Next semester, New York University’s Clive Davis Institute of Recorded Music will offer a new course for undergraduate students studying for a bachelor of fine arts degree. Entitled Sean Combs & Urban Culture, the two-credit course will discuss and dissect “the brilliance, tragedy, strategy and serial entrepreneurship of Sean Combs.”
Over the past 20 years, the Harlem, N.Y.-born hip-hop entrepreneur has amassed a personal fortune estimated at $700 million as the founder of Bad Boy Records, as well as a producer, actor, film producer, reality TV star, restaurateur, codeveloper of Cîroc vodka and an equity partner in Revolt TV. And, simply, brand.
This story first appeared in the May 22, 2014 issue of WWD. Subscribe Today.
Whether he goes by Puff Daddy (his current moniker), Puffy, P. Diddy or Diddy, the 44-year-old Combs remains one of the hip-hop world’s most famous entrepreneurs, up there with contemporary Jay Z. But while his name may change at the drop of a hat — as well as his ventures — there has been one constant in his life for the last 16 years, his fashion line Sean John.
Despite numerous ups and downs since Sean John was launched in 1999, Combs has stuck with it. While Sean John sportswear has been exclusive to Macy’s in the U.S. since 2011, Combs now has plans to expand internationally through a series of new licensing agreements and partnerships that will find the Sean John brand on sales floors in India, South America, Africa, China and the Middle East.
And like everything Combs has always done, he is thinking big again, once again aiming to turn the label into a $1 billion brand at retail.
Jeff Tweedy, the company’s longtime president who oversees the day-to-day operations of the New York-based business, projects the label will hit that level within four years. Today, the brand has an estimated volume of about $450 million.
Although Combs doesn’t shy away from his notoriety, referring to himself as “world famous,” he bristles at the notion that Sean John is a celebrity brand. “I’m not selling celebrity, I’m selling fashion,” he said. “We’ve graduated at this point. We own fashion-tainment. I don’t want to run from who I am. That’s what makes it exciting, but from Day One I was building a brand. I was never doing a celebrity clothing line.”
For the first seven years, Combs said he also served as head designer and he’s perhaps most proud that he was honored by the Council of Fashion Designers of America in 2004 as its Menswear Designer of the Year.
Since that time, however, Combs has worked to build “a really great, sophisticated team that understands cut and shape and sizing,” he said during a recent interview at his New York City office. “Keeping up and changing is one of the things that happens when you’re dealing with experienced people. People know Sean John for its consistency. You don’t walk into our shop and get dizzy. You see timeless fashion, and if you’re a guy who is into timeless fashion or you’re a girl who wants your man to be clean and not disruptive but have some classic, modern, contemporary chicness, Sean John is that brand.”
Sean John ranks as one of Macy’s largest men’s brands, selling in just under 500 of the company’s 650 stores. It targets the older Millennial consumer, a major focus of the retailer. Terry J. Lundgren, chairman and chief executive officer of Macy’s Inc., said that while Sean John started out as a young men’s brand, it appeals today to guys in their late 20s and 30s and remains “very important to us. The product has always had high demand in key markets like New York, Los Angeles, Detroit and Chicago. But now, it’s also growing fast in markets like Denver and San Antonio.”
The brand’s customer demographic is more than 40 percent Caucasian and more than 20 percent Latino.
Lundgren said this “demonstrates that the brand has broad appeal and Sean Combs has a big and broad following. He’s a very sophisticated, educated and talented guy, and I have the highest respect for him. He works hard, he gives his time on the product and visits stores. He always stays connected and has a giant curiosity about what consumers are looking for. He’s a sponge for information and that’s why the brand continues to perform.” He credited the Sean John team with working closely with Macy’s merchants to ensure that the product is spot-on for the target customer.
“When we do exclusives with someone, we’re determined to make it a success,” Lundgren said.
For his part, Combs believes Sean John is “a perfect brand for Macy’s. I love to make clothes that make people look good and have an aspirational quality to them. I can compete on some of my pieces with some of the top luxury brands and I take pride in that.”
Combs believes Sean John has survived when other celebrity brands come and go because it has remained true to its roots.
“We were built on a strong foundation and we received a lot of respect from the fashion world who didn’t put us in that urban street category,” he said. “Even though we [were among the first in] the street category, and that’s back on the rise, we’ve been able to stand the test of time. We’ve evolved but we’ve stayed authentic to who we are. There was maybe one season where we made a mistake and chased some trends that were not in our DNA, but we built a strong foundation and a strong DNA. Like any brand, we’ve gone through a lot of ups and downs, but we’re probably one of the most consistent brands over the years from a business financial standpoint and also an evolution standpoint. Our core customers have grown with us and we still represent to kids a cool factor. Everybody goes through a phase where this is hot or that is hot, but the strong survive.”
Tweedy said that when Sean John launched, there were 26 celebrity-endorsed brands within the streetwear space including Russell Simmons’ Phat Farm, Jay Z’s Rocawear, Karl Kani and others. “But a lot of them were in it for the wrong reasons. Most of them were not under their own names, so the passion wasn’t there. A lot of celebrities look to get in and out and make a lot of money. But Sean John has Puffy’s name on it. It has a brand DNA, a blueprint, it stays true to its customers and the muse remains involved. That’s the reason it’s been around 16 years.”
