BoF the Companies Culture Issue Spring 2014

7/27/2019 BoF the Companies Culture Issue Spring 2014

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THE C O M P A N I E S& C U LT U R E ISSUE

FEATURING

VICTORIA BECKHAM, RICK OWENS, HERMS, MICKEY DREXLER, TAMARA MELLONAND A SPECIAL BRIEFING ON FASHION MEDIA GAME CHANGERS

I N T R O D U C I N G B o F C A R E E R S WI T H A N Y A H I N D M A R C H , E R M E N E G I L D O Z E G N A ,

L ANE CRAWFORD, L VMH, NET- A- P ORTER, S WAROVS K I A N D T O R Y B U R C H


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NEW YORK, United States Mickey Drexlers office is like a

boardroom. Or better yet: a gigantic

cubicle, barely portioned offfrom a

cluster of administrators. His desk is a massive

conference table with just a handful of papers

stacked next to a phone. Whiteboards occupy two

corners of the room. One displays a list of ideas

relating to Wallace & Barnes (a heritage collection

thats part of J.Crews mens offering) and includes

phrases like, where is the puck going? and

sweats. The other contains a more random

collection of thoughts, including a quote from

writer Glenn OBrien that reads, Anything that

fights conformity is good. The only indication

that we are in someones office is the array of

family photos lined up on low-to-the-ground

wooden shelving.

You see this desk? At Gap, they used to

wonder. A $40-billion company, and my desk was

kind of like this, says the 69-year-old Drexler,

who ran the American retailer from 1983 to 2002.

I didnt want too much clutter. What, was I going

to read reports about what already happened?

What Drexler does do is keep his finger

on the pulse, calling his top employees in and out

of his office any time he has a bright idea or a big

concern. Call it micro-managing, sure, but its

more like constant questioning. The fact of the

matter is, hes a meddler, says J.Crews president

and executive creative director Jenna Lyons.

But one of the benefits of working for someone

who has been so successful is that he doesnt have

anything to prove. Hes not fearful of anything but

not being happy and enjoying what he does.

A big part of what makes J.Crew the most

compelling American retail and dare we say

it, fashion success story of the past 10 years is

Drexlers uncanny ability to pick up on market

trends and patterns incredibly quickly, consult

data to back up his observations, then bring those

trends to the masses. Its perhaps the core reason

he was able to transform a once-promising, long-

struggling catalogue business into a powerful

arbiter of taste. Indeed, the only thing Drexler

Millard Mickey Drexler mixes great instinct and good datato bring that special something to J.Crew.

INTERVIEW: IMRAN AMED WORDS:LAUREN SHERMAN IMAGES: ETHAN SCOTT

At work with

MICKEY DREXLER


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seems to fear is missing out on the next big

thing. And he uses his unique mix of instinct

and information to figure out exactly what t hat

is and act upon it.

Even early in his career, Drexler made sure

nothing got past him. At Bloomingdales, my

nickname was Stubs Drexler, a moniker born

from the then twenty-something merchants habit

of counting sales tags each day in the evening after

the store had closed to keep track of performance.

It was a manual but real t ime way of knowingwhat was doing well and what wasnt. That was

my computer, you know?

Logically, Drexler was able to use this data

to better inform his future buys, but maybe not in

the kind of linear way one might imagine. He tells

the story of a t-shirt that arrived on the shop floor

one chilly February. The first week, it blew up.

So I placed what was then the biggest unit buy

in the history of Bloomingdales and I had to

negotiate with the president of the company. I

was 23 or 24 years old. I said, We sold X amount

in 25-degree [Fahrenheit] weather in February.

If you can sell this many in February, how many

will you sell in May? I do the same 40 years later.

Giving context to the raw numbers is

something Steve Jobs also excelled at. Ill never

forget when [he] showed us the iPod and said,

How many do you think I can sell? recalls Drexler,

a member of Apples board of directors since 1999.

We all guessed around the table and he said,

I think youre all really wrong. Do you know how

many Walkmen sold in the 1970s over a period

of five years? Ill never forget that. Thats exactly

how you do it. You look for data that connects the

dots and makes you figure out the next one.

In Drexlers world, iPods are skirts and

lately, hes been seeing a lot of them. I walked

into the photo studio and three out of four women

there were wearing skirts. And I said, Wow, whats

with the skirts? And, then, they told me where

they were from and none of them were from

J.Crew, which didnt make me happy, because

they were otherwise wearing mostly J.Crew stuff.

After this revelation, Drexler hit up his sales team

for data on the companys skirt business. Turns

out, its doing amazing, he says. So why werent

those J.Crew employees wearing J.Crew skirts? His

instinct was to bring in the marketing team.

I would like J.Crew to have the authority to

communicate, to say, Its about skirts or its about

sweats, he says. Whatever the category is, Id like

us to communicate emotionally to consumers.

Unsurprisingly, Drexler has hired away several

magazine editors, marketers and salespeople

from publications including Vogue, Glamour

and GQ. The circulation for the companys Style

Guide (formerly known as the, uh, catalogue) is

undisclosed, but the company says its comparable

to that of Americas largest fashion magazines

(InStyles2013 circulation was 1.7 million, while

Vogues was 1.2 million).

If something doesnt sell well and with

the number of different products J.Crew has on

the sales floor at any given time, it happens

Drexler wants to figure out exactly why, and how

he can change things to make it a winner. Hes also

open to doing smaller runs on more rarefied pieces.

Dropped samples prototypes that are never

produced are inevitable at every level of fashion.

A big part of what makes J.Crew a success story is

Drexlers uncanny ability to pick up on market trendsand patterns incredibly quickly, consult data to back up

his observations, then bring those trends to the masses.

But Lyons says its not as rampant at J.Crew as

it once was. Listen, we overdevelop and we will

never have room for everything, thats just the

way it goes, she explains. However, one of the

things I think that is unique about today is, well

go through [products] with Mickey and say, Oh

theres this selvedge wide-cuffjean, but its $300.

We could take offthe hand-seams and the sanding

[to get the price down], and Mickey will come

in and say, No, no, lets just leave it the way it is,

its beautiful. Lets just put it in fewer stores and

charge what it should be. J.Crews limited-edition

runs result in sellout items every season. They may

not do as much for the companys bottom line as its

classic cashmere sweaters or Matchstick jeans, but

they are an important part of the product offering

that the brand has become known for.

I remember one time, Mickey came back

from a board meeting [of a large car company]

where he was a guest, recalls Lyons. He said,

Ive never been to a board meeting like that

before. And I said, What do you mean? He

responded, If I looked at the streets and what

this company makes, to me the biggest problem

is its products. Ultimately, a customer walking

into a dealership wants to drive offthe lot in

something that looks cool. He said, There

was zero conversation about the production.

Everything was about supply chain, pricing,

maximising, minimising. Mickey doesnt see it

that way. He will make a decision that, at some

times, may seem risky or unproven if he thinks

its going to [resonate with] the consumer.

Drexlers unwavering dedication might help

to explain why, in 2010, he brought in TPG Capital

which owned J.Crew before it went public in

2006 as well as Leonard Green & Partners

LP, to take it private again, for $2.86 billion. The

companys shareholders were reluctant to approve

the deal; after all, Drexler had transformed a $700

million business into a $2 billion one. But J.Crew

argued that sluggish same-store sales and lower-

than-average stock performance meant it needed

to take a moment to work out some kinks. Just

three years later with last twelve months sales

through the third quarter of 2013 at $2.3 billion

there is talk that J.Crew will pursue an IPO again.

I wish I had a boss like me in my early

years, Drexler says with frank delivery. Im not

self-congratulatory. But I mean someone who had

a point of view, a vision, and passionately believed

in what they were doing and the direction the

business should have. In a way, Drexler is very

much like a journalist his office is his newsroom,

his designers and marketers are his reporters

on the field, finding whats new, whats good and

whats special. One of the things I think is very

paramount to Mickeys success and his passion

is he has a voracious need and love for the thrill

of finding the thing thats coming [next], says

Lyon. Its like an internal combustion system.

