Inside True Religion’s Next Era of Growth

0:00This episode of Retail Remix is brought to you with support from National Retail Federation. Yeah, are we happy with the$525 to$550 million we'll do this year? Yes. Can we be a multi-billion dollar brand? Absolutely. You know, based on the size of our audience, the size of the product lines that we sell, and the fact that the price points are worth half the volume. So to me, that's not a, you know, that's not a fad. That's not a comeback. The brand has continued, like I said, year over year to sell more and more units. We're just getting it in the hands of a lot more consumers today. We consider ourselves like in the third inning of a baseball game here with a tremendous amount of runway ahead.

0:46Welcome back to Retail Remix. I'm Kate Robertson, the editor-in-chief of Retail Touchpoints. Fashion is full of brands that shine for a brief period and vanish. Very few come back from the edge and almost none come back stronger. True Religion is one of the rare exceptions. After defining early 2000s premium denim, True Religion endured two bankruptcies, new owners, and a fashion world that had largely moved on. About a year ago, True Religion's creative director, Tina Blake, joined us on Retail Remix to walk us through the creative side of True Religion's impressive return to growth, the product, the partnerships, and the cultural connections that pulled a new generation in.

1:30Today, True Religion CEO Michael Buckley, who returned to lead the company in 2019, is joining us to share an update on where the company is at now in its growth journey, what has operationally shifted to make that all happen, as well as where True Religion is headed next with its aggressive revenue and retail footprint growth goals. Let's get into it.

1:57Michael, welcome to the show. Thanks for having me. True Religion is one of those rare brands that survived major ups and downs and still matters culturally. What did you realize the market still believed about the brand that made a comeback possible? Well, True Religion has always had an emotional connection with consumers. You know, I think some of the view of the brand is that, you know, the brand has had, you know, sort of ups and downs over time. And the reality is this company or this brand sold more units every single year since 2002 until today. So what has stayed consistent is our belief in the heritage of the brand, the horseshoe, the Buddha, the stitch, you know, the iconography of this brand.

2:40And there's always been a tremendous audience of people that love the brand. We've changed the business during my time from what was a jean company once upon a time. I also did run it the first time from 2006 to 2010 as a premium denim company. You know, today it is approximately 35 % jeans and 65 % what we'll call sportswear and accessories. I mean, we're in every apparel classification there is. T-shirts, hoodies, joggers, button-down shorts, skirts, dresses. in addition to maybe 10 accessory categories. And just to demonstrate the strength of the brand over time, we'll do approximately 40 million units this year between apparel and accessories, as opposed to when I left the business in 2010, it was about$3 ,319 ,000 jeans.

3:29It was a lot of very expensive jeans. So today the price point is very accessible. Vast majority of everything we sell goes out the door between$30 and$80. So the audience that we can go after today is much larger than it's ever been in the past. However, we give them what they want in terms of the heritage product, where they can buy in and at the price they want. What else can you tell me about how the business has been performing this year? The business has been performing, and I wouldn't say, just say this year, but really over, I mean, I came back seven years ago and took us a year or so to get the changes we made, you know, executing in place.

4:07Business is phenomenal. Last year, we did$470 million in revenue,$124 million of adjusted EBITDA. We make about 26 % pre-tax profit, or what we call EBITDA. This year, in 2026, we'll do between$525 and$550 million in revenue, and north of$140 million of EBITDA. So this is very successful. We sell many channels. Years ago, it was probably driven by our own retail. Today, it is truly Omnichat. Wow. So how do you know that this is more than, you know, just a resurgence of interest from people feeling that nostalgia for, you know, Y2K and the early 2000s? What makes you feel like this is sustainable?

4:51You know, the fact that we continue to see more and more units that we sell each year, you know, our audience today. And one of the first things I did when I first came back to the brand was to really understand who is the customer today? And we did that research and it came back very clear. This is men and women, call it 15 to 50. The core is really kind of 24 to 45 years old. African-American, white, Latino, Asian, all races. But it's about 75 ,000 household income. That audience happens to be about 110 million people strong. And you couple the size of that audience with the fact that the$30 to$80 AUR that we sell at is where about half of the$300 billion of apparel and accessories is sold at.

5:35Couple that with the fact that we have a large e-commerce business, somewhere between 35 % and 40 % of our business. I'm in 5 ,000 wholesale locations globally, about 4 plus thousand in the US alone. And we have like 60 of our own stores that are a 365-day-a-year billboard to show this customer what we continue to do. So, you know, as much as, yeah, are we happy with the$525,$550 million we'll do this year? Yes. Can we be a multi-billion dollar brand? Absolutely. You know, based on the size of our audience, the size of the product lines that we sell, and the fact that the price points are where half the volume is.

6:15So to me, that's not a, you know, that's not a fad. That's not a comeback. The brand has continued, like I said, year over year to sell more and more units. We're just getting it in the hands of a lot more consumers today. We consider ourselves like in the third inning of a baseball game here with a tremendous amount of runway ahead. So exciting. When you rejoined the brand, what do you think you saw in it that perhaps other people didn't? Or what did you understand about True Religion? You know, the consumer, I've never seen it in. I mean, I've been in this space for too long. For 30 plus years, I've been in the apparel space between private label, diesel, Ben Sherman.

6:54I mean, I built and sold a couple of brands, Robert Graham. The love for this brand with the consumer is like unheard of. You know, I look at, you know, we've used the analogy, true religion is the Ralph Lauren for the urban casual customer. And that's the reality. You know, like Ralph has the, or Paul Ralph Lauren has that horse, you know, the pony player on the horse. That means status. the true religion horseshoe or the true religion name or higher stitching that means status to this consumer even though you can buy it for you know 10 or 20 dollars more than levi's or you know some of the other volume brands out there calvins and tommies and ralphs of the world it still means status when you're wearing that horseshoe and people just people love the brand you know there's just huge emotional connection which hasn't changed you know over the last you We've been around since 2002.

