New Brand Gospel

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1:07Hello and welcome to Fashion People. I'm Lauren Sherman, writer of Plex Fashion and Beauty, Memo Line Sheet. And today with me on the show are Jenna Lyons and Johnny Bauer of the Creative Agency Fundamental Co. We discuss how to make a great brand. 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. Line 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.

1:56If 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'm in Paris for a couple more days. Then I'm taking a real holiday. No, I work for a UK company for a long time. I'm allowed to say holiday. And then I'm back to LA for a while. I can't wait for LA. No humidity. Mom's night out. I'm going to see all my friends. I'm going to see Amanda. I'm going to see Yassi. I'm going to see Molly. I'm going to see so many of you. It's going to be super fun if I didn't say your name right there.

2:33Don't worry. You're still my friend. So Toddlertown, shout out. I don't think any of them listened to this. But anyway, I cannot wait for No Humidity Los Angeles. It was a busy week. Lots happening in line sheet. I had a scoop regarding Michelle Obama's stylist Meredith Koop, who is kind of stepping away from working with her on a day-to-day basis. We never thought we'd see the day, but I have some intel on that. Then there's the caring of it all, the LVMH of it all, lots of fun reporting there, updates on what people are wearing in Sun Valley. Shout out to Carly Kloss, who is a favorite of my colleague Dylan Byers, who's on the ground reporting there from the coffee shop or wherever the reporters go.

3:18But it was a fun week. Couture was really interesting obviously Jean-Paul Gaultier was the sort of big standout super show during Atlantic I would say that obviously Chanel won in many ways but JPG showed that if you don't worry about Chanel you can do a really great job so um I really enjoyed that and I'm just glad that this fashion season is over, but back to school in September and back to Paris and back to the shows. And there's just so much going on. Vote World in Milan. A new and improved London Fashion Week. It's going to be interesting. But anyway, if you have any requests for what you want me to write about the next few months, let me know.

4:08I have a huge list, but I'm always I'm always taking suggestions. And let's get going with Jenna and Johnny. It was obviously very fun to talk to Jenna. She really knows how to play the game with journalists. And I've written about her so much over the years. And it was very insightful. Lots of fun. A nice break from the big world of fashion. Derek Blazberg will be on on Tuesday to talk about Couture and his new book, Fast and Loosh, which I'm sure you'll enjoy. I know you guys all love when I have Derek. You have a real chemistry, I would say. But let's get going with Jenna and Johnny. Johnny Bauer and Jenna Lyons, welcome to Fashion People.

4:52Thank you. Good morning. What did you all have for breakfast this morning? Have you had breakfast? It's pretty early still. I had a bagel. I did. I made my son a bagel and joined him. We are on the egg bite train in our family. We make them on the weekends. and run through them during the week. Oh, nice. I'm a big egg bite fan too. I feel like if you're on Instagram and recipes pop up, there's one egg bite recipe an hour. We fight over them. Who's going to get the egg whites? Who's going to get the full egg yolk? It's a process. Okay. So how you two are here together, how did you two meet? I would venture to say that everyone who's listening to this knows who you are, Jenna.

5:44You're very famous in the fashion people world. Johnny, probably half the people know who you are and 75 % know about the work that you've done. So maybe, Jenna, I don't know if you need to give your elevator pitch, but Johnny, maybe you can start and say who you are and and how why you two are in the room together firstly i think 50 is very generous i'm very comfortable being a plus one um and uh but jenner and i have known each other for a long time um and um i grew up in the agency world um the brand strategy and agency world i was one of the partners of Droga 5 and then ended up at Blackstone helping them think through strategy and transformation for its portfolio of companies.

6:39And that is where Jenner and I started collaborating on some, they have a lot of different kinds of companies and Jenner and I worked together on some real estate companies, some beauty companies and some apparel companies. And from there, they were very, very productive engagements. And the opportunity came up to, we outgrew the practice at Blackstone. The demand for us from the CEOs and from the investors was greater than what we're able to build within Blackstone. So at the beginning of 2024, we carved ourselves out into an independent value creation consultancy, a brand-led value creation consultancy called Fundamental Co that helps companies with their fundamentals.