He comes home early from vacation and t he first

thing he does is go into a store and ask whats

interesting, whats happening.

And much like an editor, hes always looking

for the story or, in this case, the look with

the strongest pitch. There is one very office-

like feature of Drexlers supersized cubicle:

the expansive view, which includes dozens of

Manhattan skyscrapers. But Drexler is only

interested in one of them: One World Trade

Center. The world is about the other 20 or 30

buildings, but then you see that one building.

You notice that one thing.

CAREER HIGHLIGHTS

1970s

Worked at Bloomingdales

and Macys

1980s

Hired to run Ann Taylor;

became president of Gap

in 1983

1990s

Served as chief executive of

Gap, raising annual revenues

from $400 million to $14 billion

2000sJoined J.Crew in 2003;

currently acting chairman

and chief executive


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PARIS, France Rick Owens is abrand apart and it may not be too much

to say that the designer and his wife and

collaborator, Michle Lamy, similarly

exist in an alternate reality, a world of their own

making adjacent to ours, maybe, beholden to

the same laws of physics and economic realities,

but different, unique. Everything in Owens and

Lamys life, as in their business (as if one can

so easily differentiate between the two), is

done in vigilant observation of Owens dictate,

We build, we dont buy. And, together, the two

have conspired to build a world entirely of their

own design, furnishing it solely with the fruits

of their imaginings.

In Paris, this world is a five-storey mansion

overlooking the gardens of the Ministry of

Defence, minimally adorned with Owens furniture

and art by Lamys daughter Scarlett Rouge, and

where, during the busiest times of the year as many

as 15 employees scamper about the buildings first

floor showroom and second floor offices in head-

to-toe Rick Owens or DRKSHDW, his diffusion

line. Upstairs, Owens spends his habitually routine

days designing in the third floor studio, while the

hushed austerity of the fourth and fifth floor living

areas may suggest a modern hermitage, inhabited

by a particularly devout monk of fashion. When

in residence, Owens is as disciplined as any

friar, hewing to a now famously strict regimen

of work and exercise. But despite the precision

and severity of his designs, and Owens own jokes

about the rigours with which he pursues his vision

(calling his production process fascist), the man

himself is warm and engaging, almost puckish in

temperament. And it is this spirit that animates

Over the last two decades, Rick Owens andMichle Lamy have managed to construct

a fantastical creative world entirely of theirown design and turn it into a commerciallysuccessful business, projected to generate$120 million in 2014.

WORDS: CHRIS WALLACE IMAGES: MATTHEW STONE

Constructing

RICKOWENSCreative Bubble


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Owenslandia as it grows outward from t he

elegant Palais Bourbon HQ.

It is a long way from the dusty town

in central California where Owens grew up,

though his own flowing designs still hold the

charge he remembers feeling when he was just

a boy, watching nuns from the local convent

dragging their robes in the dirt. After moving

south to Los Angeles, Owens enrolled in and then

dropped out of art school. He studied pattern-

making at a technical college, and, while workingin a factory downtown, was soon introduced to

Lamy, by his then boyfriend, as the best pattern

cutter in Los Angeles.

Working on her menswear collection,

the two became romantically involved. And by

the time of Owens breakthroughVogue-funded

show at New York Fashion Week in 2002, they

were living together in bohemian splendour in

a row of storefronts in Hollywood, and Owens was

selling his own line exclusively to Charles Galley,

proprietor of an avant-garde boutique on Sunset

Plaza. Later that year, Owens won the CFDAs

award for emerging talent and was approached by

the centuries-old furrier Rvillon, who hired him

as creative director and brought him t o France.

In 2004, Owens entered into a partnership

with his manufacturers in San Giacomo the

Italians, as he calls them and began selling to

Tommy Perse at Maxfield in Los Angeles, Maria

Luisa in Paris, Joyce Ma in Hong Kong and Joan

Bursteins Browns in London.

But, even as their world has grown to include

directly operated stores in Paris, New York, Seoul,

Hong Kong, London, Tokyo, Miami and, soon, Los

Angeles, little has changed within Owenscorp since

its inception two decades ago. Elza Lanzo and her

brother-in-law, Luca Ruggeri, are still CEO and

commercial director, respectively. They still hold

a shared 20 percent of the company (Owens and

Lamy own the rest) though its safe to say that

those shares have significantly increased in value.

In 2010, Owenscorp revenue was around

$40 million. In 2012, that number was closer to

$70 million; in 2013 it exceeded $100 million and,

this year, its projected to surpass $120 million.

And, though he once flirted with the idea of selling

to an unnamed conglomerate, Owens has grown

his house without any outside help.

Weve never had to take any outside

investment, thank god. Nor has he ever

outsourced production or in-sourced a single

design. His is not an atelier system where a team

of young designers submits ideas for a boss

approval. Instead, he designs every piece from

every line bearing his name. Im greedy, he says,

meaning he wants all of that, the fun stuff, for

himself. Really, I wouldnt know how to do it

any other way.

And, even as their approach seems to have

the company mushrooming, both Owens and Lamy

maintain that they are simply moving and growing

the way they always have naturally, organically.

We are really just doing what feels right, Owens

says. It isnt that we are doing anything different,

says Lamy. It just happens.

On occasion, Owens has described the

couples business partnership as asking a gypsy

to organise a war with a fascist. He characterises

himself as rigid about deadlines and not at all

tolerant of people showing up late to work.

Lamy is more comfortable giving a long leash

to her collaborators. She cajoles, Owens says.

I demand. She lets people express themselves

more; she lets the magic happen and I expect them

to do exactly what I say. Which is how the furniture

came to be her domain. Turning to her, he says,

I think I inspire it. You direct it.

Aside from directing the construction and

sale of the furniture line they began in 2010, Lamy

is also in charge of the companys furs (they no

longer work with Rvillon) and handles a couture-

like strand of the business, welcoming cherished

clients into the atelier f or private fittings. When

BoF meets with the pair in early December, Lamy

is studying satellite pictures of possible l ocations

for their LA store and dreaming aloud about t he

possibility of opening in Dubai and Las Vegas. She

is aware of the mystique and artistry of the world

she and Owens have built that the world is itself

a work of art. Last year, she was in talks about

taking over a factory on an island outside of Venice

where they could build a kind of artisan utopia,

but the plans fell through.Now, she thinks she might want to open

a hotel, a place where their world is thrown open

to the rest of us on a grand scale part haven,

part fairy tale. It becomes clear that, beyond their

remarkable construction, what has always made

Owens clothes special is the sense of community

that they bear, the imprimatur of that world.

Indeed, wearing Rick Owens has always seemed

to be very personal, an externalisation of beliefs

or identity, of allegiance to something.

Thats where he has created the tribe,

Lamy says. A certain style, a certain way of

working thats what creates the tribe. Its not the

clothes, or technical things. Its the way of holding

yourself in a different way. But you see the way it

is changing.

One place we see it changing is on the street.

Only three years ago, membership in Owens tribe

seemed to be an all or nothing proposition. You

would often find the devotee in head-to-toe Rick

Owens or DRKSHDW and the fully devout are

still here, in greater numbers than ever. But now,

too, they are joined by the casual partisan pairing

a Rick Owens jacket with Nike Flyknits, or a

former streetwear kid working Owens sneakers

with a bomber jacket.

Helping his brand break beyond cult status

are Owens ludicrously luxe oversized jersey

shirts and leather jackets, which have been much-

fetishised by the hip hop set that drives much

of the streetwear market these days (it may

be impossible to quantify the power of rapper

Rick Ross claiming, Rick Owens on me, bombers

for my whole army, for example, but the reality

it underscores is plain). As streetstyle lensman

Tommy Ton observes, You definitely see more

of Ricks iconic staples, like his leather jackets,

filtered down to t he streets nowadays.After the wild sensation over his show last

Autumn, when American step dancers paraded

his clothes in a choreographed performance, it

was reported that orders went up as much as 20

percent, but Owens doesnt see cause and effect

there. I think orders are based on the last season,

how it sold. Indeed, the uptick in orders, he says,

is consistent with the growth over the last several

years. Sprouting from the lucidity of his vision,

protected by the brutalist simplicity of their

operation, and maintained by his own intense

commitment, Owens business has developed

a momentum of its own.

