Lauren Chan Scaled & Sold Her Fashion Business in 5 Years

0:28Hey, welcome to the Female Founder World Podcast. I'm going to be leading a fireside chat with Barba and we have amazing gift bags from Friends of Female Founder World and Friends of Ceremonia. There are going to be some beautiful products in there, plus networking, drinks, all the fun stuff. I put a link in the show notes if you want to RSVP. You will need to show your registration at the door. It is a free event for our community, so make sure you get your name on that list. One more quick announcement. I wanted to let you know, if you are a paid business bestie subscriber, we just dropped a brand new resource in your dashboard.

1:03It is a list of all of our favorite independent boutiques around the US. So where they are, what they stock, what categories and who to contact if you want to share your brand and get stocked in the store. getting into a lot of independent boutiques really is the way that a lot of the brands that I speak to get to their first million dollar revenue year. And it can be kind of tricky to do that. So I put together this sheet and this list with the team so that you know exactly who to reach out to. And this is all kind of a list of brands that really fit our vibe, our aesthetic. So I think that is the kind of stores where you are going to want to be stocked as well.

1:42Okay. Onto today's episode, I'm speaking with Lauren Chan. She's the founder of a plus size fashion brand called Henning. She worked as a fashion editor for years before she built this brand and basically took all of her insights from years of kind of market research, writing about different brands in the space, and then went on to build her own. They were just acquired by universal standard, which just gives Lauren this really cool, like zoomed out perspective about starting from scratch and bootstrapping a business all the way through to it being acquired. I think you're going to love this. We've actually got two parts to this episode.

2:15On Wednesday, I'm going to drop a day in the life with Lauren where she walks us through basically what a day looks like for her as she's building Henning versus what it looks like on the other side of the acquisition. Okay, let's get into the show. You are now entering Female Founder World with your host, Jasmine Garnsworthy. Lauren, welcome to Female Founder World. It's so good to have you on the show. Thank you so much for having me. It's so great to chat. I love everything that you do and your ability to bring people together online and in real life. So hopefully real life next. Yes, I hope so.

2:51I want to give people a bit of an overview who don't know Henny. What have you built? So Henning was my luxury ethical plus size clothing brand that was actually acquired this year by Universal Standard. But I started it about five years ago after a stint as a fashion editor focused on size inclusion and a plus size model and basically a human who wore above a size 14 who couldn't get dressed for my work environment. So that is really the top line of what Henning was. Of course, it was a deep, deep passion project, but it was also, in my mind, the perfect solution to a huge void in the fashion market.

3:37I find it interesting speaking with folks who work in editorial and publishing and then start a business based on what they've learned? Because I do think that you see everything that's new and everything that's next. And you also learn really quickly, particularly if you're in a digital environment, you're learning really quickly what people are clicking on, what's resonating, what people are engaging with. And it gives you such a good sense of where the gap is. Do you agree? Is that something that you think really fueled? A hundred percent. Yes. So, I mean, we've seen this story time and time again, And Jade Swim is a huge success story that came from publishing my former boss as Palorama Beauty, Starface as well, Julie Schott.

4:17With regard to my experience, I found it deeply helpful to basically be being paid to do market research for my future project. But more than anything, to speak to female founders constantly and learn and hear and get inspired. and so it was hugely advantageous to essentially be doing research for the years leading up to Henning. Talk to me how you kind of got the business off the ground in the early days. Did you quit your job to get started? Did you start it as a side hustle? Like how did things get off the ground? I had spent the previous five years before I started Henning as a fashion editor.

4:56I was fashion writing. I was managing the fashion team which covered the women's wear market but I had a personal niche of covering plus size fashion, because of my personal passion for the space and the lack of coverage. And so those two roles really dovetailed into this beautiful experience of being able to talk about plus size fashion to a huge audience across print, digital, social, in-person events, TV. We had product collaborations and special issues dedicated to size. And so after those five years, I had done so much and I was so proud of it. And I was looking at the future and I really thought I had reached the ceiling on my mission of size inclusion at the magazine.