7:27And Jenna, thankfully, decided to make this her thing too. So we've been going in our current guise for around nearly coming up to two and a half years. So I want to talk about what value creation means to you in brand perspective. But Jenna, maybe you can talk a bit about, obviously, you worked at J.Crew for a long time. I've been writing about you for 15 years in your various forms, but you could do a lot of different things. You're a very in-demand designer, creative director, and you've decided in your post-J.Crew career to kind of dip into a lot of different projects. But this one in particular, A, why why didn't you start your own brand yourself and go that route, but it decided to help other brands and B, why this project with Johnny in particular and Blackstone?

8:29Well, great question. I think there's a lot of reasons. There's a couple of different questions in there. So I'll start with the why I didn't do my own. The reason I didn't do my own is what I found is as you get to this senior leadership place in a company like J.Crew, what happens is you're not doing the work anymore. You're not actually getting to do the creative thinking the way that I grew up doing and what I really enjoyed. And I found that predominantly, I was sitting in finance meetings, strategy meetings, and mostly HR meetings. And it was really disconnected from doing the creative thinking.

9:03And the work that really got me excited was the process and touching things and being in meetings with people where we're discussing ideas. I was really a yes or no person at that point. I wasn't, you know, oftentimes even getting to the meetings where things were being discussed at the early nascent stage because everyone wanted to, like, present to me. And I thought, okay, that's not, that's fine. Like, it worked for me for a while. But at that point in my career, I wanted to be in the room again. I wanted to be having the conversations. I wanted to be able to have creative conversations, creative ideas, and solve problems and be a part of a team and not just be the person sitting in the corner office.

9:38So that's why I didn't want to do my own thing. And then separately, why Johnny and why this? I think what I didn't realize over time is that while I had grown up in fashion, so much of my career had really stemmed and really connects to so many different things that I see that are happening today. And what I mean by that is if you look at the problems that companies face or the challenges or the excitement moments of opportunity, they have a lot of similarities in them. Meaning, oftentimes what you see with the problems is that they're actually looking at themselves. They don't have a chance to get outside of themselves.

10:15And I think sometimes what happens is when you come in from the outside, you're able to see things that people who are sitting on the inside aren't necessarily able to. And that's a really fun moment to be able to discuss and to be able to add value to a team who maybe doesn't have the actual bandwidth or the wherewithal to think about what's going on inside. And also to galvanize a group of people where you get a lot of different teams in a room and actually allow them to think differently, it can really change the conversation. And so that to me has been incredibly fun. I think the work that I started doing with Johnny very early on when he was at Blackstone, I was surprised at how connected it was to my experience.

10:49So many of the moments in my previous life have really led me to this, and I never would have thought that, but it also led me to doing the work and not just being the one to make a decision, but actually to like, what does it look like to put it together? What does it look like to really think about what's happening here and to try to solve problems? And I don't know, it's been great for my brain. Not all the things I've done have been great for my brain. Sometimes that's good. You know, sometimes there are things that are bad for your brain that fill you up in a different way. So yes, I mean, listen, I did.

11:25I obviously tried the Real House wise and that not to get into that but I think it I've been in this place where I've done everything that I was supposed to do for so long I followed the path I did everything in corporate America that people expected me to do and myself and so I've been in this place where I've got gotten to try so many different things and it's allowed me to see what really like moves me and what makes me feel good and what makes me feel you know challenged and also like engaged in a way so it's been it's been so incredibly fun it's been fun to write and report about your life jenna i can't wait for you to write your book someday i'm available if you need if you need someone okay thank you we can talk um johnny really quickly before we get into the work y 'all are doing

12:17now. I would love to hear a little bit about Droga 5 and what attracted you to Blackstone in particular, because I talked to a lot of investment firms. The thing about private equity specifically is a lot of times it depends. Every private equity firm is different. Blackstone is one of the biggest investment firms in the world. There's a lot going on there, So you can't kind of put it in one box. But generally, a lot of these companies are not operational. They don't care about brand. They don't even care about the brand when they're looking at investments. Many of them don't have taste. Like some investment firms are very driven by taste and that's their pattern is that they like a certain thing.