Hes one of the few that really sets the new

direction which leaves everybody else to copy,

says Perse, the owner of Maxfield in LA. But no

one is able to replicate his stuffin a way that comes

close to what he does. The man was obviously born

a natural, because he just g ets better and better.

It would take me ten years to burn this

whole thing down, Owens says, in signature

deadpan. Even if I were to go insane for five years,

there is still enough in the archive that they could

sell. It would t ake another five years before people

caught on and it all came crumbling down.

Then, after a beat, he says, I dont think

I will do that.

A certain style, a certain way of working thats what

creates the tribe. Its not the clothes, or technical things.

Its the way of holding yourself in a different way.


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Tamara Mellons

NEW RULESOF FASHION

NEW YORK, United StatesThe fashion system is broken, says

Tamara Mellon. So broken, in fact,

that the Jimmy Choo co-founder

who left the footwear company in 2011 with a

$100 million payout has spent the last year

trying to disrupt it. In September 2013, Mellon

launched her namesake label, which rewrites

the rules of how a fashion brand should be run.

The foundation of her strategy is buy

now, wear now, an approach that dispenses

with shows and aims to realign fashions retail

seasons with the real seasons, meaning that

winter coats hit stores in September, not July,

and Spring dresses launch in the Spring. The

last thing that I f eel like doing right now is trying

on a Spring/Summer dress, says Mellon on a

wintry day at her penthouse on Manhattans

Upper East Side.

Thanks to her track record at Jimmy Choo,

Mellon was able to convince retailers including

Nordstrom and Neiman Marcus in the US, Holt

Renfrew in Canada, and Harrods in the UK

to buy her wear-now looks. But while her shoes

and accessories were always a safe bet, the

designers only ready-to-wear experience up

until this point was a one-offcollaboration with

fast fashion giant H&M. Whats perhaps most

surprising, then, is that the business is currently

split 50-50 between accessories and ready-to-wear.

I make things that I want to wear and

I guess that resonated with the customer,

reasons Mellon. Sales have been swift. Half of

Net-a-Porters first order of Mellons $1,995

Sweet Revenge legging-boots was gone three

hours after the product hit the site. Here, Mellon

shares her new rules for disrupting fashion.

After launching hernamesake label, theJimmy Choo co-foundershares her strategyfor disrupting fashion.

WORDS: LAUREN SHERMAN IMAGE: ETHAN SCOTT


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While there are four-figure stilettos in Mellons

product lineup exotic skins are exotic, after all

most of Mellons product assortment, from shoes

to bags to dresses to blazers, hovers around $800.

Nobody wants to spend thousands of dollars for

an everyday dress. Its not realistic, she says.

I want to give my customer a better price for

a better product. She does this by cutting her

margins. Of course, it also helps to have great

relationships with factories, which she developed

during her Jimmy Choo years.

1 Take lowerMARGINSMost of Mellons pieces are seasonless, but her

real goal is to ensure the clothes that shes selling

in-store match the weather outside. She sells four

times a year and each collection is split into three

deliveries, which means much like a high street

operation there are new clothes available each

month. Now that its been on the floor and the

retailers have seen the sell-through and how the

customers respond, theyre coming back in with

a lot more trust and placing bigger orders.

When you write a business plan, everyone puts

e-commerce in at 10 percent of turnover, which

is way too small, she says. I think theyre looking

at it the wrong way. They should be looking at

[e-commerce] as a store in every prime location in

the world. The volume of business is there and its

only growing. In the next five years, Mellon plans

to launch as many as 60 brick-and-mortar stores,

but expects to do up to half of her business online.

3FOCUSone-commerceMellon was highly successful in making Jimmy

Choo a red carpet staple. When I took Jimmy

Choo to the Oscars, we were the first British

brand to go and the actresses wore them

because they loved them, she recalls. But today,

its not authentic. Stars get paid to wear brands.

It doesnt validate anything. Instead, Mellon

believes the best way to reach her audience is via

social media.I love having a direct conversation

with the customer.

4 Don't courtCELEBS

From the Sweet Revenge boot a cheeky

reference to her former employers to the

Submission sandal, a high-fashion take on

S&M style, each piece in Mellons collection has

a very specific, entirely original name. And thats,

unsurprisingly, not without reason. [At Jimmy

Choo], it was all just womens names. The Emily

or the Jackie. This time, we really thought about

it and we wanted to have fun with it. We called the

pump Addiction because as soon as we saw it,

we were like, Im addicted to that pump, I have

to have it in every colour.

5Make itPERSONAL

2IgnoreSEASONS

The magic number is 51 percent never give up

control, says Mellon, who relinquished majority

ownership of Jimmy Choo in 2004. When you

give up that equity, you might feel like a guest in

your own house. People might be disrespectful

of what youve done just to increase margins.

And theres absolutely nothing you can do

about it. That is a critical lesson I learned.

6Own it.LITERALLY

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Joan Burstein

QUEEN BHow did a small fashion boutique in London build a global reputation?

Colin McDowell sits down with Joan Burstein of Brownsto learn about her formula for success.

WORDS: COLIN MCDOWELL IMAGE: MICHAEL HEMY

LONDON, United KingdomImagine.You are sitting in the lounge of one of

the worlds great hotels, waiting for a lady

whom you have not met to join you for

afternoon tea and, on the very dot of the appointed

time, she does. No longer young but still beautiful,

she is the centre of attention the minute she steps

into the room, ushered in by the manager. Some

wonder if she is a minor royal; others read her

delicate body language and carriage as proof that

she was once a prima ballerina, or even an actress.

But they are wrong.

This is Joan Burstein, chtelaine of Browns,

one of the most famous privately-owned fashion

stores in the world, which she set up over half

a century ago with her husband, Sidney, and

which she still presides over, both spiritually and

physically. Indeed, although she is not as involved

on a daily basis as she once was, her unique taste

and personality still permeate the store in Londons

South Molton Street.

And today, Browns is still very much a

family affair. Joans son Simon is the stores chief

executive, while her daughter Caroline is creative

director. Both are well schooled in the Browns

ethos, but Mrs B as she is almost universally

called with a mixture of awe and great affection

still stays abreast of the entire operation,

monitoring sales, customers and every last detail

that goes to making the shop so special. And what

is special about Browns, as Joan freely admits, is

that for her, to have a prosperous fashion store,

it is essential to have the trust and belief of the

customers. When Mrs B says she sees her loyal

customers and they are all loyal as friends,

this is not the mawkish sound bite with no

substance that others in fashion retail may

claim. It is the truth.

The woman who shops at Browns is looking

for something special, which, in Mrs Bursteins

view, is not synonymous with flashy. We dont do

event clothes or the drop dead look that swamps

the woman. These days, when it appears that

everything has already been done, a woman must

learn to create her own vision of herself and how

she wants to look. When she is dressed and looking

in the mirror, she must see herself, not the clothes.

No wonder her customers trust her and she

trusts them. And, of course, they are friends. How

could they not be? Shopping at Browns is a life-long

partnership, an ongoing lesson in good taste, by

which we do not mean anything fuddy-duddy but

clothes crafted with imagination and control.

This philosophy of trust and partnership

extends to her staff past and present. Even today,

the ones who helped her make Browns unique are

still emotionally tied to the shop and the woman.

