industry. This is not me retiring. This is me changing my perspective at Theory, and it will give me a new perspective on what I want to do personally and professionally,” said Rosen. “I want to continue to do what I’ve done for all these years, and to enjoy my work and be inspired by what I’m doing and continue to be able to do things that I think are important within the industry and outside of the industry, in terms of leading my life.”
In reflecting on the past 22 years, Rosen said, “I’m most proud of the business we built, the culture that’s been created, and the people, the integrity and how they design, manufacture and operate a clothing company. I think that our business is done with a lot of integrity. To be successful for 22 years in our industry, is something very nice. As I’ve always said, I don’t generally want to look back at all the things we’ve done right or what we’ve accomplished, I’m more interested in where we’re going for the future and what’s happening in the company for the future. I do believe that Theory has created an amazing culture, and we have a group of people who are incredibly passionate and are incredibly talented, and the methodology in which they do business is very admirable.”
Rosen believes that everything has been a part of creating a fabric of the company. “This company has incredible roots, and an incredible methodology of designing and manufacturing and selling clothing. This company is an expert in doing that, and there aren’t too many experts around. This company happens to be one of the real experts in terms of being able to execute its business. I think that will keep it in good stead for the next 20 years,” he said.
When asked to describe opportunities for the Theory brand, Rosen spoke about the strides it has made outside of the U.S. “The international business has certainly been outpacing the domestic business and I think it will continue to do that. Although the domestic business is growing, the international business is growing more. What’s happening to our footprint around the world is exciting, and the ability to be able to operate in so many different countries and do it successfully. Also, our relationship with Fast Retailing and the ability it has to help us scale internationally,” he added.
Despite so much disruption from online retailing, and retailers and brands shutting brick-and-mortar stores, Rosen believes Theory remains in a good position. He said Theory was never over-stored and recently opened a store in Hudson Yards. Rosen said he liked the concept of Hudson Yards and is optimistic about the business there. “The reality of what’s happened there is really exciting. The mix of stores and restaurants, what Neiman Marcus did there is really exciting. It’s a real pleasant surprise. It will be a real destination, especially for tourists,” he said.
Theory is thinking about opening more stores as well. “The digital business is an important part of everyone’s future, but it’s not replacing brick-and-mortar stores. I think that here in America, what we’re seeing is the natural selection of us being over-stored. The natural selection of those companies that don’t have a place in the market is going away,” he said.
For years, Rosen has been a proponent of bringing more production back to the U.S. and has been involved with the Fashion Manufacturing Initiative, a program of the CFDA and the New York City Economic Development Corp. to help preserve and grow fashion production in New York City.
“I think the domestic manufacturing, the CFDA and I have done a lot of good work there, but there’s a lot of work still to do. I think as the marketplace and the supply chains need to get quicker, domestic manufacturing will continue to be important and is necessary. For new designers and new companies to start, the best way to start is with domestic manufacturing. I think for the future of our industry, we need to have domestic manufacturing,” he said. “It’s much easier for a new company that has small quantities and is just getting its feet on the ground to have a closer relationship with their suppliers and they can do that domestically. I think so many companies in the past have started that way, and so many in the future will start that way.”
As the business and world have changed, Theory’s thrust evolved from a predominantly wholesale model, but now it must evolve to engage directly with its consumer. “It’s the way the world is going. Companies that have a much better understanding and a 360-degree view of the business are going to be successful. Those that don’t are going to struggle. Now the importance for us is not only to maintain the integrity of the brand, but to be able to reach the customer directly and be able to understand how to service the customer, how to communicate with her, to engage with him or her. The customer engagement becomes the more important issue than just worrying about our brand. This is really the focus of our company. It’s been the focus the last few years and will be more important the next few years. We have to become better direct-to-consumer operators in all the different platforms and have to become more focused on the consumer,” said Rosen.
Does he think Tandon will be open to Rosen’s advise?
“Hopefully Dinesh won’t have to listen to me. He’ll have his own views and opinions,” said Rosen. “Dinesh and I have had a great relationship over the years, when he was in China and now that he’s here in the U.S. He and I have worked very closely together. He’s my friend, as well as my business colleague. I am sure that relationship will continue, and hopefully from time to time he’ll ask me my opinion and I’ll give him some good advice.”
Among Rosen’s chief initiatives at Theory was opening the Fast Retailing Design & Innovation Center on Gansevoort Street in the Meatpacking District, a 100,000-square-foot space dedicated to design, product development and manufacturing for Theory, Helmut Lang and Uniqlo. Other initiatives have been Theory for Good and sustainability initiatives; social, digital and event platforms: “Be Heard,” “Theory At Work,” and “My Theory,” and Theory 2.0, which gives a voice to the younger generation within Theory, giving them a platform and resources to test out new product and marketing ideas.
Whether Tandon will continue with these initiatives, Rosen said, “I think the intrinsic ingredients of what Theory was founded on will remain. But hopefully Dinesh will carve his own style and path, in terms of how he wants to operate the business. I think the way I do things is a product of my upbringing and experience and knowledge of the industry. His is different. I’m sure he’s going to do things differently and I welcome that, and I think it’s good for the company.”
Not showing up to work on a Monday morning is something Rosen is looking forward to.
Rosen said he’s been leading companies for almost 40 years when he combines his experience at Calvin Klein, Anne Klein and Theory. “Frankly, I relish the opportunity to have a different perspective on things. Running a company and being a ceo of a company is a tremendous responsibility and takes tremendous focus and vision. I’m sort of relishing the opportunity of not having to come back to the office on Monday morning to see what the sales figures are like and lead a company,” he said. “It’s been a long time that I’ve been free to have my Monday mornings to myself. Not that I didn’t enjoy coming to work on Monday, I’ve always enjoyed coming to work on Monday. I want to be able to take a little time, and understand what I want to do both professionally and personally. I by no means want to retire. How my experience and knowledge and passion and energy can be best used to serve the industry and serve me personally, I want to reflect on that.”
With some newly freed up time, Rosen said he wants to not only spend more time with his wife and family, but also to continue to pursue a longtime passion — horses.
“I don’t know whether I’ll spend more time at the racetrack — only if some of my horses start running really fast. I have about 70 horses. I really enjoy the horse industry, in general. I breed horses, I buy horses, I sell horses, I race horses. I’m involved in all different facets of the industry. I’m on the board of the New York Racing Association. Like fashion, horses are another passion I have. I always spent a lot of time doing it when I was working full-time, and I’m sure I’m going to have a little more opportunity to do it when I’m not. I have one horse named Fashion’s Star that I’m really excited about this year, and hopefully I’m going to go to a lot of her races,” said Rosen.