5:50And so I knew it was time to move on to something else. So I left my role and I took about four months off to really ruminate on what that would be. And initially I thought that I would start a fashion tech company that essentially would be able to provide the ability for any brand to, um, expand into plus sizes because I kept hearing to our earlier point about market research and talking to everyone in the industry, I kept hearing that it was so difficult to make plus sizes from a knowledge point of view, a staffing point of view, a technology point of view, a financial point of view, a marketing point of view.

6:33And I really thought that I could solve all those problems. And I felt that the best way to get consumers more product across the board and really help the world in the most impactful way would be to offer those solutions to as many brands as possible. I quickly realized that I didn't have a lot of advantage and expertise in those areas. You know, I had never been a marketer. I had never made product. I had never built a financial plan. And so I kind of came up against the question, why me? And thought, well, maybe not me. So what I did do was take my small public facing career, my ability to create content community styling etc etc and build my own personal brand of clothing called Henning and that is how it came to be but actually it was not my first idea interesting okay and then how did you get things off the ground so I don't want to spend too much time in the nitty-gritty of like how you found supplies and that kind of thing but I am interested in some things like how did you get the funding together like how expensive is it to start a fashion brand, did you have to do a lot of stuff yourself?

7:47Like what were you outsourcing? Just a bit of that picture for people who are in those early days to kind of understand like what it takes and what you learned while you were doing it. Sure. So the first thing that I did was write a business plan, both a financial model and the business case that essentially is like a very in-depth deck with a lot of storytelling. You'd be very surprised how few people say that was their first step. I'm super interested. And yeah. Okay. So I too am fascinated by this though, because I have a former roommate and close friend who has this incredible business called Yay for Earth and her and I started the businesses exact the opposite.

8:24So she had a passion and a product and it evolved into a business where she first had this product market fit and then backed it into this incredible business. And I did the opposite where I, you know, had this idea and I I was going to go make a product and try to fit it into the market. Anyhow, yes, I too am fascinated by that. However, I really had come from a research point of view and knew that there were reasons that people didn't make plus-size clothing and wanted to put it all down on paper and really see, no, these are the solutions. This is what we're going to do. This is how we're going to do it.

9:02And so I toyed with the idea of venture mostly because other people told me to. Mostly because five, six years ago in New York, startup culture and female foundership, is that a word? Foundership? Was hitting a peak. We were going nuts here. Everyone was getting multi-million dollar seed rounds. It was like the heyday of who can make the next unicorn toothbrush company. And so I went on a few meetings and essentially realized that if I was going to do plus size clothing differently and better than all the companies that had tried it before, I couldn't do it the way that everyone did it before.

9:49And so taking money from folks who didn't understand the customer because they were largely straight size white men wasn't the answer. So we did a friends and family round and I put all of my savings into Henning. From there, I started trying to develop the product. And I was literally going around the garment district, walking into factories, asking if they made plus size clothing. well it shocked me because I'd come from such an efficient world of publishing and that is just not the way that the garment district works here good luck getting someone to pick up the phone and there aren't even emails for a lot of these businesses and so you really have to walk in and present yourself and say your your mission and what you're trying to accomplish and see if it may work.

10:46And so I was doing that with factories that produced the clothing. I was doing that with folks who sold fabric, with pattern makers going on meetings with them. And that's kind of how it got started in tandem. I was collecting money and trying to make the product. I had the business plan written. And then I guess the next prong is I was speaking with potential partners. So Red Antler did our branding. And that's a good example of an early partner that we got off the ground with right away. WeWork offered us office space. Instagram gave us a lot of help. Lee Bell's Rayette shop was a godsend. Virginia Nam even gave us the handle because it was a dormant account.