Robert Forrest, who came to her in 1972, at the

age of 23, is a good example. He and Mrs Burstein

still have a relationship built on mutual trust and

belief in each others abilities. I remember being

with Robert in Brazil a few years ago, when he had

started his freelance career. And encountering a

jewellery designer who was doing marvellously

bold designs, Robert immediately said, Im going

to phone the Mrs (as the shop staffoften called

Mrs Burstein). She will love this. He did. I heard

him describing the jewellery and when he came

offthe phone, he made a sizeable order on Browns

behalf. Robert knew his former boss taste and

Joan trusted his eye sufficiently to agree to the

deal without even seeing the jewellery.

It says everything about Joan Burstein as

a mentor, guide and friend to her staff. Indeed,

she once told me that she does not always warm

to everything that is bought for the various Browns

boutiques by some of her young buyers, but she

knows that retail can never stand still and is

delighted when their viewpoint is vindicated by

sales figures. She is also happy when they move

on to new things: Richard James, Marion Hume,

Yasmin Sewell and Mandi Lennard are just a few

of the many former staffers who have benefitted

from their time at Browns, just as at Feathers,

Mrs Bursteins earlier store, where Manolo Blahnik

learned the ropes while selling jeans.

Sarah Harrison, who was with Browns even

before Forrest and went on to run Ralph Laurens

affairs in London, recalls the early days when

the Missoni consignments arrived at the shop:

The Mrs was down on the floor with us girls,

as excited as a child on Christmas morning, selling

the clothes before they had even been booked in.

She loved making a sale and was always ready to

help us to do the same, even to getting down on

her hands and knees and pinning a skirt hem for

a client to convince her that the look was right for

her. We all loved her. She was our surrogate mother

and her remedy for any problem a hangover,

stomachache or love trouble was always the

same: Eat a finely grated apple, dear, and youll feel

so much better! We were encouraged to have our

own customers and mine included Anna Wintour,

Linda McCartney and Margot Fonteyn.

But, over the years, Bursteins influence

on fashion has reached much further than South

Molton Street. She was literally an oracle. At the

collections, people would ask: Has Mrs B been

in yet? or, if she had, Did Mrs B start to write?

(the code for placing an order). Her knack for

grasping the zeitgeist and pioneering new labels

was such that major stores in London and New

York hung on until they were sure Mrs Burstein

had indicated her interest in a designer before

buying into a collection with more certainty than

they would otherwise dare, knowing that they

could trust her taste better than their own.

They could do so because of Joan Bursteins

passionate love of fashion and her desire to share

her knowledge with all once she had the label

in question under contract. Indeed, she was also,

in the most elegant, lady-like manner, a most

determined fighter for what she wanted and,

it would seem, always got it, no matter how tough

her terms.

Mrs B also had terrific attention to detail.

Every Monday afternoon, she would manually

go through all the sales of the previous week

with the buying team, which consisted of her,

Robert Forrest, Francoise Tessier, and Andrea

von Tiefenbach. As Robert Forrest says, Joan

monitored every sale and was always very decisive

in her buying. She always had a set budget in her

head but if she wanted a certain label and knew

that she could sell it, she was prepared to exceed

that amount and buy more heavily. And she never

really made a mistake. She always phoned Sidney to

check on the financial situation, but he always said

that if she felt it really was right he would trust and

support her judgement.

Fashions changed, but Mrs Bs antennae

remained highly tuned to new designers, even when

she has felt they were not right for her customers.

But the boldness of her instincts never let her

down. She understood John Galliano from his

graduate collection and she bought it all, putting

it in the windows at South Molton Street. Most

retailers had dismissed it as unsellable fantasy but

she proved them wrong. At Browns, Gallianos work

was not just a one-offnovelty, as it might have been

in other hands. She made it saleable by showing the

collections beauty and subtlety of cut to her clients

clients who kept coming back for more, as they

did with Alexander McQueen, Hussein Chalayan

and Meadham Kirchhoff.

As Manolo Blahnik put it to me, Joan

embodies the talent of how to buy and how to

foresee what is going to come. She has this gift.

Always has and always will. I have an incredible

respect for her. She is a supremely elegant person.

As Mrs B herself says, I could never do

the ordinary.


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How does a company that proudly eschews theusual means of generating desirability remainthe most desirable luxury brand in the world?WORDS: SULEMAN ANAYA

The Humanity of

HERMS

PARIS, France A Greek shepherdsstaffhangs by the door in the office of

Pierre-Alexis Dumas. The artistic director

of Herms enjoys showing it to visitors

and explaining how it is hand-crafted to the perfect

height, so the shepherd for whom it was made

can use it to rest (or even sleep!) while standing,

simply by propping its multi-purpose handle

under an armpit.

Dumas, who is half-Greek and knew the

staffs maker, vividly explains how it was created

from a single branch, patiently trimmed until

it grew sufficiently tall and straight, then steam-

bent at one end to get the curvature of the handle

just right.

This beautifully encapsulates Dumas ideas

on design, craftsmanship and life. The staffs

rudimentary, hand-made elegance is elevated by

its thought-out functionality, a combination that

takes on an even deeper sense of humanness from

its precise connection to a place and a person that

Dumas lovingly relates.

And while he can sometimes sound more

like a scholar of Eastern philosophy than a creative

director, the 47-year-olds thoughtful ruminations

about what makes his family business not only tick

but thrive are the opposite of grandiloquent.

The cane once belonged to Dumas father,

Jean-Louis Dumas, who, over the course of his

30-year tenure, turned Herms into the global

enterprise it is today.

In 2013, the groups consolidated revenue

totalled 3.75 billion (about $5.2 billion), a 13

percent increase over 2012, at constant exchange

rates, with an operating margin of 32.4 percent,

the highest ever recorded in the companys history.

And while major luxury rivals like Louis Vuitton

and Gucci have experienced slowing growth

in the all-important Chinese market, Herms

sales in China continued to grow by double-digit

percentage points.

No wonder LVMH has shown an interest in

Herms, quietly building a stake of about 17 percent

in the company between 2002 and 2010, leading

to a fractious and drawn out legal dispute between

the conglomerate and Herms. LVMH now retains

a 23 percent stake in Herms, but was fined 8

million (about $11 million) last year for violating

public disclosure requirements. A separate criminal

investigation is under way.

But over at the Faubourg, as everyone at

Herms refers to the companys headquarters,

people seem to go about their work quietly, and

happily. The mood is calm and zen-like but

also focused and business-like.

We belong neither to the world of luxury

nor to the world of fashion, Dumas tells BoF in

his light-filled office in the heart of the Faubourg.

This is a family house that goes back six

generations. We did not invent our craft, we

are the recipient of an age-old tradition, mixed with

something which is perhaps proper to my family

a desire for excellence and maybe something

a little bit obsessive and mad about detail.

Talking to Dumas and other leading figures

at Herms, one realises that everything you think

you know about this venerable brand from

the companys fabled history to its near-fanatical

dedication to craftsmanship is, at once, more

layered and less mysterious when seen from

the inside.

Take creativity, for instance, the lifeblood

of any company in the business of designing and

selling beautiful things.

What Herms is always searching for is this

ideal of beauty, of perfect shape. The right thing,

the good thing, the beautiful thing, says Pierre

Hardy, creative director of the brands footwear

and fine jewellery divisions. Its something that

people are afraid to talk about. Nobody talks about

the beauty of something anymore, but when people

see it they recognise it.

Dumas, likewise, channels his own worldview

to illuminate the brands unique attitude towards

beauty. I believe anyone can reach eternity in an

instant. When I look at our collections, I am always

looking for that miraculous moment when I am

surprised and feel such a strong emotion that that

moment is like pure gold and stops time as we know

it, he says. That to me is the experience of beauty


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17

or grace, a feeling of absolute timelessness, but

you can also experience it through shape or colour.

Its sincere convictions such as these that

explain the zealous quest for perfection espoused

by the craftsmen, designers and illustrators who

work for Herms. Every Herms object has to

be perfectly done and in the best material and in

the best way, thats a matter-of-fact for us, a basic

standard. If its saddle, it has to be the perfect

saddle, and the same goes for every other category,

explains Hardy.

