NEW YORK — It’s a new day at Billy Reid.
The Alabama-based designer recently sold a minority stake in his business and with that financial cushion is working with a new team to grow the brand to what he believes can be its full potential.
In addition to Joel Anderson, an Alabama businessman who has been a partner for close to a decade, the Kemmons Wilson Companies, a Memphis-based investment firm operated by the descendants of the founder of the Holiday Inn chain, recently invested as well. Kemmons Wilson also holds stakes in the Memphis Grizzlies NBA team, the Wiseacre Brewing Co., Central BBQ, Active Implants and businesses in the hospitality and insurance fields. It purchased an undisclosed percentage of the Billy Reid brand last year.
The latest company to provide funding is The Balvenie, Scotland’s premier single malt Scotch whisky. The deal, which is for one year but may be extended, will find Balvenie spirits being featured at Billy Reid’s 12 retail stores. It will sponsor his 11th annual Shindig festival in Alabama in August and host a series of in-store events in several stores.
Like many independent designer labels, Reid has struggled to find the cash to sustain and expand his business. Reid launched his first brand in March 1998 in New York under the William Reid name. But when sales plummeted after the Sept. 11 terrorist attack, he closed the label and moved back to his home state of Alabama to do some soul searching. He relaunched in 2004 as Billy Reid and today, the label has sales of around $25 million derived from his own stores, a wholesale business with Nordstrom and several high-end specialty retailers, and a growing e-commerce site.
Reid has won three Council of Fashion Designers of America awards, one of only four designers to have achieved that honor, and is known for his textiles and his Southern-skewed aesthetic.
“I’ve seen this business from the top and the bottom and everywhere in between,” Reid said over breakfast last week near his Bond Street store. He was flanked by Mark Daley, a 22-year veteran of the DFS retail division of LVMH Moët Hennessy Louis Vuitton as well as Ralph Lauren and Smythson, who joined the company 14 months ago as chief executive officer.
“To add stores and head count, we needed to move at a slightly faster rate,” Daley said. So the decision was made to accept additional outside funding. “These are two local Southern families who understand the brand and want to see Billy win,” Daley said, adding that although Kemmons Wilson invests in a number of companies, it is not a private equity firm and its owners are customers of Reid’s.
“They’re in it for the long term,” Reid said, adding that the owners are not seeking to drive up sales quickly, sell and move on to the next thing. “It’s nice not to have that pressure,” he said. “And while I may no longer be the majority owner, I need the help and I’ve been fortunate to have partners and investors that feel the same way.”
Although the fashion landscape is littered with designers who have sold their names and then regretted it, Reid doesn’t see that happening in his case. “It’s taken a lot of years to get the company and the stores healthy,” he admitted. “But I put a lot of faith in people. I still have the freedom creatively to do what feels right and I don’t really think about it. I just focus on building the brand. It’s kind of like an old house that is never finished.”
With the funding, Reid will open five stores over the next 12 months including locations in Fort Worth, Tex., and Birmingham, Ala. The existing fleet will be revamped and a showroom in London has been added with the intent to expand wholesale to upscale retailers in Europe.
Within five years, Daley said, the plan is to have 24 stores in core markets with annual sales growth of 8 to 10 percent.
The Charleston, S.C., unit has the highest volume in the fleet and the women’s collection — which Reid offers only in his own stores — accounts for 40 percent of the business in that location. Overall, it’s around 25 percent.
The Charleston store opened in 2009 on the corner of King and Queen streets in the bottom of a three-story building. Reid is now taking over the rest of the house and will expand the retail store, hospitality and add a rooftop deck. It will nearly triple in size from 1,200 square feet of selling space to over 3,000 square feet when it is completed this fall, Daley said.
“We’re looking for unique opportunities like that,” he said.