11:35And so it was kind of like firing on all cylinders across the board. I feel like to have so much just like magic and alignment come through, you must have been somebody who had really figured out how to like tell your story and sell what you're doing in a really clear way. Otherwise you wouldn't have been able to bring all of those folks on board when you kind of like don't even really have anything yet. What do you think, how do you think you learned how to do that? And what are some of the kind of like lessons for people who want to get better at doing it because it's something that I hear about a lot like learn how to tell your story just tell your story every day over and over and over and over again and I think a lot of people are kind of like uncomfortable with it or they're it's the kind of the piece of the business that they are like most resistant to for some reason but I'm really curious about what's worked for you and how you became so clear on what you were saying and and why?

12:32I think that the underlying secret sauce in telling your story is confidence. And I understand, of course, how difficult it is to get up, say your story, pitch your idea, and blindly know that it will work. And so I don't admit to having that all come from the depths of my soul alone, where I think I got that absolutely unwavering confidence is the years before that I had spent writing to, talking with, meeting my plus size readers. You know, Glamour reached one in eight American women. Up to 70 % of women in this country were above a size 14. And so I had the fuel of my community. Over 100 million women I knew felt like me.

13:24And that gave me the confidence. And I'm not saying that that might be the case with every female founder or potential female founder listening. But you can try to find some folks, whether it's three friends, 10 friends of friends, 20 people from a focus group, etc. that believe wholeheartedly in what you're doing and lean on that. When you kind of start to waver in a meeting when someone's trying to poke holes in your theory, think about what you're doing for others as well as yourself. I love that. Okay. So once you kind of had the product and you are out in the world trying to get your first sales, what were you doing in those first couple of years that really worked?

14:05What was getting you traction? What was actually driving revenue in the business? Excuse me. I had an incredible brand director named Jordan Folland who really took on all of our digital sales. And so social advertising was great for us. And I think across the board, that is a skill and a tactic that needs to be nailed for everybody. But I think that what was special to us and what we really saw work in more of an untraditional way was things like studio visits and small VIP events and pop-up shops with like-minded brands because our business is so personal and emotional to the customer. Those moments really sparked that loyalty that we saw customers showing up to multiple events, buying items every drop, sharing the word organically on their own social pages.

15:06And so I think the combination of those two things was really special for us. I often think that such a good marker that you're onto something and you're resonating with people is if you are able to get people to show up in person, it is such a barrier to have an in-person event and for people to make the effort and have the energy and to care enough and be excited enough to turn up and show up. And so I think like doing those regular in-person moments also must've been super validating. Like, you know, that you're really resonating with people if they're getting out of their house and they're showing up.

15:44It was absolutely incredible. And hands down, my favorite part of running the business was interacting with the community. Totally. It's fun as well. Like we love doing in-person stuff because genuinely it's just being behind your screen all day is not good for the soul. Okay. So talk me through your funding. I will say, oh, sorry. I just did want to add as well that we were a small business we weren't paying for event space to have these events we were asking we work if we could use the lobby after hours we were partnering with our dropship vendors like the helm who would rent space and have a few brands within it we would team up with other startups if they were a startup that had a physical store um and so we got really creative with it but the important thing was just that we got in the room with our customer by any means.

16:33Yeah, absolutely. I want to learn a little bit more about your funding story. You bootstrapped in the beginning, you were using your own savings and you had a bit of like friends and family investment. How did things kind of progress from that first year through to acquisition? Were you fundraising? Were you going out to institutional investors? How did that all work? No, we, that was the end of the financial story really. And we kind of built the business to be pretty lean. We were in business for about four or five years. And so we just didn't take any money out of it and kept funneling it back in and we're pretty clever with our dollars.

17:10So, you know, we weren't, we weren't making tons of SKUs. We were, um, just really trying to nail that product market fit and create essentials in new colorways or fabrics. And whereas a lot of fashion businesses make a thousand SKUs a year because it's a business built on trend and seasonality, we really looked at the traditional fashion model and did see the holes that a lot of folks complain about where, and it's just a treacherous business in terms of the volume of product, the expiration of product, etc. And so we kind of tried to get super clever with our business model in that way. And then we actually were able to execute an on-demand marketing strategy.