But high-minded ideals aside, even Dumas

acknowledges that the goal of so much creative

zeal is the necessity, at the end of the day, to

produce things that people want to buy. The

delicacy of a fabric, the touch of soft leather, the

scent of a fragrance. I want people to come into

a Herms store and smile and think I want that,

I need to have that, because I like it.

Right away, however, almost as if he were

constitutionally obliged to imbue what might

have been a pragmatic statement with a touch

of philosophy, he adds: I want our customers

to indulge in a moment of pure lightness, because

it is in those moments of dream where you have

insights into life, and into the future.

Indeed, the pure lightness and reverie

that Dumas likes to evoke are at the very heart

of the Herms universe. It was what first struck

Christophe Lemaire, Herms artistic director

of womens ready-to-wear, long before the

brand became his employer (he succeeded

Jean-Paul Gaultier in 2011).

I remember well when I was much younger,

I used to go for lunch near the Madeleine [church]

and I was fascinated by Herms windows, by their

excellence and quality, but also by their whimsy

and generosity. There was always something quite

charming, something not completely controlled;

the poetry of the windows really touched me, the

colours and richness of textures. I always t hought,

what a beautiful house, recalls Lemaire.

According to Dumas, the brands window

displays are a portal into the culture of Herms.

I would say that the way we communicate at

Herms today can find its root in the art we

developed of making our windows, he says.

The only purpose of Herms windows [has

been] to please people.This ethos is reflected in all of the ways

Herms relates with the public, from its events

charmingly old-fashioned affairs devoid of strained

efforts to appear sexy or cool to the near-absence

of celebrities in the brands advertising.

Indeed, Dumas doesnt hide his distaste

for the prevalent PR and marketing tactics of

our times. One thing I deeply dislike is a form of

cynicism and trying to manipulate peoples minds.

Everything we do [at Herms], we do it because

we believe in it it has to be meaningful and relate

to what we are trying to express.

Lemaire singles out the relative spontaneity

with which things are done at Herms as one of

its main assets, suggesting that the playfulness

customers often perceive in the brands offering

is in direct measure to the companys inner

workings, and only, therefore, so effective.

Everybody works very hard at Herms, but

in a very lively way. I had never experienced that in

my previous [work] experiences, says the designer.

Sometimes, [its] a little bit naive. The quality,

the product, and the creativity always come first,

before any marketing that is very much rooted

in the Herms working culture. I think thats what

makes the difference. When you try hard to please

and seduce, and you anticipate what people expect

from you, it doesnt work. Its better to know who

we are, be ourselves and believe in our own values,

and they can be universal, if theyre true.

Lemaire attributes the enormous goodwill

the brand enjoys among its customers to the

companys honest and lighthearted stance. At

times it seems like the fashion and luxury world

has become a little bit like a war [zone]. And

Herms doesnt want to play that game. At Herms,

we are very confident in what we stand for and in

the excellence of our work. And basically the client

understands that, which is the main point at the

end of the day.

But as the world has changed, so has

Herms. Todays company is a far cry from its

origins as a small enterprise of workshops piled

on top of each other making dreams come true

for a mostly French clientele. Herms is now a

large, global, publicly traded company. So, how

does it keep the creativity that feeds its success

flowing? By reinventing itself, again and again.

Every year, Dumas gives his creative teams

a theme, a leitmotif, to inspire and challenge

creation across divisions, and to help reconfigure

the houses codes in a fresh way. For 2014, Herms

creative theme happens to be Metamorphosis.

As Dumas put it, [Its about] the ability to reinvent

ourselves season after season. It is through

constant change that we actually remain the same

in spirit and are able to maintain our culture.

While much is made about the Herms

unchanging values its dedication to creativity,

craftsmanship, and quality over its 177-year

history, an unusual commitment to reinvention

and change has played an equally important role

in maintaining the brands currency.

Specifically, while craftsmanship and

excellence have remained the houses constant,

fiercely upheld values, its the way their application

has evolved and been repurposed that has

propelled Herms to the pinnacle of the global

luxury market. Without the farsighted decision,

generations ago, to transfer its core expertise into

new areas in order to ensure its future, Herms

would have never grown from a saddlery into

I think Herms objects are desirable because they reconnect

people to their humanity Our customer feels the presence

of the person who crafted the object, while at the same timethe object brings him back to his own sensitivity, because

it gives him pleasure through his senses.


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18

a thriving multinational luxury goods enterprise.

It was Pierre-Alexis great-grandfather

Emile who, in the 1920s, in order to stay in

business, decided to apply harness- and saddle-

making techniques to other fields namely, the

creation of luggage and bags. Hence the Kelly bags

famous saddle-stitch. The same adaptability and

gift for reinvention characterises Herms today.

While everyone loves to talk about the

importance of craftsmanship at Herms, Dumas

himself is quick to emphasise that artisanalexcellence in and of itself means little if it isnt

applied in a timely and business-savvy way.

Craft can only survive if it finds a natural

application and if it finds a market. What a craft

produces has to be relevant to the world we live

in today, he says. If craft does not reinvent itself,

it dies. If we were still making harnesses, Herms

would not exist anymore.

That is why we constantly re-design [things]

and try find new applications and new ideas all the

time because thats what keeps craft alive. Its

production. Its the ability to make objects that

will sell.

But its impossible to assess the culture of

Herms without considering what is perhaps its

most important element: the people who make

up the organisation. In a day and age where

people change jobs with increasing frequency,

at Herms its not unusual to meet employees

who have worked with the company for decades.

Vronique Nichanian, for instance, artistic director

for Herms menswear collections, joined the

company in 1988. And the same woman

Leila Menchari, an institution unto herself

has been doing the Faubourg flagships famous

window displays for more than 35 years.

Everyone always talks about the beauty

of the craftsmanship, about the Kelly bags, the

excellence of quality, and so on, and obviously all

this is amazing. But what I think is most distinctive

of Herms is its work culture. The importance

of human relationships for Herms is something

that is difficult to explain unless you have

experienced it, says Lemaire.

Undoubtedly, being a family-run business

has shaped the culture of Herms more than

anything else. But crucially, the idea of family

extends beyond the immediate Herms clan.

As Lemaire pointed out, Its not a pyramidal

organisation like other luxury brands its

more like a family, its all very spontaneous,

and sometimes can even appear a bit messy.

And yet, this is an old, young house, as

Dumas puts it. The most striking thing about a

visit to the companys leather factory in the Saint

Antoine neighbourhood of East Paris is the number

of young craftspeople working and training on

the brands coveted bags. Far from the grouchy

guard of old white men and women one might

expect, here one encounters a population that

is a surprisingly harmonious cross-section of

French society today.

From a pierced and tattooed girl with a

shaved head, to black, white, Asian, Muslim, old,

young, gay and straight artisans, at Saint Antoine

a seemingly happy mix of people with diverse

backgrounds go about their craft with the same

serene concentration one encounters among the

employees at the Faubourg.

It was Jean-Louis Dumas who reinvented

the notion of craftsmanship to make it the symbolic

and practical backbone of a contemporary luxury

goods company with an international distribution

network. My father had a double vision. [Along

with international expansion, he] introduced a

notion of contemporary craftsmanship. He asked

himself, What is the space of the craftsman

in a fast-changing modern world? and saw it

as his responsibility to create a truly modern

manufactory, where a craftsman would be

treated with respect in order to continue to

be able to do the best work with his hands.

This guiding ethos, to provide a workplace

where artisans are given the space and respect

to work under conditions that are as close to ideal

as possible, thus enabling them to identify with

their profession and produce at an according level

of quality and efficiency, is put into practice at the

31 manufacturing facilities Herms operates

across France. (There are 37 manufactures

worldwide.)

No more than 200 people a cap intended

to maintain a human scale and foster a sense

of community work at any of these centres,

often at ergonomically designed workstations in

daylight-flooded, wood-and-concrete facilities

that wouldnt look out of place in a magazine for

progressive architecture.