Many of the stores were opened “on a shoestring,” and are desperately in need of updating, Reid said. In fact, the brand is closing its Houston store because what it thought was a neighborhood on the upswing turned out not to be the case. The Nashville unit, which opened almost a decade ago, will be relocating to a location in the heart of the bustling Music Row. In Birmingham, Ala., he’ll open in an old warehouse location where a restaurant and bar can be added. Fort Worth, Tex., will be added.
Although many of the stores require a refresh, they are still a key part of the brand’s business, accounting for 60 percent of overall volume.
His stores have become gathering spots for customers, whether they’re stopping by to sip a little Balvenie in a lounge in his stores while shopping, or attending one of the Supper Series events he has hosted at his Florence, Ala., flagship where a celebrated chef from out of town prepares dinner for around 20 VIP guests.
“It helps us to enhance the customer experience,” Reid said. “And we’re going to be expanding the events this year. Hospitality is a big part of what we do, and now we have a partner.”
“We’re thrilled to partner with Billy Reid for a series of experiences that will celebrate what we as a brand hold in such high regard — craftsmanship and the people who create across industries,” said the Balvenie’s brand director Greg Levine. “The Balvenie’s handcrafted ethos starts from within the distillery with the work that goes into every bottle, and we strive to collaborate with like-minded individuals who are committed to the same level of workmanship. To that end, we’ve found a great partner in Billy Reid.”
One of Reid’s most successful events is Shindig. Originally conceived as a press junket for editors to visit Alabama and experience Reid’s world and his Southern culture, it has grown into a four-day, consumer-facing music, art, food and fashion festival held each August in Florence.
Reid has also hosted a Shindig at Blackberry Farm, a luxury resort in Walland, Tenn., in the Great Smoky Mountains in the fall, and plans to return there again this year.
At both his existing stores and the new ones coming on board, he hopes to have functioning kitchens so that he can have dinners and other events for customers.
Daley said the fact that Reid is still actively designing the line is also special. “He exists,” he said with a laugh. “And that’s unique today.”
The funding is allowing Reid to expand his product offering. In denim, for example, his popular shirt was nearly always sold out because he didn’t have the money to continue to produce it. Not only will the shirt be in constant production, it’ll now be available in a couple of different washes. Ditto for the designer’s jeans offering.
He’s also expanding into opening price point products: pieces such as graphic T-shirts for $50 to $75 and sweatshirts for $95 to $125 designed specifically for each city. Although he has dabbled in these in the past, they were frequently out of stock, as were his popular bandanas, pocket squares and socks that will now be offered all year-round.
“We sell luxury price point products very well, but we lagged in more-impulse items,” Reid said. “We had them, but we ran out of juice to roll them out. People want to come in and take something home and it’s not always a leather jacket or a shearling coat for $3,900.”
Other new product categories in the pipeline for this year include leather goods for men and women and gifts such as coasters, board games and other products that he’s working on with a San Francisco-based company named Fire Road. He’s looking into rugs and other home-related items as well.
Daley said that last year, half of the customers in the stores were new, as were three-quarters of those shopping online.
In the company’s five-year go-forward plan, projections call for a 20 percent compounded annual growth rate online, Daley said, which is the company’s “fastest growing vehicle.”
Wholesale also remains an important business segment for the brand, and while not expected to grow at the same pace as the company’s own retail stores, Daley said he’s hoping to expand with Nordstrom and bring some other specialty accounts on board.
Internationally, the company is talking to retailers such as Harrods, Selfridges, Harvey Nichols and Mr Porter and has seen “a high level of interest,” Daley said.
Expanding women’s wear is in the go-forward plan, too, with a focus on the company’s direct-to-consumer channels.
In addition to overseeing the design, Reid is spending his time on “content development to make the brand more lifestyle,” he said. He pointed to his mother, who owned a women’s boutique called T.J.’s for Her that operated out of his grandmother’s home in Alabama, as a role model. His mother sent hand-written notes to her customers when she was shopping the market, telling them that she’d seen the perfect piece for them, and would let them know when it came into the store.
“The tools have changed, but the rules are still the same,” Reid said. “And having these new people and investors has freed me up.”