18:04And so we did at least a year of research and development with factories across the country and landed on working with Tailored Industry in Brooklyn, New York, who was able to cut, sew, and ship orders within 72 hours of placement. And so that really helped our cash flow as well as sustainability. Wow. Okay. I need to understand a little bit more about how that actually works. I think that sounds like a dream for a lot of people. Was it – so people would place an order on the website, you would have some stock on hand, and then as you hit a certain like inventory number, they would make more or was it literally like make on demand when people order something?

18:46Everything was made on demand. It was the goal to move that way and had the business kept growing on its own. If it had not been acquired, my goal was to execute on demand and made to measure so that when you ordered that and they hadn't yet made it, they could actually customize measurements to your specific size. That's awesome. Very cool. You spoke a little bit before we jumped on the show about a couple of things that you had to like figure out as somebody who didn't necessarily come from that like business background around order unit numbers and what it means when something sells out. Talk me through what that learning process was like for you and some of the takeaways that you can share with others.

19:30There were a lot of things about making a product that I just was not aware of before actually doing it. And I think that the number one challenge that I faced as a small business coming into the space was minimum order quantity. So minimum amount of fabric or trim, um, like zippers or buttons that I would have to buy in order to get a certain price and keep it within the pricing margin, the minimum amount of actual pieces of clothing that the factory would cut. Basically minimums are a really, really, really big challenge for small businesses because if you are a huge conglomerate like any business you can probably think of in a mall you're ordering thousands of units at a time in order to get that labor price or that cost per item down um and so i found out that a lot of small businesses in fashion are really making around 50 units per piece.

20:34And so when we started, and we had no idea how the clothing would perform, we negotiated down to 25 units per piece to start. And from there, you know, our black blazer sold out five times over, or some such, and we were able to up those orders to 50 units, 100 units to get that price down and make it more affordable. But I just think that's important to share so that people know what is really happening behind closed doors in terms of units and those costs. And we really tried to educate the customer as well without boring them or being crude or kind of making it unappealing in a way. But our blazers cost$595.

21:24That was at least five times higher than the average blazer on offer for plus sizes in the market. And so we really did a lot of education on what the labor costs, what the fabric costs, the minimums and why that costs more, etc., etc. And so we really tried to share that with our customer. And I do think that it helped her be more on board with spending at a more luxury price point. Switching gears a little bit, you've built a brand that when I Google, it's been written about like everywhere. You've had all of the mentors have written about you. And I am curious about A, when that started, like was it day one, you were able to secure press, you obviously understand how that side of things work.

22:14And also like what role that played in the business. A lot of people are, I think, moving away from press as being a strategy when they're building a consumer business and looking more at like direct channels to reach a customer. So like getting on TikTok and investing in UGC. What role did press play for Henning and what role do you think it plays for consumer brands now? I am so grateful for all of our press. I think that it was so important just for the fact that it elevated a plus size business, right? We had a Women's Wear Daily pre-launch exclusive. We had a Vogue launch exclusive. We were then covered in print and digital by the New York Times, Forbes, Fast Company, Elle, Marie Claire.

23:07I mean, you name it, we were in it. And I think that that was so incredible because of what it did for the plus size community, period. That said, it did not necessarily translate to sales. And so I think that young brands have to decide the motivations for where they're putting their effort, their we did not pay for PR. And so it was such a wonderful addition for that reason. But for say$10 ,000 a month for PR, we would not have seen the return based on what we received for press. I'm not saying that had we paid a PR firm, the press that they were able to bring would not have generated that because it was all incoming organic press.

23:55But I would say to focus on your bottom line and focus on sales and worry a little bit less about what people are talking about and worry a little bit more about what people are buying. Really good advice. Okay. So one of the last things that I ask everyone who comes on the show is for a resource recommendation. And I do have a couple more questions for you, but I want to kick this off in case I have follow-ups. is there something that you did is there a habit that you've had as you've been building Henning that you think other people who want to do something similar should try and check out so of course there are so many things and I think that you know had I been starting the business now I'd probably go through all of your episodes and skip to the end and listen to this question on this answer.