But can good work conditions alone account

for why people stay at Herms for so long ? Maybe

not. Perhaps, in todays world, it takes more.

Indeed, Pierre-Alexis Dumas inherited his fathers

sense of responsibility, but he has expanded that

vision with his own contemporary, idealistic

imprimatur.

For the socially-conscious man

currently at the creative helm of Herms, the

entire design process must be accountable, while

offering employees an opportunity to make a

difference. If theres one thing I have learnt, its

that you have to think hard about what you do;

at Herms, we think about the shapes and objects

we create its a responsibility. You have

to think about t he consequences, how what

you make will affect peoples lives.

Consequently, Dumas thinks the

companys level of employee satisfaction has

to do with the larger sense of purpose that

Herms provides. I think people enjoy

working for Herms because they feel that what

they do is meaningful. If you have the feeling

that what you do somehow generates something

positive, today, thats what makes you want to

stick to the company you work for. And I try to

reinforce that feeling of working for a company

that stands up for certain humanist values that

are relevant.

I think Herms objects are desirable

because they reconnect people to their humanity,

says Dumas. [Our customer] feels the presence

of the person who crafted the object, while at

the same time the object brings him back to his

own sensitivity, because it gives him pleasure

through his senses.

I see Herms as an oasis. I see us as the

recipients of a very important culture which is

related to the human hand and a sense of respect

for each other, reflects the great-great-great

grandson of Thierry Herms, who founded the

company in 1837.

A company that makes only money

is quite poor, thats for sure.IMAGES:COURTESYHERMS


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Instagrams

START-UPWhat can fashion-techcompanies learn fromInstagrams success?Co-founder and CEOKevin Systrom shareshis start-up secrets.

WORDS:VIKRAM ALEXEI KANSARA

PALO ALTO, United States Instagramrocketed from launch to $1 billion

acquisition by Facebook in only 18

months. At the time, the company had

just 13 employees, working from a small space

in the South Park area of San Francisco, but had

managed to acquire 30 million users (including

many of fashions die-hard social media holdouts)

with a simple, focused and joyful app that let

people quickly take, beautify and share square-

shaped photos.

Today, Instagram has added video to its

offering and grown a community of more than

150 million monthly active users spread across

the globe.We think of our user base as a

community of people contributing to the larger

vision of capturing and sharing the worlds

moments, Instagrams co-founder and CEO,

Kevin Systrom, told BoF. Right now, we define

photos and video as the basis for a moment, but

that doesnt mean you cant add the location of the

moment, the time of the moment, who you were

with, who is in the photo all these storytelling

outlets, I think, are very important for Instagram.

When I say moment, a synonym you could use

is story. I mean we really are about storytelling

through a visual medium.

Given the apps rapid-fire, visual nature,

perhaps its not entirely surprising that no other

sector has embraced Instagram with more energy

and enthusiasm than the highly visual, fast-paced

fashion industry. In fact, it often seems like the

entire fashion ecosystem is active on Instagram,

from first-mover mega-brands like Burberry

and pioneering imagemakers like Nick Knight

to models-of-the-moment like Cara Delevingne

and fast-scaling retailers like Nasty Gal, which

has used the platform to develop a uniquely

powerful connection with its loyal customer

base of bad ass girls.

It does kind of surprise me, but at the

same time it makes a lot of sense. If you look at

a newsstand, something like two-thirds of the

magazines relate to fashion or beauty. I think

that Instagram as a visual platform just fits very

naturally with how the fashion community

communicates its work, observed Systrom.

When we find natural partners in fashion,

we find that they produce great content, our users

love watching it and viewing it and its this

natural cycle, this positive feedback loop: the more

people love seeing content on the platform, the

more they use it, the more they post and the more

other brands want to be on it as well, he added.

Our goal is to capture and share the worlds

moments and if we can bring all t hese people

together, starting with fashion, I think we will

end up capturing and sharing far more moments

than we would have otherwise.

Tellingly, some emerging designers say

getting their pieces on celebrity Instagram

accounts is a more powerful driver of sales

than being featured in the pages of established

fashion magazines. So does Instagram have

plans to experiment with e-commerce? Um,

definitely thoughts, said Systrom. But I think

Instagram is such a general platform I mean

we have students, cooks and chefs, people who

make crafts, photographers that focusing on

a specific retail product feels a little early in our

lifecycle. That being said, we see the natural fit

for it going forward and I think if there is a way to

build products to allow companies to express their

products to their consumers, then we are going

to end up working on it. But right now there is so

much opportunity in branded moments that that

is what we are going to focus on.

Michael Kors ran Instagrams first ad back

in November 2013, earning the brand 218,000

Likes (a 370 percent increase over the average

of the companys previous five posts) and over

33,000 new followers (16 times more than usual)

within the first 18 hours, according to Instagram

marketing analytics platform Nitrogram.

In recent years, the global fashion industry

has seen an explosion of digital innovation. Large

sums of venture capital have poured into young

fashion-tech companies with business models

ranging from social commerce to collaborative

consumption. Valuations have been sky-high. But

with the exception of early e-commerce pioneers

like Net-a-Porter, Yoox and Asos, there have been

very few big exits. Whats more, few fashion-tech

companies have achieved the kind of exponential

growth and stickiness that most consumer

Internet start-ups aim for.

So how was Instagram able to achieve such

astounding results in such a period of short time?

And what lessons can fashion-tech start-ups learn

from its phenomenal ascent?

I am not sure if it is one single thing rather

than the interplay of a lot of different variables,

said Systrom. In my experience, the best apps in

the world solve problems for people and, often,

they are problems that are uniquely solved by that

application or that business.

BoF spoke with Kevin Systrom to identify

the secrets to the companys remarkable success.

No-one wants to pull all-nighters on ideas

that they dont really care about. For me,

photography has always been a passion of mine.

I love the nature of visual communication and

I believe that its the next generation of the

way we are going to communicate, rather than

just text or audio. I believe that Instagram could

be at the forefront of it. If you look at my Flickr

account say in 2007 there are photos on

there that are square cropped, filtered, just

the way that Instagram does, but I was doing

it manually in Photoshop. What I did was take

my passion and programmatise it and release

it to the world with the correct set of

ingredients around it.

TAP INTO YOUR

PASSIONS

In my experience, the best apps in the world

solve problems for people and, often, they

are problems that are uniquely solved by that

application or that business. I t hink it is really

important to stay clear with your users about

what you are trying to solve. People dont just

want more features, people want strength in

the features that solve their problems. When

you hypothesise too much, or dont go towards a

solution that solves a user problem, then I think

you get stuck. If you just listen to users, and

listen carefully, and interpret it correctly you will

build the right thing. What makes us successful?

I think it is the user-centric, problem-centric

focus of the product development.

SOLVE A PROBLEM WITH

LASER-LIKE FOCUS

What a lot of people dont know is that

we were working on a different idea before

Instagram, a social network which let you check

in and add photos. But it wasnt quite clicking

with people. It was fine, but it wasnt quite

clicking. Instagram really, really worked. It was

about watching what users did and what they

loved. Far too many companies stick to their

initial idea. But in product development, you

need to move quickly, while challenging your

assumptions. We threw away stuffthat didnt

really matter and we doubled down on stuff

that people told us mattered. We followed the

trail. And by following the trail and blazing new

ones that is how you end up succeeding.

PIVOT QUICKLY

& DECISIVELY


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SECRETS

I think visual design matters a lot it is

necessary, but not sufficient. There are plenty

of apps in the world that are really poorly

designed that people love. There are websites

that are this way as well. In fact, there are

some websites that are kind of known for not

being that beautiful and they work very well.

I think design is far less about aesthetics and

far more about usability and experience, and

the best designers in the world can do both:

deliver usability and make it beautiful. But I

mean, I think for Instagram, being such a visual

platform, it required us to put a lot of thought

into how beautiful and usable the app was.

