Better Call Andrew

0:04Hello and welcome to Fashion People. I'm Lauren Sherman, writer of Puck's Fashion and Beauty Memo Line Sheet. And today with me on the show is Andrew Rosen, the founder and former CEO of Theory and an investor in everything from rag and bone to TWP. We're talking American fashion, department stores, what makes a good founder, and so much more. Before we get going, I wanted to remind you that if you like this podcast, you'll definitely love puck where I send an email called line sheet. If you're a fashion person, you get that reference. It's an original look at what's really going on inside the fashion and beauty industries.

0:46Line sheet is scoopy analytical and above all fun. Along with me, a subscription to puck gains you access to an unmatched roster of experts reporting on powerful people and companies in entertainment, media, sports, politics, finance, the art world, and much more. If you're interested, listeners of Fashion People get a discount. Just go to puck.news slash fashion people to join Puck or start a free trial. Happy Friday, everyone. Hope you're having a great week. I am back in Los Angeles for a while. Happy to be home. New York was fabulous on Tuesday night. At the end of my trip, Puck hosted a get together at the Lowell Hotel for our luxury adjacent advertising partners.

1:32The Lowell is New York City's top five best kept secrets. It's really nice there. Hopefully it stays that way. I'm sure it will. The night's programming was a conversation between John Kelly, my boss, and Puck's founder and editor-in-chief, and me. We chatted about what's happening in luxury from tariffs to pricing to long-term strategy and also a bit about what makes Puck So great. It was a really nice night. And if you're interested in partnering with us, feel free to hit up Richie Grin, Richie, R-I-C-H-I-E, at puck.news for more info. And also, if you want to check out the conversation, there are many clips of it on Puck's Instagram.

2:16So go with God and joy. This week in Line Sheet, there's a lot going on. You can find all my Met Gala superlatives. People enjoyed that. Some beauty scoops from Rachel Surgat involving makeup by Mario and Drunk Elephant, two of the biggest beauty brands in the world. Plus, I have a really scoopy fun story on Satisfye Running and its recent fundraise. So this is a Paris-based, fashion-y, running activewear brand that I have been really interested in since it launched. And they raised money from 1686 Partners, the Luxembourg-based private equity firm run by David Wertheimer, son of Gerard Wertheimer.

2:58You may know the name because the Wertheimers own Chanel. So there's lots of fun, interesting info in there. Satisfy in and of itself is a good story, but about like what's happening in the sports world and night with Nike and all of that. But I'm even more interested in David, who seems to want to live a more public life than his extremely private father and uncle. So let's do an interview, David. Call me. Sarah Shapiro is also back from the outdoor mall capital of the world, Los Angeles, where she attended a Beyonce show and did a lot of shopping. So check out her insights in Friday's email.

3:39Let's get going with Andrew.

3:43Andrew Rosen, welcome to Fashion People. Good to be here. Thank you for taking the time. So on Friday mornings, the first question we ask is, what did you have for breakfast? I have my normal breakfast, scrambled egg whites and a toasted scooped out bagel. Sounds pretty good. No cream cheese. Well, I had a little cream cheese. You got to have a little cream cheese, right? I'll always have to spread the cream cheese. Did you start scooping out your bagel in the 90s when Sex and the City was on? I don't know. I started scooping out the bagel when I decided that it was a bit healthier for me. What's your feeling about, like, Ozempic and all that stuff?

4:32You know, I think that, I think it's good. I think it's good. I think that, you know, it's, and Ozempic, I understand, has lots of other benefits other than just losing weight, so. Yeah, I get fed a lot because I write about, I don't know if you've noticed, but I like to check in on what's happening with the GLP ones. And I get fed a lot of information about them on Instagram. And I just read this week that there's new evidence that it can repair liver damage. Yeah, so it's all good. Yeah, it's all good. It does mean that you don't want to drink. Every person this week in New York, every event I've been to, no one's drinking.

5:17Really? Yeah, it stops your interest in alcohol, apparently. Oh, not only eating, but drinking. Yeah, you have no interest in anything fun, apparently. me. So Andrew, I've known you for probably what? I mean, I've known of you and written about your companies for longer than I've known you, but I've known you for about 10 years. Maybe longer. Maybe longer at this point and have covered all of your businesses pretty much, the ones that I know about. I know there are many I probably don't. But can you maybe let's start and can talk a bit about who you are and why you're on this podcast. Like what is your role in the fashion industry?

5:59I mean, you have to, I guess you have to understand. Um, I started back in, um, 1977 working for my dad. My dad was a famous clothing manufacturer, um, back in a whole nother era. Um, but instead of going to college, I ended up going to work for my dad and, um, really started working in the factories, warehouses and learning the business sort of from the inside out. And, you know, I've had, my father was the first licensee for Calvin Klein and Calvin Klein Jeans. And so that's where I started. And I really started out at the beginning of a whole new generation or a whole new generation in our industry of designer identified product.