13:01Other investment firms are only driven by whether they think there's going to be a big exit and how many big exits. or some investment firms are just looking for medium exits on a lot of different things. But coming from the agency world and you built this very in-demand agency, you go to work for a private equity firm, what was your thinking and how did they convince you that they were serious about helping their portfolio? Because a lot of these firms are, I'm not saying it in a negative way, it's just not what they're about. yeah no i think that um i do think firstly that i you know these firms are very they're all they're all interested in a good exit i think that that is a threat amongst all of them and i had a thesis that if brand had a better seat at the value creation table that it could help contribute to even better exits and so that was the the you know the thinking often you're right in in a private equity back to context, the brand people could be the people that come in at the end, right?

14:08They'll buy a company, they'll do a ton of interventions, and then they'll sit down and bring in the brand people and think, you know, who are we? And why do we exist? And I had a thesis to bring that thinking much further upstream or earlier in the value creation process. And before any interventions happen we sit down and create a clear set of ideas that will define what the company's next chapter is and articulate to everyone within the company not just the marketing folks but the talent folks and the product folks and the technology folks this is what we're becoming next because that will be a more valuable thing than we are now and then we we came up with a framework and set of structures that enable everyone within the company to be able to access and use exactly the same words to describe those ideas and then connect them to all those interventions.

15:07And the way that I got into private equity was we were doing these kind of big transformative brand ideas at Drogo, the best advertising agency in the world, agency of the decade 2010 to 2020, I enjoyed and loved every one of my 14 years there, every day of my 14 years there. But we were coming up with a lot of transformational ideas, but very often we just ended up transforming the advertising. And so that was my frustration. And I thought that brand could be connected to more than marketing and should be useful to everyone within the company. And so So I approach Blackstone with this thesis because I thought that private equity was a really unique context or moment to insert brand thinking because a company's just been bought.

15:56There's a new management team. It's a reset where we're really thinking through what a company, you know, they bought a company, but they want to sell a company for more than they bought a company. So obviously they need to change it. And the efficiency-based playbook to value creation, taking stuff out, is just played out. And we're headed to a world of more of a vision-based playbook where we can think through what could a company become next as a way of making it more valuable. So I knocked on Blackstone's door with a little presentation and said, this is my theory. I think that we can give brand a different seat at the table by bringing it into the process earlier.

16:33And after, you know, I think I don't exaggerate 40 or so interviews, it wasn't them convincing me, it was me convincing them. They gave me a job and I built a team and we started this practice. And now we work with 10 different sponsors. We work with everyone from Bain Capital to Apollo and Towerbrook, an amazing company, Thrive Capital, as well as some public companies. And the thesis is really catching on that if brand does have the right seat at the table, is brought in early enough and is a CEO endeavor rather than just a CMO endeavor, then the right types of brand strategy can become instruction for everyone within the company rather than just the folks in messaging and marketing if that makes sense i'm sorry there's a very long answer but that is the the arc of how we got to where we got to yeah no i'm i it makes a lot of sense and i'm the upstream bringing brand in earlier i have 15 questions around that but i'm going to try to only make them one parter.

17:37So to start, private equity is, again, it really varies, but some of these businesses, when they're bought, they're worth a billion dollars. Some of them are worth 250 million. These are not small businesses. And they're usually 10, 15, 20 years old sometimes when they're bought by private equity, sometimes five or four. The turnaround of when they would like an exit for private equity is like three to five. And sometimes if you're lucky, 10. But what are the challenges and the opportunities of a brand that size to do a true brand overhaul? Because you already have an audience that knows the brand.

18:18So it's not like it's completely new development. At the same time, usually when it's bought by private equity, there's a lot more room to grow. So what are the sort of advantages of being that size and the challenges of being that far in your journey? Well, I think what you bring up is the kind of ideas that make most sense for this context, which is the chapter two moments, right? So they're like, how do you take what's great about this company and figure out collectively where it has permission to go next credibly. Right. And so often, you know, there's that saying of what got you from here to here won't get you from there to there.

