Two men, each with an Inc. 500 clothing company, debate the differences between their companies.
Two guys, two clothing companies, two Inc. 500 winners -- and two completely different lifestyles and business strategies. Can they both be right?
* * *
I felt lucky to meet Ben Narasin, the bright, articulate president of Boston Prepatory Co., while hobnobbing in the gift shop of Pittsburgh's Carnegie Museum during a break at this year's Inc. 500 conference. Luckier still, I thought, when Narasin's friend and equally successful competitor, Laurence Levy, vice-president of Jelyn & Co., joined us. I was struck by the similarity of their business stories (young bucks running clothing companies) and the utter contrast in their personal styles. With his tasteful gray suits and loafers, his soft accent, and his low-key, polite manner, 27-year-old Narasin radiates a muted southern charm. couldn't be more contrapuntal: fast talking, combative, excitable, and oh-so-slightly mussed up (is his shirt untucked?), he spins out ideas, rebuttals, and jokes as effortlessly as Pig Pen exudes dirt.
On the surface their business stories have much in common. Both manufacture their clothing domestically and count that as key to their strategies. Both run lean companies. (In fact, they shared a room at the conference to cut costs.) Both are young. (Levy is all of 30.) Yet as they began to argue the merits of their respective companies it became clear that though they are cut from the same cloth, their companies couldn't be more different.
"We represent opposite views that are both correct," said Levy, explaining, "Ben builds by exclusivity and brand. We build through volume. We will sell through Penney's and Target -- "
"Which to me is an absolute sin," cut in Narasin, who summed up their differences with a simple metaphor: "I'm the Jack Russell terrier -- and Laurence is the pit bull." It struck me then that the best way to share their contrasting strategies was to get them together in a room with a tape recorder and let them fight it out. Earlier this fall I did; the results follow.
-- Tom Ehrenfeld
* * *
Outsourcing versus doing your own manufacturing
Narasin: When you start out making something, you think, I'm going to buy the factory one day. Then I realized I didn't need to own the factory. Outsourcing gives us a lot more manufacturing flexibility.
As a virtual corporation, I could take this company, pick it up and put it anywhere in the world, and still accomplish the same things. I start with a shirt concept, shop for the best piece of fabric, and ship it to a factory that will manufacture it to my specifications in a just-in-time setup. The factory ships it directly to the customer. We will handle design and quality control in the factory. The most important thing we end up doing is becoming a marketing organization with the contacts and expertise to get what's needed done.
So we're not locked in to 500 guys waiting for their paychecks on Friday, who have to get paid regardless of whether the economy is soft. I've never had to pass up an order because we couldn't get it delivered on time or couldn't hit a price we agreed we could hit.
Levy: I'm not saying it's not possible for you do that, Ben. But this is a known fact: if you're going to rely on contractors for your manufacturing, you don't have any kind of real control. If you say you've never lost an order because of production, I'd say you're very lucky. But I'd say that's not very standard for the industry.
The big divergence between us is this: a retailer like Eddie Bauer couldn't come to Ben four, six, or eight weeks before the goods are about to hit the shelf and get delivery on time for the full quantity.
Narasin: We got an order from Eddie Bauer over Christmas for 12,000 units of a shirt, and they needed it in less than eight weeks. And we delivered it.
Levy: I'd say, if you don't have control over the mills you're working with, you're not going to be able to consistently capitalize on quick orders.
Narasin: If I were dependent on one mill, then that would be true. But I'm not.
Levy: Maybe you should understand how we structured our company and why it's a win-win situation for us. We have invested in the mills in what we feel is a very smart way, so there's no downside. Jelyn does not technically own any mills; our mills are all separately owned entities. We have taken the manufacturers, the people who had owned the mills, and have made strategic investments in their companies. We've invested in the machinery.
Narasin: But, then, you're not really owning your own production.
Levy: Ben, how are we not owning our production? Jeff Soowal [Jelyn's CEO] and I each own 50% of the voting stock of all the mills. They have to do whatever we say. They are totally dependent.
Narasin: You said it's lucky for me not to have missed any orders. I think it's lucky for you that you've kept all your mills busy. Let's say there is a time, for whatever reason, that one of them has just taken a dip. Do you guys have to absorb that loss?
Levy: You have to understand what the loss is. Let me explain what would happen in that worst-case scenario. We pull the machinery out. We put it in one of our other mills. We might have to lay some people off.
Narasin: I don't see yours as the traditional method of owning a mill, which is owning brick and mortar and having employees you're responsible to. I personally don't want to have the responsibility where in a downturn my reaction would be to stick the machinery in storage and lay off a lot of people. That's a personal thing. But it's not something I want to deal with.
Levy: To be very honest with you, there's absolutely no concern whatsoever for us right now that we could not keep our mills running. Right now we're turning down orders. We have hit our capacity, and we're projecting $25 million in sales this year.