6:53But really, if you look back before, you know, I guess the start of American design with Calvin Klein, Halston, Perry Ellis, Ann Klein. Before that, there were just big companies that had branded product. and designer identified product really started in the, in the mid seventies. So I started at a whole new generation of the business. And I, I think I just grew up with that. And I grew up with working with designers and, um, and, and making, um, really fashionable product, exciting product. And, you know, from Calvin Klein went to Ann Klein, and then I started Theory. And at Theory, I think that maybe that was the start of the contemporary marketplace.

7:57And, you know, I sort of was one of the first people to identify that there was a void in the market. And we needed clothes that were a little more contemporary than what was going on in the bridge market, that were a little cooler, were a little faster, were a little more fashionable. and um so i i really have sort of been at the forefront of many things that have happened in our industry over the last almost 50 years you started theory and we're talking it was mid 90s right 1997 1997 so it's in the middle of sort of helmet laying uh jill sander prada all these brands like true fashion brands and consumers in the U.S.

8:52also buying them, which it wasn't. That's when like buying fashion really, I feel like, became a thing that people with money did in America. What did you learn from the experience working with your dad, with Calvin Klein and then Anne Klein that made you want to start theory, which was kind of giving that same look of those Italian or European brands at a more reasonable price and to a bigger audience and, and sort of explaining to them why quality mattered, all of that stuff you did. I think of you a lot as like a explanatory person in the industry that you educate a lot of consumers on how to dress and why clothes matter, that sort of thing.

9:42Yeah. I mean, I think, I think you have to understand, And to me, American fashion and European fashion are different, right? And I think they're different for a very simple reason. The artisans and the designers in Europe work very, very closely together. When I talk about artisans, I talk about the fabric mills, I talk about the factories. And I think that there's a very different sensibility about design in Europe. and America is more about pop culture and America is more about, um, if you, if you just look at what American companies are much more democratic, um, they're not so hung up on, um, on, on, on every detail of fashion.

10:34Um, they're, they're, they're not so hung up on the emotion of fashion. And I think that it's more about the business of fashion. And I think theory in a lot of ways was more about the business of fashion. It was really making clothes that worked for the modern woman. And it didn't matter whether she was in America or she was in Europe or she was in Asia. Theory just worked. And it had a designer sensibility. It had fabrics from the best mills in Europe, and it had incredible quality, but it was simple in its design and thereby worked for lots of women. And the fit and the quality and the integrity of the clothing was what was most important to me.

11:26And I think that's something that I learned, you know, from my early days working with my dad and working with Calvin. It's also such a great name. It wasn't when I started. It was funny. When I started, it wasn't a great name, but I think the business made it into a great name for sure. Well, you shaped the business, and so people followed in your stead. Interestingly, you sold it pretty... When did you sell to Fast Retailing in 2004? No, I sold to Fast Retailing in 2003. Um, but I did that for, for, for lots of reasons. Um, a, I had a partner and, um, I thought it was time that, you know, my partner and I, uh, went our separate ways.

12:22I also felt like we started the company with very little, with, with, with, with, with nothing. And we ended up with a$150 million business that was worth a lot of money. And I was still young. And I felt like maybe I could do a lot more with the money than I could do with the business. And my intention was really to sell the business and go do something else. but it turned out that I ended up staying as the CEO for fast retailing for another 15 or 16 years. And, um, you know, I think that was a great testament to fast retailing and Misty and I, and, um, the, the inspiration and leadership that he provided.

13:16And also the fact that he knew how to work with me. I think he knew the things that I needed to keep me happy, and thereby he got the benefit of me as the founder of the company staying on 16 years after I sold it to help make sure that it got firmly established as a brand, hopefully for many years to come. When you sold in 2003 to Fast Retailing, Tadashi Yanai, the chairman and I assume founder of that company that owns Uniqlo and Theory and all this other stuff, was it surprising that you sold to a Japanese company? It wasn't because my closest friend at the time, Ricky Sasaki, who was a wonderful, wonderful man and a really, really terrific guy, has since passed away.

14:18He started Theory in Japan. And Theory in Japan basically grew up with Theory in America. and I wanted to do that one because I wanted to help my friend but two because I wanted to have an international company I didn't want to have just an American company and Ricky and I were very close he knew everything I was doing in America he thought a lot like me and understood me and so we built this company in Japan at the same time we were building theory in America and it was Ricky that introduced me to Misty and I and you have to understand Misty and I is just one of the foremost intuitive and special people there is in the world and he saw the value in owning a company like Theory and I don't think he expected me.