19:02And that's often why private equity is brought in because they can bring a different set of capabilities and scale and capital to help take a company to another level. And that is, you know, that that's what Blackstone's, you know, always done. there is always an investment thesis. There is a clear reason why they believe it's a great company to buy, right? We just help then translate that thesis into a set of ideas that really can bring everyone along and help transform the company or evolve it to its next place. I will say though that AI has dramatically raised the stakes for anyone who doesn't have a real irreducible idea at the center of their brand.

19:43And AI is the great equalizer of execution. right it will close the gap on content imagery personalization campaign production all of it and for every brand that doesn't have a genuine point of view which means the only thing that truly differentiates are the things that can't be automated our average are a specific idea and a real belief system and it's really crucial to make sure that that is front and center in the context of value creation because you have to a brand needs to be able to answer how is it the only? How is it not just the biggest or the first or the best, but the only? And that's the ammunition that we like to arm brands with at the onset of a value creation plan.

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21:42So Jenna, where do you come in on this? Like, what value are you bringing to the plan? And how is Johnny and the rest of the team using your expertise to help develop these companies? Well, I think I want to go back to something that you said earlier, Lauren, because I think it is a lot of what I think people think and understand or expect and what I also maybe did when I first joined and started talking with Johnny. I think as you were talking about, you know, private equity and their perspective on aesthetics and that, you know, the look and feel isn't necessarily at the core. And I think what I came to understand in a much deeper way is that brand is not just about what it looks like.

22:19It's not just about the logo. It's not just about the beauty. What it really is, and as Johnny was mentioning, is like, what is the core representation of this company and what makes them special and what makes them different. And I think when you look at brand from that perspective, you know, and I saw this happen in my previous career too, where you, what you see is when there's a bifurcated or sort of splintered idea of what the brand should be, it makes it very difficult for the communication of that brand to be unified and to look like something and to have a clear point of view. And so whether you are a company who is looking for an exit or you need, as you said, a brand overhaul, even when you're a large brand, a brand overhaul doesn't necessarily mean we're changing you.

22:56What it means is we're bringing you into focus. We're saying, how did you get here? So what's your core competency? What are you really good at? What are the things that you do that no one else can do or that you are maybe positioned to do that you could actually do better than the others in the marketplace so we can make you differentiated? And what are the things that are actually special about the core team? What are your beliefs and what do you want to be about? So how do we think about those things and then reorganize everyone and everything? I of the brands we worked with was Laura Mercier.

23:26And, you know, over time, a legacy brand, what happens is everyone inside the company grows up expecting and thinking that the company is going to do X. And if you are now saying, listen, we want to reorganize ourselves, we need to get everyone on the same page. And what we found was that the people who are developing the product had a very different concept of what they were supposed to be doing and what the brand was about than the people who were actually making the advertising, the people who were actually hiring the team were all had a slightly different version. It was none of them were wrong, but they were all slightly different.

23:56And when you look at how that, it doesn't galvanize a company, doesn't get them connected to a core idea of how they're all thinking about the same thing. So after going through this process, all of a sudden, the team that's developing the product that is so far out front, they're a year out front, actually knows what the entire company is about, and is more in line with where they're going. And so I think so much of what I think I've been excited to be a part of is that I don't have, I don't know skin in the game in that sense. I'm not invested in whether we do purple or pink. I know it doesn't matter whether we go down this road or that.

24:28I actually get to sit back and see. And so much of my previous role at J.Crew was really guiding. We had three different brands. So much of that was saying, okay, how is J.Crew different than Madewell? And what are the best parts of Madewell? And how do we protect them and keep J.Crew out of them? How do we do the same thing with J.Crew in factory? How do we keep them doing their own thing and keeping them separate? So much of it is being able to recognize at a bird's eye level what's really great about this and what needs to be protected what can we let go of and what do we need to actually reinforce and and put more you know attention behind and i think that's a lot of what we've been doing here and an example of that is is is a24 arguably the world's coolest company um doing so many incredible things in film and television going from you know a distribution to a creator but now that they've opened a restaurant they bought a theater the question that we're answering for them is what is the fence that they would build around like categorically where they would and wouldn't play um so would they go would they would they make a theme park would they go into music we're not answering any of those questions but then so we've helped them kind of carve that fence around the company but then also for the areas within the fence what is the contribution that they would need to make to that category for it to be allowed to be called A24 and put their brand on it, right?

