Rhone Launches Women's Collection

Published May 6, 2024, 12:52 PM

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Nate Checketts, Co-Founder & CEO of Rhone, discusses the launch of a women’s apparel line.
Hosts: Carol Massar and Tim Stenovec. Producer: Paul Brennan.

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So good, all right, everybody. It is official Roan, known for its apparel line for men. It's been around since twenty fourteen, now backed by Blackstone executive David Blitzer, former hedge fund manager Gay Platkin, and ex football star Tim Tebow and Moore, and now some might finally say, I will say finally out with the women's line. The line went live online for early access yesterday, fully launching next week. Back with us someone well known to our audience. He's been joining us since the very beginning. Natecheck, It's co founder and CEO of Roan, right here in our Bloomberg Interactive Brokers studio. It does feel like family. We've been watching you on this ride. First of all, how are you?

I'm doing great? I mean, I feel like Carol, you manift. I said this because the first interview You're like, Okay, so when are you going to do women's and such great stuff? Yeah? No, it's we are so exciting. We are so excited to bring this to the market, and the initial reaction has been unbelievable.

So why so long?

Wait?

I just kind of shu, why so long?

Sorry?

Well, we did a capsule collection back in twenty nineteen on International Women's Day, and the thought was, Okay, this will be a little test. We'll see how the market reacts to it. And it went well, and then, of course we have a global pandemic the next year, so we decided not to anniversary it. Yeah, we pulled back, and then really we made the decision two and a half years ago, Okay, we need to do this, but let's do it the right way. Let's think through every aspect. And it impacts everything from store layout to mannequins to models, to the brand marketing. How are you shifting the message? So we really brought investing class talent across every aspect of the business and starting most importantly with the product. And it just takes a while to do it, right.

Is it hard from a communications perspective because you've been known for a decade as being a place for men, and perhaps customers might walk by a store and say, well, I'm not going to go in there because they don't have product necessarily for me.

Yeah, I think that has been the brand marketing challenge. And I think if you look at the industry, there are certainly brands who have done this very well, shifted from men's to women's or women's into men's, But then there have been brands who have taken some big missteps in that. And one of the things that we were adamant about from the beginning is this is not taking our men's product and creating women's product. This is taking our customer, putting her at the center of the journey and making product uniquely for her, unique fabrications, unique fits, unique cuts, and that it can be the lines can be complementary, but they're not meant to be, you know, symmetrical.

How is it more difficult in terms of creating a women's line versus a men's line.

There's certainly a lot more competition. Yeah, and I think there's more pressure to have newness and be on trend in fashion. We joke in the men's space, it's like, well, make sure you have black, navy and gray and you're fine. But even the men's space has evolved over the last several years. The men are more kind of fashion forward and leaning into trent and style. So we brought in really a best in class team on the merchandising and the styling and the design side, and we're really seeing it on the initial reaction. We launched an early access yesterday and in the first day we started breaking on a couple of styles, meaning we were selling out of a few key sizes, which we had not anticipated to happen for the first four weeks. So the reaction has been just unbelievable.

What's the ultimate goal for revenue mix for this is it? Do you want this to be fifty to fifty? Do you want women to be sixty forty?

Now we're we've done a three year model and we see a path to getting the brand to a fifty to fifty mix. Women are obviously more prolific shoppers than men. They're just better at it. They know, they stop that, I hear that at home. They know what they want and they you know, they're willing to lean in and try new things. I think the challenge is if you can get a male customer, you can keep him generally a lot longer. He tends to go back to what he knows and likes. He's harder to get.

That's the men are lazy.

Yeah, yep, that's a good, good interpretation, like what you like exactly right. But women, you have to earn that. You have to earn that next purchase every single time, and we take that seriously. So to us, it starts at the fabric level, the quality of what we do, and I think as we put hands you know, everything from our fit model to our actual fashion models. They've said, you know, they work with every brand in the market and they're like, this is the softest best fabric I've ever felt. So we think we're doing something right. How do you go.

After getting the female customer? Women customers versus men, Like, I'm curious, what was your approach?

Well, we have a slight advantage here versus a new brand, which is we already have a big database of women. Thirty percent of our men's product was being purchased by women, which is about the inverse of some of the big public, more female led brands. It's usually like the opposite of that. But we had a database of active female shoppers, and then we've just been very strategic about going out targeting who we think she is on social building up some anticipation, some great pr We've had a lot of incredible press and you know, this is not a one month thing. This is a we've learned in ten years. You've got to keep consistent.

No shortage of this type of apparel for women out there. I mean, like it's weird to say og like, you know, it's not really even Lululemon, but you have Lululemon, you have Athleta, you have Yery out there. How do you differentiate, how do you make this distinct? How do you build this brand from the ground up?