24:44But one thing that I will try to be a little bit different about is that I actually ended up through my rabbit holes of research, leaning on fashion schools. And I didn't go to fashion schools. I was completely new to the environment. But somehow someone put me on to a professor's email at FIT. And you have to forgive me, I don't remember their name at this point. And I emailed at the behest of this advisor, and just explained the situation. And this professor gave me so much tactical, useful, helpful, positive information, granted me access to the FIT library for a day. And I just was blown away by the helpfulness and the amount of knowledge and resources.

25:41And I think that folks in academia are a little less gatekeepy. Yes. Because it's not an industry secret to them. They really are passionate about the space. Their passion is also on a personal level to educate and they have so much resource at their hands. And so I would say, as my resource recommendation, try to find your way into an institution that is an academia that pertains to whatever business you're trying to develop. Smart. That is such a good tip. And you've actually reminded me years ago now, I actually remember reaching out to somebody at NYU who helped me in a really similar way.

26:26And I had been thinking about like maybe going back and getting my master's, but actually I just needed a few pieces of information, blah, blah, blah. And they, same thing, like granted me access to their resources and gave me all of this solid information about who to speak to, where to go. And I had completely forgotten that even happened. So that is such a good tip. Yeah, it was really game changing for me. And it sounds like for you too, and a really fulfilling experience as well. So I certainly recommend it. And the faculty, the faculty emails are on every school's website. It's very easily accessible.

27:03It's like the most easily accessible information in this whole, like in your entire experience of building a business, that will be the easiest person to get in touch with. I want to talk about the acquisition a little bit. And first of all, like how the opportunity came about and what you think that you did right and what you did wrong in building the business that helped or hindered the acquisition process. Great question. Well, let's start with how it came about. So Henning was acquired by Universal Standard in the spring of 2023. I am so... Trying to clap of my microphone. I appreciate that.

27:41I'm so proud and happy. And I just know it's the perfect home. The Universal Standard business was founded a few years before mine. And while I was still an editor at Glamour, I was one of their first desk side meetings, wherein they were speaking to press, I fell instantly in love and was so impassioned to support their mission that, you know, I covered them in print and digital. We later were on panels together. They hosted Henning in a pop-up shop in their Soho studio. The list goes on of all the ways in which it was familial from the get-go. And so when the acquisition came on the table, I just knew that it would be the best place for Henning to live on.

28:25Universal Standard is the most size inclusive brand in the world. We now make sizes double zero to 40. Wow. And I just, I mean, I obviously can't think of a better ending to Henning. So that's how it came about. What I did write within the business in order to have it acquired was, you know what, this is kind of an off beat take or piece of advice, but I didn't step on anyone else to get ahead. and I see a lot of people do that in business and the reason I want to say that is because I have a very specific little anecdote about how this whole acquisition could have been derailed had I been less kind and so when I was starting the business someone had pitched me to run a campaign that read anything but standard with the capital S in standard i.e.

29:25to differentiate heading from standard and say that we were I guess a cut above and I said no I am Canadian I'm not like that and I was like I don't want to have a wheat paste you know campaign around the city putting another business down. And had I run that campaign, we would not be sitting here talking about my acquisition today. So I want to give that piece of advice, just that you don't have to put other people or businesses down in order for yours to get ahead. The Universal Standard co-founder, Alex Waldman, actually used to say on panels, all boats rise with the tide. And I do believe that.

30:06And what I did wrong with the business, I don't know. I don't know that I did anything wrong or to its detriment, I will say that running a startup means that you're constantly solving problems. So you can feel like you're doing a lot wrong, but just having the ability to pivot and be flexible and solve the problem that's on the table today, because there'll be a new one there tomorrow and you better have the energy for that as well. It's just important to keep your head above water mentally. Yeah. Lauren, the last question that I have for you is around hiring and building the team. I'm really keen to understand like how you built the team from year one to now and how you kept things really lean.

30:49What did that look like and what did you kind of learn along the way?