The Holy Grail for many brands is landing shelf space with major retailers. Not for menswear designer Brian Guttman. His father's clothing business was beholden to department stores.
So when he founded the label Jeremy Argyle, he vowed to sell at his own stores and website--and in four years, he has built a $5 million business with a hot following. (Fellow entrepreneur Russell Simmons is a fan.) Inc.'s Jeff Haden talked to Guttman about the tradeoffs of going solo.
I don't know many designers who wouldn't want to place their products in hundreds of stores.
Be careful what you wish for: You think you have an incredible opportunity--but the capital requirements and exposure to delayed receivables, markdowns, and chargebacks can put you out of business.
Big retailers pass the expense and exposure off to small brands. With the state of the economy and the unpredictable cash flow, it would be nearly impossible for businesses my size to survive.
What about the huge brand exposure you gain instantly?
True, but that can backfire in terms of brand equity. Once you place your goods in someone else's hands, you're at their mercy. They control the customer experience, not you. I wasted significant time and money early on hiring firms to help me launch the brand before realizing their goals didn't align with mine.
Couldn't you get more customer insight if you sold clothes nationwide instead of in two stores?
When you sell to stores' buyers, they become your customers. You start to focus on their needs, and pretty soon the product you create isn't in line with what the customer wants.
I know a lot of my customers by name, by face. I know what they like and don't like--that definitely informs our design process.
And speed to market can be an issue.
Absolutely. Sell your own, and you aren't forced to work on seasons. You can give customers a reason to keep visiting your stores and website.
That's why knowing our customers is so important. Ours don't like department stores and don't like to "shop." They want no-BS shopping: a little direction, no selling, in, out, boom.
So you're happy with growth that is slow rather than explosive?
I decided to grow Jeremy Argyle myself instead of hoping someone magically grows us. We're not alone; timepiece brands like Hublot and Audemars Piguet opened stores for a better brand experience and to capture more revenue per purchase.
I'd rather spend all my time living in my stores, talking to the people who wear and love our clothes. They'll help build our brand in a way a big box never will.
Read more of Guttman's simple tips on how you can keep customers coming back here.