I think one of the things that we have really prided ourselves on as we've built this line is almost every Active brand is based on the way West Coast and there is definitely a West Coast aesthetic. And what I've said internally is since when was New York not the capital fashion capital of the world. So we try and bring a New York aesthetic and trend and focus into Active. But we start with a root of performance at the center of what we do, versus taking kind of a ready to wear and then trying to use active fabrics. We combine the best of both worlds to kind of bring that to the market. And I think the other big focus for us is how do we make her you know, powerful, strong, independent. We think a lot of these brands look the same because it's all yoga, endless hours of yoga loops. But we think our customer is maybe she's sneaking yoga in in fifteen twenty minutes and she's working hard, she's taking care of people, she's strong, she's independent, and we want to position her that way versus you know, you've got two hours in a yoga studio to do whatever you want, because none of our customers live that way.

Interesting because as someone who's done yoga for a lot of years, I mean, there are yoga clothes, but they look like yoga clothes. I'm not really I'm not dissing them or anything.

Love them.

They're really comfortable, but there's there's a professionality. Is that a professionalism I guess sorry making up boards as it go, but a professional aspect to the things that you guys do that look it's just different.

Yeah, we we think about it as the difference of ath Leisure is obviously a term that has gained a lot of importance in the market, but I dost think you're Yeah, the way we think about ath leisure is it's made to look athletic, but you can't actually work out in it. Yeah, So we call it performance lifestyle, which is you can do anything in our clothes. You know, you know, I've run a marathon in our dress shirt. You can literally do anything, but you're going to look professional when you wear it.

Is that the same when it comes to the women's line, I mean the more active formal line that you had that you developed for men's came a little later than that first active wear stuff. Are you following a similar timeline? Are you going to kind of release everything right now?

Now?

We're following a very similar flow, which is let's root ourselves in performance. So the initial line you'll see is very active focused a lot of course to court. You may have heard we signed the LPGA, were the official Encourse apparel partner there, so you'll see us on a lot of green grass accounts, tennis courts, pickleball courts, and then a lot of the lifestyle will start to be added in afterwards.

So can we assume at some point and like, I know, we've got more time to come back, but like suits, like a suit that is kind of the casual, but do it for men.

Yeah, you'll see in some of the marketing. There's a lot of really exciting stuff that I think the professional woman will feel very comfortable wearing into the workplace.

Do you still have fun doing this?

Oh, my gosh, I'm having the most fun I've ever had right now. This is it's ten years, and certainly I've had periods of founder burnout. But I think since we took back full control of the business and we really kind of started to chart our own destiny, it just changed the way we feel about it.

You took back controlled eighteen months ago, roughly didn't make it public though until just last fall. Give an update on the business since taking full control.

Well, last year was our biggest absolute growth here ever, and the business is growing almost twice as fast this year. Yeah, So we feel really encouraged about that decision and the team that we've put into place and the investment in people, and you know, we have big growth goals. So we still feel like we're in the early innings of where this can go. But it's been a journey ten years.

We're talking with check Its Nate check It's co founder and CEO of rown A, still in studio with us, so expanding into women. You still talk about growth going forward ten years in what's the next ten years? Like, how do you think about it?

Yeah, well, sorry, no pressure. I think the thing that I am most excited about is we have from the beginning of our customer journey, we have focused on what we call mental fitness, which is really just an emphasis on mental health, taking care of yourself both physically and mentally. When we came into the active market, you would see all of these marketing messages of you're an athlete, you know, lift more weight, run faster, jump higher, and we think there's such a missing aspect of recovery and taking care of yourself and the space between your ears, and that is a very unique problem in the men's market. So it was an easy area to focus on. But everybody needs to talk about this. And what's great is the female customer is already naturally so much better at talking about it. So doing this together with our team has been really, really helpful and powerful. So what I'm most excited about for the next ten years is to be able to supercharge that and so we've got some big exciting plans in terms of how we're going to do that, how we're going to bring that to the market. And some of the unique things that we think about about being a wellness company. First, that just happens to sell clothes.

Wow, was that in your ethos from the very beginning or did that happen? Did that kind of transition happen over the pandemic? And you've spoken to us recently at length about the challenges that the company face that, yeah, you guys face during the pandemic.