15:28I don't think he expected me to be there any more than a year. I don't think he expected that he would need me any more than a year, but it turned out that we had a wonderful relationship for a long time and I think he inspired me in many ways and taught me a lot about global business, about just how to be a global executive. And I think one of the great things in my career is starting with my father, but even after my father, I've had the opportunity to work with, be associated with some incredible men and women that have really inspired me and taught me how to be a lot more than maybe I could have been on my own.

16:16And Misty and I were certainly one of those people. I also wonder if I assume that theory being based in the U.S. and having a robust Japanese business, but being based in the U.S., Uniqlo has over the years is now very successful in the U.S. And it was a lot of stops and starts. But I'm sure that having this business that was so big in the U.S. made them understand the market more, even though Theory sits at a different price point. Oh, I think that Missy and I totally appreciated the fact that Theory was a foundational business in the U.S. and gave him a home to be able to build from. And being associated with the American company and have American executives like myself and some of the other members of the team, I think that was part of his motivation.

17:20and it was very smart, I think, in the fact that he did it that way.

18:01So in 2019, after 15 years of working, being the CEO of Theory, but working for Mr. Yunai, you finally quote unquote retired, which is, I don't know if it's an oxymoron, but it's definitely funny given how much you work. But what, obviously, six months later, COVID happened. But like, what have you been doing since you left fast retailing? Because I assume you could have just been golfing and doing your horse stuff, but you obviously are doing more than that. I play a fair amount of golf and I fish, which I like to do a lot. And I have thoroughbred racehorses, but I grew up in the fashion business.

18:51I really love fashion and I feel like I'm still relevant in the industry. And so I have stayed with it and, um, I do a lot of things. Um, you know, I had invested in lots of companies, um, during the time I was at theory and have continued to invest in companies. And, you know, there's probably too many of them to mention here. But, you know, I'm definitely inspired by working with entrepreneurs. I'm definitely inspired by working with people that can teach me things, people that I can get inspired by and hopefully sometimes inspire. And I like building businesses. And, you know, I was lucky enough to get involved with the Rag & Bone guys early on.

19:49I got involved with Stacey and Alice and Olivia very early on. I got involved with the Veronica Beards early on. All of those businesses were very small when I got involved. And now they're cornerstones of business, not only in America, but throughout the world. And the other person that was really important to me and has been important to me over the last number of years was Jens Greed at Initially Frame and Good American and Skims and many other things. And Jens and I met 10 or 12 years ago and really were friends from the first time we met and have done a lot of stuff together and continue to do a lot of things together.

20:43So, you know, I tend to be able to find people that inspire me. And, you know, I think this one thing that's true with all of them, they're incredibly talented and they have a lot of integrity. And I like working with people like that. What made you want to start investing in fashion? You know how hard it is. And you're particularly good at making money in fashion, which I don't know many people who are, but you know how challenging of a business it is. What made you, like with Stacey or the Rag and Bone guys early on or the Veronicas, what made you decide, okay, I'm going to put a good amount of my money into these businesses and help guide them?

21:40I mean, you have to understand something. I spent my whole life in this business. My father before me spent his whole life in the business, and his father spent his whole life in the business. So I like to say, like, you know, there's 125 years of experience here. But I just think it's just something. I don't even, the crazy thing is, I don't look at a financial report or a balance sheet or anything when I'm investing in these businesses. I just look at the product and talk to the people. And, you know, from there I can see what the opportunity is. I don't really like to do startups. I mean, there's really only two companies that I've started from scratch.

22:31One is Thiery, and the next one is something we're going to talk about, I'm sure, a little bit later, is TWP. But other than that, I really have liked investing in people and helping people grow their business. But I like to see companies that have been able to establish themselves in making a product, designing a product, making a product, and selling a product. And I like to, you know, make sure that the people I'm investing with can go from A to B to C, right? And if they can go from A to B to C, I can really help them. Um, in any of these companies, I don't do much work, but I do do a lot, have a lot of conversation with them and talk to them about, um, ideas or just help them achieve the vision that they have.

23:28And, um, you know, I like collaborating with people, um, and, and working together. It doesn't always have to be my idea. If you look at the companies I'm invested in, aesthetically, they're all very different. And aesthetically, some of them are not even my aesthetic, but I totally understand and can plug into someone else's vision and someone else's aesthetic and help them achieve their goals. When you're looking at these companies, is it the the founder's grit is it product market fit or whatever like knowing that there's a customer seeing a customer for whatever it is it's to me it feels like the people you tend to invest in are people who are willing to go the extra mile and work really hard and don't think that they are just going to get something handed to them but how much of that is what drives you when you give someone a check versus I think that this is a product that people in the market need right now?

24:39I mean, I think most of the time I like to work with people that I feel have something a little extra, right? For example, I mean, I just have invested in Danielle Frankel, the bridal business. And, you know, I think she's incredibly talented and creative. She has a husband who's her partner in the business, who's really, really strong and supports her. And I think they had spent a number of years building their business and all they needed, in my opinion, was some capital and some advice and support. And I think they can double and triple and quadruple their business in a very short period of time.