DELIVER A BEAUTIFUL

& USABLE EXPERIENCE

In the beginning, keeping it lean was pretty

important for the stage of growth that we were

at. We were a single platform; a small group of

really talented engineers tackling big problems.

But you only stay lean for so long. Its kind of

like being in an aeroplane. You stay low when

you take offto gather speed, but you can only

stay low for so long, because you are bound to

hit something like a tree. You have to take off

at some point. I think our goal was to stay low

and gain enough speed, then really gain the

momentum and gather enough users to take

offand branch into different areas.

TAKE OFF

LEAN

It was really about Mark [Zuckerberg]s

commitment to building out a social future: the

idea that a company could create different ways

for people to connect and make the world more

open. Fundamentally, they were committed to

the same mission we were committed to and I

think that partnership just made us both stronger.

There are a lot of companies where it wouldnt

have made sense. There are many acquisitions

where media companies buy up social companies,

for example, and it never really mixes well. But

when a social company and a social company

come together with different ways of approaching

the same mission, that is when you end up getting

the value of bringing two things together.

PICK THE

RIGHT PARTNER

What makes us successful?

I think it is the user-centric,

problem-centric focus of

the product development.

IMAGE:GETTY


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Scaling a Craft-Based Business

JOHN LOBB

N

ORTHAMPTON, United KingdomNo fewer than eleven rivers dissect the

countryside surrounding Northampton.

From the River Avons tortuous upper-

course, habitually prone to breaking its banks,

to Rains Brooks shy babbling, the areas unique

topography, which supplies the constant streams of

rushing water required to tan leather, has defined

the English town and its inhabitants for centuries.

The visitor to Northampton will at once

be reminded, by the leather aprons and grimy

faces which haunt the streets, that he is in the

land of shoemakers, says MurraysHandbook

for Travellers,published in 1878. Its a fitting

description of a town where, at the close of the

19th century, its estimated that half of the 87,000

inhabitants worked in the shoemaking industry.

Many were skilled labourers, capable of crafting

welted shoes, made using a traditional method

that allows them to be resoled repeatedly. But

of so many, few remain.

Only a handful of British shoemakers, such

as Edward Green, Churchs, Trickers and Crocket

& Jones, along with Paris-based Berluti and JM

Weston, continue to manufacture welted shoes

to traditional standards. Prada Group, which owns

Churchs, has invested significant sums in the

brand, opening 18 new stores since 2001, while

LVMH is currently in the process of recasting

Berluti as a full-blown lifestyle proposition. And

yet the most revered of all welted shoemakers,

the Northampton-based John Lobb, has yet to

expand with the same impetus. Until now.

We are a 25 million (about $40 million)

business worldwide, which, all things considered,

is small, and small is sometimes beautiful. But

small can also expand to being bigger, said Renaud

Paul-Dauphin, chief executive of John Lobb since

2007 (and an employee of its parent company,

Herms, for twenty-five years), over the din of

the shoemakers Northampton factory.

Traditional craftsmanship is the essence

of the John Lobb brand. Its factory is startlingly

hive-like, alive with the noisy buzzing of chattering

machines, the sounds of well-aimed hammer blows

and the flap of buttery leather as it is unrolled

by one of eighty-five expert pairs of hands, each

playing their specific roles in crafting some of the

finest shoes in the world.

But how is it possible to grow a brand with

a business model rooted in traditional, labour-

intensive craft, while maintaining its essence?

Certainly not by compromising on the

quality of production. We will be achieving that

by expanding our core business, opening

up distribution but the prerequisite, of course,

is to have a sound and strong production facility,

explained Paul-Dauphin.

At the apex of John Lobbs product offering

is its bespoke service, where prices start at about

$7,000 for a customers first pair of welted shoes,

which require craftsmen to complete 190 distinct

steps to produce. The companys by-request

and made-to-measure services use the same

production techniques, but leverage standardised

lasts, the foot-like forms used to define the shape

of a shoe during the manufacturing process.

Both require interaction with a John Lobb

representative to take personal measurements

and consult on the product. The brand also offers

ready-to-wear welted shoes, constructed using

standardised lasts and available to buy straight

offthe shelf.

The growth generated from the

Northampton site will be coming from these

ready-to-wear welted shoes, revealed Paul-

Dauphin. Bespoke is very much haute couture.

You cant make a living out of bespoke.

At John Lobb, production of ready-to-wear

welted shoes has already grown. Today were

making profit. John Lobb was not making profit

a couple of years ago, said Paul-Dauphin. From

where we were two to three years ago to where

we will be in five years youre talking about

doubling the volume. In five years, our objective

is to grow the business to between 50 million

and close to 80 million.

But this kind of growth is still finite.

There is a physical limit to what we can produce

in this factory. We believe it would be unrealistic

to do more than 1,000 [pairs of shoes per week].

We dont have enough space, but that doesnt

preclude us from buying another factory for welted

[shoe production], he said. All things are open.

In order to increase productivity in its

existing space, John Lobb will streamline its

operations. There [is] a lot to gain from efficiency,

productivity, all of that. First, the objective is

to take [time to market] down to ten weeks

from eighteen, said Paul-Dauphin. More than

that, we can do things a bit more cleverly or

efficiently, training people even more than we

have; keeping the value of what we do, but not

being afraid to question it and do it better,

in essence, maintaining the craft, but doing

it more intelligently.

John Lobb also plans to expand its product

offering beyond welted shoes. The company

already sells non-welted ready-to-wear shoes,

sourced in Italy, as well as ties, belts, small leather

goods and socks. Non-welted shoes are something

we strategically wanted to grow, because it has to

do with the market and the John Lobb customers

expectations, he said.

But this does not mean abandoning the

core values of the brand. I am going to grow

my non-welted business as much as I need to

accelerate the turnover of the welted shoes,

explained Paul-Dauphin. Otherwise I would

kill the business model, which is very much built

on know-how. I dont want to lose that. You have

to have a certain balance.

Over the next five years Paul-Dauphin

intends to double revenue coming from non-welted

shoes and other accessories, making this 30

percent of the business. At present, it is 85 percent

welted shoes and 15 percent accessories [including

non-welted shoes]. To become better balanced

between shoes and accessories, were going to

be giving more room to the non-shoe products

inside our stores.

Paul-Dauphin also has plans for reshaping

the companys retail strategy, a move which will

further boost revenues. About 75 percent of

the business is direct-to-consumer, while the

remaining 25 percent is wholesale. I intend

to increase the direct retail component to 90

percent, he said.

The brand currently has 15 directly operated

stores and 7 concessions. Although present in

North America and China, John Lobbs retail

presence is heavily weighted towards Japan and

Europe. Accordingly, geographical expansion is

a critical part of the growth strategy. Today, the

expansion of our business worldwide has huge

potential. China is only the beginning for us; in

North America, we have only two stores; South

America, no distribution. Id like to stay focused

on where we are and expand on that. We will

do it in our own way and in keeping with the

know-how of the company.

In December of last year, John Lobb opened

directly operated stores in Tokyo and Shanghai, as

well as a concession in Hong Kong; in 2014, it plans

to open a fifth store in China, located in Shanghai,

a third store in the US, located in Houston, Texas,

and a boutique at Charles de Gaulle airport in Paris.

But if the balancing act of realising John

Lobbs global potential whilst retaining its craft-

focused heritage and core values seems a challenge,

its parent company Herms offers proof that its

indeed possible.

Pierre-Alexis Dumas [artistic director of

Herms] told me the other day that John Lobb is

like Herms was in the 1960s [when] it was focused

on silk and leathers and there were other satellites

to its business, said Paul-Dauphin. Axel [Dumas,

chief executive of Herms] and Pierre-Alexis

look at John Lobb as a gem. Herms was founded

in 1837 and John Lobb in 1849. You have to pay

respect to what they originate from: the backbone,

the savoir-faire, the craftsmanship that is shared.

Whether the companies shared culture

will be enough to enable John Lobb to follow

in the footsteps of Herms remains to be seen.