Yeah, it has been part of the DNA from the beginning. I think during the pandemic we were able to crystallize what that mission was and part of it was having my own crisis going through some of that with the pandemic. But we have always believed that wellness is much more than esthetic physical fitness, which is really where I think most of these brands focus on with a hyper level of focus on professional athlete endorsements. We just love this idea that teaching people how to take care of themselves is the best way to feel good, and part of that is having a uniform that you feel excited and energized, but also enabling and empowering the conversation. We've posted hundreds of these events that we call minded Muscle events, which are twenty five minute body weight workouts followed by a group discussion, which is really like a group therapy conversation, and that format exists in Alcoholics Anonymous, it exists in a number of different formats, but it's been so successful in men's and we've had like groundbreaking moments with so many guys and it just enables them to feel comfortable talking about these things. It's like, my it's my passion, Like that's the thing that gets me the most excited. And yes, I think we make the best clothes in our category and the best clothes in our market. That enables us to have a megaphone. And so we've got to grow the size of our megaphone to have the level of impact that we want. But our growth goal is to be a billion dollar revenue business and impact one hundred million lives through our education.

It's fascinating to hear you say, like thinking of yourself. I mean, like you said, it's from the beginning, but as a wellness company kind of with clothes attached, if you will, how else do you I mean, is it a case that there are other offerings Nate, that you eventually offered to your customers.

Even more so, that's the goal. From the beginning, we had an online journal that we called The Pursuit, which focused a lot on this bringing world class experts to the table sharing that content. But what we found is that this idea of you guys are in the content business, you know how hard it is, and so we were competing against advertised driven content engines and this was like something that we were doing on the site. So now we've taken that back in house and figured out how to do this in a way that we think is sustainable and meeting the customer where they're at in the form of video content and social first content versus written content, and then also live events and doing leaning more into that that I think will be really powerful.

Can you give us an update on retail locations, because one thing that we talked about with you last time you were here was growth of retail in a time when we're seeing other companies pull back. Yeah, and I'm wondering how aggressive you're being this year when it comes to that retail footprint and what portion right now comes from e commerce versus those brick and mortars.

Retail has been our fastest growing channel the last two years on a percent basis, and I think it's a channel we certainly believe in. We are slowing that down this year because of the women's launch. As you can imagine, it changes the layout of the store, the size of the store, the mannequins, the hangars, the training of the staff, the selection of the staff, like there's just so many considerations, so we kind of want to absorb and.

Because every store has to have a retrofit.

Right exactly, so we're retrofitting all fifteen stores. We've kind of done that work, brought in the right people from a visual merchandising standpoint, but our store plan going forward is as aggressive as it was in twenty twenty three, and we think that these stores are really important, especially for our brand message, because you have to meet people where they are and meeting people in person and physically. We've all learned the importance of that over the last several years. So we're leaning into that and doing it the right way. We're going to be highly selective. There are certainly a lot of brands in our space that, because of their capital stack and what they need to achieve, they're juicing their revenue numbers by opening as many stores as possible. And in some cases over pain for real estate, which is going to be tough in three to five years when those those rates, you know, don't justify the sales figures. We're not taking that tactic. We're being really thoughtful, but we're going to you know, our store account will be more than two x by twenty twenty six.

Forgive me, and I should know this wholesale you guys don't want.

We do have some wholesale here. Yeah, We've got some great partners in the market. We have a high focus on specialty accounts, green grass accounts. You know, we're in some of the best golf and country.

Club productive for you guys.

Or is it absolutely Yeah. I think it's a great business model. You can get carried away when you're driven when your wholesale account is driven by majors. For us, it's been about twenty percent of the business the last two years, so it's it's small.

Equinox was an early partner.

A partner is still a partner, and uh, and you know, we love that type of account because generally if you walk into an Equinox and you buy shorts, it's because you forgot Nobody's like, hey, you know what I'm gonna go have that be my retail experience or I would say that's the minority, But you just do it. It's perfect and it's a great way for people to discover the brand and the product.

You want to use the gym owner shorts.

So kids, Yeah, I won't say never. My wife's been begging for that from the beginning. But I think she'll I think she'll give me a minute.

Because just to clarify, you have kids already, you're talking about a kid's line.

Yeah, kid's line. Okay, yeah, fair, fair, thanks Tom. Yeah, but but yeah, so you never know. But I I prize my wife on the day that we launched, and I had just flown in from Asia. I arrived at three am. I set up a room in our house with every single one of the products for her, and then I brought her in a surprise her. And so I think she'll give me. I think she'll give me a year off before bothering me a rout kids.

Again, well done, well done, Thank you, Nate. Always great to check in with you. Good luck with it.

Thank you, thank you guys, thanks for having me. Nate check it.

He's co founder and CEO of Rown, joining us here in studio. All right, everybody, you've been listening and watching Bloomberg Business Week, Carol Masser, Tim Stenevik, and this is Boolberg

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