25:34But they really had the design integrity and the personal integrity that is important to me. Yeah, I thought that was a really interesting one. And I'm going to have her on because I want to learn more about her model and how they're developing because it is unique in the bridal space to see something that doesn't feel like it's the way it's been done before. Right, and I think that space is open for somebody with new ideas and a fresh perspective, and I think there's a huge opportunity there. Yeah, I agree. I feel like it's not a replenishment business. But it's definitely, there's always a customer.

26:23There's always someone getting married. And there needs to be new ways to service that person. How much do you think about price point? Because Danielle Frankel is, her dresses are, a lot of them are really, really expensive. Yeah. So that's different from, a lot of your price point has been in that, what was long called the contemporary space, which you actually you essentially created with maybe there was two other people. I don't know who coined the term, but you created it. Theory was, you know, ground floor of that. And right now, in particular, pricing has become such a hot topic because luxury goods have gotten so expensive.

27:05And at the same time, fast fashion made everything cheaper. Now with the tariffs, who knows what's going to happen, but how important to you is the price and how do you determine that they've kind of landed on the right pricing? I mean, this is going to sound terrible, but I don't really think about price at all. That's interesting. Tell me. Price is not really a relevant conversation to me, for me. I think that, listen, first of all, I don't want to make clothes that are too cheap and I don't want to make clothes that are too expensive. And the, and the reason is I don't feel that I could be competitive in either marketplace.

27:48Um, I think we're, I think American companies and Americans are a big disadvantage. As I said earlier in the designer space, um, I think that, I think it's just, we are at a big disadvantage. I think in the more mass space, there's always someone cheaper. And I don't think in a cheap way. I'm not a no-frills operator. I believe in quality. I believe in integrity. I believe in making emotional clothes. But when it comes to price, I think that, you know, the the yes you have to offer value but you know there's there the the price is related to what things cost you and if the things if the product costs x we have to get x plus plus and that's the way i i'm i don't i don't really i don't really feel price is is is a deterring factor within the shade band of the marketplace that I work in.

29:01Um, so within the marketplace that I work in, I don't really think about price. Um, you know, at, at, at, at, at Ragged Pwn or Alice Olivia or Frame or, or, or, or TWP, I mean, the price is the price. And if it's$20 more or$20 less, I don't think it matters to the customer. I think what matters is how does it fit? How does it feel? How does it look? And as long as we're delivering that, I feel that we're going to succeed. And, you know, we work at a certain margin. It's not like we work at extraordinary margins, but we don't work. And so price is what it has to be. It's not really a factor for me.

29:55I feel like a lot of people would say that TWP, for instance, which was started a few years ago by Trish West Coast Pound, and you're her partner in it. She worked with you at Theory, and you've made this into a very significant business pretty quickly. I think one of the reasons it's been so successful is the quality is really, really good for the price. Totally. I think a lot of people would say, I can't make stuff at the price Andrew makes it at because I don't have the relationships. Like, how much of the margin that you do get is because you've been doing this for so long and you know exactly how to do it?

30:35So you have to understand, I started, when I went to work for my father, my father made me spend the first two and a half years in the factories in New Bedford, Massachusetts, in Long Island and El Paso, Texas, understanding how to make clothes and working with on the sewing floor, working with pattern makers, working with the cutters. So I understand the business in sort of a unique way. And, you know, it's just, it's sort of second nature to me as to how to design clothes, manufacture clothes, and sell clothes. And I think that that's, now you add the component of marketing, which didn't exist back in the day there, because the magazines and department stores did all the marketing for you.

31:33Now today, it's different. But I mean, it's fairly simple. It's just a question of understanding it. do you think most people don't understand it or do they not try to or because i i do think a lot of people have have issues because they overdevelop or they don't find the right factory for the right item and they just make a lot of mistakes that end up being costly and it feels like you i make a lot of mistakes too by the way i don't think i don't make i'm sure but But the overall, the net is positive. It works good. But I don't know. I just think that all of our companies are really focused on what our mission is and where we sit in the marketplace.

32:24And, you know, we tend to think forward and not think backwards.

32:34and, you know, I think that, you know, we're all entrepreneurs. Like, I like entrepreneurs and my partners are all entrepreneurs and we're interested in what's coming tomorrow, not what came yesterday. And I think that's a big part of the success of our companies. And I think that, you know, maybe I was lucky because that's who I found all the time. But, you know, yeah, it's like that. Well, I think you have one of the skills that you really have is eye for knowing talent on the design side and the business side. And I know a lot of people who have wanted money from you and you haven't given it to them because and I know why, because I know the way you think and I know the way they think.