What is certain, according to Paul-Dauphin,

is that the support of Herms and the support

of a faithful shareholder with very strong

understanding of the values of John Lobb,

so close to the values of Herms, is essential.

John Lobb has been producing shoes in the English town of Northamptonsince the mid-19th century. Now, the revered shoemaker is set to grow.

But how do you scale a brand with a business model rooted in traditional craft?

INTERVIEW: IMRAN AMED WORDS: ROBIN MELLERY-PRATT IMAGES:DUANE NASIS


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Creating

CULTURECreating a successful company culture dependson the positive collision of the right people andthe right context.

AN ESSAY BYANDY DUNN

No one gave me a

recipe for how to create

company culture. I have

been lucky to piece

together the wisdom

of many who have gone

before me.

Most of the

time when you need

something at a young

company, you make it. If you want to sell a product,

you create it. If you need a head of marketing, you

hire one. If you want to create a great company

culture, what do you do?

The lack of a clear answer on this is why

I believe most companies dont have a great culture.

They want culture to matter, so they say it does

but caring about having a great culture isnt the

same as having one. The reason? Its not obvious

how to make great culture. Sometimes, it can feel

as if it is revealed to you, like a religious mystery.

But do not despair. My belief is there is a science

to it, although the recipe calls for ingredients that

are not easy to conjure.

Culture is an output of a bunch of inputs that

have to come together the right way. Specifically,

it is the collision of people and their context, how

they interact with each other in that context,

and how that context evolves based on those

interactions as they multiply. By the time you

see a culture is bad or more often (and just as

pernicious) only okay its a complex thing youre

dealing with, like a Mexican mole sauce with 29

ingredients that tastes funny but you dont know

why. To influence it can seem overwhelming.

But it can be influenced if you have a passion

for doing something incredibly hard which

is not only articulating what your culture is, but

also influencing it by determining who gets to

stay to create it.

This is hard to say because it sounds mean:

the people you fire are more important to your

culture than the people you hire. Its a half-truth, as

you have to hire people who are an outstanding fit,

but an important half-truth because the best way

to protect the environment is to recognise where

you have erred and course correct. You reveal that

culture as a by-product of who stays and who goes,

and to effectively experiment your way into what

your culture is by learning who fits and who doesnt

and by learning what exactly it is they are fitting

into. To do this requires courage and confrontation.

You muster both of these by telling yourself its

what you must do to make the company safe for

your best people, which should be the only people.

During a scary moment of meaningful

turnover during Bonobos early days, we articulated

what we viewed to be the five core human values

of the best people we had ever hired. These

traits became our core virtues self-awareness,

positive energy, empathy, intellectual honesty and

judgment the centrepiece of what we look for in

who we hire, promote, and fire. The bad news?

Its hard to find people who meet all of your criteria.

The good news? There are a lot of people in the

world and the difference between being willing to

do the hard work of finding them and not doing so

is the distance between mediocrity and greatness.

When hiring, it is tempting to employ

someone who has done it before. You actually

dont want that person. You want someone who

is about to do it. After all, if theyve done it before,

why would they do it again? Either theyre not

ambitious, not growth-oriented, or werent that

good in their previous role. No matter which it is,

you dont want them. This is one way to screw

up your culture experience-based hiring leads

to bringing in those who have the right credentials,

but not the right fire in their soul.

Once we put our core virtues in place,

I wrongly thought we were done. We were only half

way there. Half of fit is about personality; the other

half is passion for the mission of the company.

To gauge this, you need to actually know what the

mission is. Most founders I talk to cant articulate

what their mission is I would know, because

I was one of them. When we finally articulated our

mission, it enabled us to hire the right technology

leader for the first time in six years after multiple

tries. Were now building the best software

engineering team in the history of branded apparel

retail because we finally did the hard work of

finding someone who loves technology and clothes.

Youve got the right people. Now youre done,

right? Wrong. People are only part of culture. The

other part is the context in which they operate,

which is influenced by myriad things: goals,

feedback, promotions, compensation, seating

arrangements, whats celebrated and whats left

unsaid. Any of these are an essay in themselves,

so heres my belief on the most important things

to do if you want to create the right context.

There are two basic ways to motivate people:

fear and joy. I think the former is easier in the short

term, and the latter is harder but more sustainable

for the long term. I once thought that holding up

a high bar for our team and withholding praise

was a way to get the best out of people. I was wrong.

From Joel Peterson Ive learned that there are no

diminishing returns to specific positive feedback.

Weve made company-wide recognition a core

part of every team meeting. More important are

the back-channel conversations, the hand-written

notes, the quick emails, the one-liners to honour

people when theyve done well, to be specific about

what theyve done well. Most important is to build

a leadership team that observes the John Gottman

principle that the healthiest relationships of any

kind have a 5-to-1 ratio of positive to negative

feedback. You have to develop a well of goodwill

to be able to criticise someone. They need to feel

they are in safe place to be able to see the uglytruths with you.

We once built a California office for our

NYC-based company. That was a mistake. By

creating a second office at this early stage in our

companys history, people couldnt see who they

were working with and they certainly couldnt

trust them. We ended up with two cultures, a

costly travel budget, and a HipChat account that,

while active, was woefully shy of the in-person

collaboration required between groups to build

a high-performing company culture. Recognising

that for all the benefits of jet travel and Skype, trust

and tribalism are still powerful forces of human

nature which create in-groups and out-groups in no

time this insight informed a momentous decision

to close that Palo Alto office even though we had

just built a great software engineering team and

informed other decisions back at our reunited HQ,

like the decision to invest in stairwell access and

glass walls. Its easier to trust what you see and it

certainly makes it harder to throw stones. In 2011,

Crains named us one of the top places to work

in New York City. We fell offin 2012, the year we

had a California office. After closing it in early 2013,

we came back on. This might all be a coincidence,

but I doubt it.

Whats more, if you want people to think

like owners, make them owners. The balance

sheet of most clothing companies are structured

to assume that their owners are geniuses, their

leaders are the only other ones who might deserve

equity and that everyone else is a peon. This

cant be true. At Bonobos we are structured more

like a Silicon Valley technology company than a

clothing company and I believe this is a source of

competitive and cultural advantage for the long-

term. The best way to have a child behave like an

adult is for them, over time, to become one. If you

want an employee to act like an owner, why not

simply make them an owner?

There is a saying: that which doesnt kill me

only makes me stronger. I disagree. It might make

you stronger. It might also make you weaker, and

Ive seen people made weaker by the things that

nearly killed them.

Similarly, I think the idea that you learn

as much by losing as you do from winning is

dangerous. Who do you think has more insightful

learnings about the game of baseball over the past

fifteen years the Chicago Cubs, or the Boston

Red Sox? Ive been a Cubs fan for thirty-five years,

my dad has for nearly seventy years, and we can

tell you, you have nothing to learn from us. Thats

why we just hired a new president. From Boston.

Two years ago, our site fell over on Cyber Monday.

We recovered impressively due to the amazing

work by our customer service team, the Ninjas.

Last year, we had an aggressive Cyber Monday

plan at Bonobos. The goal was nearly $2 million

in web sales. We hit it, right on the money. I think

hitting our plan in 2013 as a function of the whole

company coming together was a greater cultural

moment than reacting to the crisis.

Coming together when you are losing

is required to build a great team, but winning

more often than you lose is required to build

a great culture.

Andy Dunn is the co-founder and CEO of Bonobos

Inc., a New York-based startup that has helped

to define and prove a new model for vertically

integrated fashion retail in the e-commerce era.

E S S A Y


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The Business of Fashion

Imran Amed, Founder and Editor-in-Chief

Office of the Editor-in-Chief: Emma Clark, Communications and Events Manager

Vikram Alexei Kansara, Managing Editor

CONTRIBUTING COLUMNISTS AND EDITORS

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ART DIRECTION & DESIGN

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SPECIAL THANKS

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I N A S S O C I A T I O N W I T H

VI CTO RI A BE CK HA M

ILLUSTRATOR:

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