25:45How will they know if they're A24ing a category versus anyone else? And so using the brand as a filter for decision-making to help bring everyone along around, we would only do this if we worked in this way. Likewise, we're working with Hilton Hotels. This is Project Genis leading where They're developing an entirely new brand in a lot of cities where they're looking for a concept at the core to define why this new property exists, what it offers its guests in a way that others don't. And the idea is permeating through from the physical architecture itself down to what brand of seltzer will be in the fridge.

26:32And they're all closely connected to one set of idea that now everyone within that project team there is using as a filter to inform what they're doing. It's not just showing up in the messaging or in the commercials. One thing that I've done a lot of in my coverage at Puck is really think about like, we really try to only, the rubric for companies that we cover, people that we cover, are they interesting? like are they brands that people care about or it's sometimes it's a small company that has never made more than 90 million dollars a year in sales sometimes 5 million sometimes it's a 50 billion dollar company and then there are giant companies no one cares about and we don't write about them but on the other hand do you think people are so emotional about brands like do you think that that is as important as it was even 20 years ago.

27:32One company we cover quite a bit is Nike. And people who grew up with Nike are very emotional about Nike. I think consumer today likes Nike. A lot of them like Nike. I mean, Nike has had quote unquote challenges. It's hard to put that in the context of a business that is still growing in some areas. But I don't know if the consumer today is emotional about Nike and I don't know if there's anything Mikey can do to get them to be more emotional. Do you all think that people are still as like caught up in brand today as they were 20 years ago? Why or why not? I, yes, I mean, I do. I think that, yeah, when a brand makes a meaningful connection or has a credible role that's clearly defined and consistently executed it really does play well i think that particularly in and i know that you mostly report on you know like like fashion and for a long time you could get away with you know a new logo and your creative director a buzzier name and you know and the market would give you credit for it but now it doesn't i do think consumers are sharper they're more skeptical and they've seen you know so many of these maneuvers to be fooled by surface change and so the crisis that is happening is is is more of an identity crisis in the deeper sense of the word that when brands really don't know what they stand for anymore that they they run into trouble but then i think you take something like road right which is you know i know you know hayley bieber didn't launch with like a celebrity licensing play she built a brand around an actual point of view on skin that she'd been living with and communicating years before she even launched the product so the brand felt like the logical conclusion of who she already was and that's why it worked and that's why it mattered and that's why it was this 212 million dollar in sales before she'd done any retail presence at you know at all so when it's coherent when it's clear when it's credible and when it's connected we think that these brands matter and there's also like different kinds of relationships that people will have within you know different brands you're going to have a different relationship with your you know with your um your your your hospital brand than your you know than your nail polish brand or your car brand you're like there there are certain categories that are just higher involvement categories that cost more money that are higher stakes and the relationships are deeper.

30:12But I think to answer your question, overall, no brands matter, but people just can't be squinting around why they matter. They need to be clear and connected and consistent. Jenna, do you have a point of view on that as someone who worked at the same brand for three decades and now you're observing the way all these other brands operate? I think what I saw then, and I think it still stands true, is that people know the difference. People are smart and people actually care and they care when there is a real ethos behind something. They care when they believe in the person. If there is a person behind it, they want to know more.

30:49They want to actually connect with that. I think, you know, when you're talking about Nike versus a road, as an example, like there's no specific person behind Nike. While there may be an athlete that you connect with, that's where you're getting your emotion. You're getting your emotion to believing in that athlete and wanting their career to survive or them to do well and be successful. And so you're attaching that emotion to that person, where it's a little less distinctive because Nike doesn't have that part. But with Haley, people are connected to her. You know, there's a brand called Husbands Paris, which is a, you know, tailoring, a men's tailoring brand, which we are smiling, so you must be familiar.