Tweedy was Sean John’s first employee and has been with the brand the entire time except for a two-year stint from 2005 to 2007 when he left to serve as president of G-III Apparel Group Ltd.’s sportswear division. During his time away, the brand had a change in direction, lowering prices and stacking product high and deep. When Tweedy was named president in 2010, volume had reportedly dropped to $350 million from the $525 million it had claimed in 2008.
At the beginning of its life, Sean John enjoyed skyrocketing growth, and was known for its high-voltage, million-dollar-plus runway shows. In 2003, billionaire Ron Burkle injected an estimated $100 million into the brand through his Yucaipa Cos., and Combs vowed massive growth and numerous retail stores. But by the mid-Aughts, the brand started to lose its luster so it moved beyond its urban roots toward a more contemporary, mainstream image with more sophisticated designs and updated fits.
Sean John today is a completely licensed business and, at the end of the year, offered product in 18 categories including sportswear with LF USA; tailored clothing with Peerless Clothing; dress shirts, neckwear and underwear-loungewear with PVH Corp.; footwear with 2Feet; cold-weather accessories with Concept One; boys’ sportswear with Lollytogs, and hosiery with Mallory & Church.
This year, the company has added a number of new partners, including Marchon for sunwear and optical, which will be introduced this summer; S. Rothschild for outerwear, launching this fall, and Geneva for dress, sport and casual watches, also being introduced for fall. The brand’s lucrative fragrance license, formerly held by Estée Lauder, has been reassigned to Jacavi, which will relaunch Unforgivable in the fall and I Am King for holiday.
“When you continue to sign licensing deals, it’s a sign that you’re doing something right,” Tweedy said, noting that the company works closely with its licensees on product and controls the marketing, creative and in-store display. “We control the retail management to ensure the brand immersion.” In addition, Tweedy and Combs approve all product under the Sean John name to ensure its consistency. “I get the briefings on each season, what’s coming, what some of the concepts are. I still do appearances and marketing for the brand,” Combs said.
Outside the U.S., Sean John has signed a joint venture agreement with Reliance Brands in India, and its five-year plan is to move into South America, Africa and China as well. The company is hoping to finalize a deal in the Middle East shortly. Tweedy is projecting that within three years, international volume will be $100 million.
Combs believes Sean John will play well outside the borders of the U.S.
“I’m at my most famous internationally at this time,” he said. “They say I’m probably one of the top three recognized African-Americans around the world and the world is mostly brown. They get inspired by me, they see me doing things that no African-American man has done, from a clothing line to fragrances to a spirits company to a wellness water company to record companies, publishing companies and now a cable network. To them, when they see me and they see Sean John, they see it as a success story and they see it as a dream come true.”
Tweedy said he expects the brand to do well in India. “Entertainment is big in Bollywood,” he said. “And they love the brand.” That’s especially true for men 25 to 30 years old, Sean John’s “sweet spot.” Under the terms of the deal, Reliance, a $66 billion conglomerate based in Mumbai, plans to open eight to 10 freestanding Sean John retail stores within two years and also sell the brand and all its varied classifications into department stores there through a series of in-store shops. “That is the future,” Tweedy said. “There are only so many Macy’s doors.”
Even so, he sees volume increasing at the department-store chain as well. “We have a little under 100 shops in Macy’s so we can still expand,” he said. Tweedy said the brand performs best in 225 to 270 doors and often hangs next to Ralph Lauren’s Denim & Supply brand or the Tommy Hilfiger collection. “We’re seen as a hipper Ralph Lauren,” Tweedy said.
Last year, Sean John renovated 66 of the Macy’s shops to make them more contemporary, with clear white fixtures and bright chandeliers. An additional 39 shops will be revamped this year.
Sean John also operates five outlet stores in the U.S., but has no full-price units. Its one full-price store in New York City closed in 2010. “Would we like to have a store in New York City again? It would be a great marketing vehicle and the answer is yes, but our focus right now is on international and fragrance,” Tweedy said. The brand expects to open additional outlets in Los Angeles, Atlanta and the New York City metropolitan area in 2015.
At its peak, Unforgivable had sales of $98 million and even though the license with Lauder expired at the end of 2012, Tweedy said customers still call to ask where they can buy it.
Outside of fragrance, Tweedy said, in the U.S., sportswear continues to be the primary growth vehicle and the brand is a leader in the linen category with product ranging from shorts and trousers to guayabera shirts and blazers. Jeans posted a 20 percent increase in sales after a redesign in 2013 refined the fit from slim to loose. The boys’ business is also on fire, with sales up 140 percent between 2012 and 2013.
He also sees opportunity in expanding the business in dress shirts, ties, suits and suit separates. “We’re talking to Peerless about adding formalwear,” he revealed. “And belts, watches and footwear are also an opportunity.”
Looking to the future, Tweedy believes there’s opportunity to add even more licenses in categories ranging from swimwear to women’s — a category the brand had offered in the past — girls’ apparel, additional accessories and home.
Combs, too, is confident the brand has a bright future, thanks in no small part to the team he has built over the past 16 years. Asked the secret to the company’s longevity, he responded: “Hire great people. I had to learn to hire great people and you get what you pay for. I had to make sure everybody is happy, everybody’s family is happy and people understand and believe in [the brand]. And if you do right by them, they love going to work.”