7:45So it's been a 25-year run here. And as you moved into the role, you talked a little bit about prioritizing, really understanding the consumer. How did you go about doing that? Well, like I said, the first thing I did when I, I mean, I started in November, I started the second time, November of 2019. I thought I knew who the customer was just because I'm in the industry. I walk around, I go shopping in different centers constantly. I'm in New York and LA and Miami and the other big cities. And I see who was wearing the product. And I'm like, I just want to understand because it was very different than the, what I'll call Nordstrom, Neiman Sachs, Bloomingdale's early adopters that bought the brand from the beginning that were paying 300 dollars for a pair of jeans.

8:27So we did that survey, came back very clear, African-American, white, Latino, Asian, you know, call it core in this 24 to 45 year old zone, but a much more moderate household income audience. Years ago, it was a 250 ,000 household income customer. Today, 85 % of it is less than an 80 ,000 household income customer. So more average income, average American income customer today, more of the masses, I would say. There's 110 million people that fit in our addressable market. So I wanted to understand that. And I also wanted to understand our philosophy is we We sell the customer where they want to shop.

9:08So I might sell them at Macy's or Dillard's or JD Sport or, you know, Zooey's or PacSun or they might want to go to TrueReligion.com. They might want to go to TrueReligion stores. They might want to go to some of the off-price guys out there because they love the brand, but they just, you know, they just can't afford the line and the full price channels. So our philosophy, and we're very good with it, is we sell the consumer where they want to shop. and knowing the consumer, we give them the product they want. We're very good in terms of what's, you know, years ago we created the trends. We don't create the trends today.

9:41I use the expression, we're first to be second. So we're making sure that we give the customer they want in terms of on-trend product, whether that be on a jean, on a graphic t-shirt, on a hoodie, on a jogger, on any product that we do. You know, we do a lot of handbags. We probably do$50 million at retail in women's handbags. But they have that horseshoe on it. They have the stitching on it. They have some of them are denim. The silhouettes that they're using are very much in trend silhouettes for a handbag. So again, it's knowing a customer, giving them what they want, making sure the product is on trend and they have the ability to afford it.

10:15And they want to buy it where they shop. So that's critical for us. So as you were expanding distribution points and also product categories, were you doing this simultaneously? Did you prioritize one over the other? You know, we've been or the company's been trying to expand into other product categories since I was here the first time, quite frankly. I just think over time, when the jeans were$250 to$300 or$320 in the case of a pair of Super T, very little consumers could afford that. So what got them into the brand was when we got into the T-shirt business and they could buy a T-shirt for$29,$39.

10:59or they could buy a fragrance for$40 or$50. So they got into true religion, but it was like through some of these product categories. And then over time, we got into all these product categories. As we tested one, we realized, hey, men's button-down woven shirts, they want that as long as it has the stitching or the horseshoe on it. You know, we're not selling commodities here. They want the branding, the heritage on all the product we do, whether it's product we do ourselves or product we do through licenses. When you talk about building True Religion into a broader lifestyle brand, how else does that come to life in addition to really meeting people where they're at and developing all of these new expressions of the brand?

11:42Yeah. I mean, I think when you talk about continuing to scale the business and quite frankly, staying relevant with the consumer, yes, you have to have the product. Yes, it has to be accessible to them from a price point perspective. Yes, you have to put it in the channels, whether it's online or in stores where they want to buy it. But you also have to have the marketing behind you. You have to have celebrities and influencers and people that make the brand relevant today. You know, like we have, you know, organic following with, you know, like Timothy Chalamet and Kylie Jenner and Alex Hurl.

12:14And I mean, I get the list goes on and on. I mean, over the years, you know, once upon a time, it was, you know, at the beginnings of the brand, every celebrity had the product on. But they bought it at retail, which was even more lovely. You know, so organically, people are wearing the brand. And we also, you know, we have a huge affiliation with music, with entertainment. And, you know, we do deals with, you know, we use Megan Thee Stallion this year. We use Zara Larsen. You know, we've done 2 Chainz and Chief Keefe and Quavo. And we have a big affiliation with hip hop. I mean, hip hop, there's 135 million people in this country that listen to hip hop, you know, and the brand has always had a connection with hip hop and with hip hop artists.

12:54So we continue to use them as faces of the brand in addition to the people that organically love us. In addition to, you know, we're building an army of influencers, you know, people that love the brand that want to wear the product and talk about it and post about it and put it all over social media. So, I mean, those are critical to stay relevant as a brand. In addition to, you know, you've got to have all these things right. You've got to have the product right. You've got the distribution right. You've got to have the prices right. And you've got to have the marketing machine. And I think we've done a great job and we've doubled the size of this business over the last three years.

13:27Amazing.

13:52Come join us at the Javits Center, January 10th through 12th, and move your business fast forward. Visit nrfbigshow.com for details.

14:07Retail is also a major bet right now for True Religion with new U.S. store openings and a goal of reaching about 150 stores. Why is physical retail so important to your next phase of growth? Well, first of all, we're commercial animals and our stores are highly profitable. I mean, our stores average close to$1 ,000 a square foot in sales and the entire fleet, which is about 60 stores, I think it'll be 63 by the end of this year, delivers 45 % full wall profitability. I mean, that's one of the best in the industry. Not to mention, I mean, stores are a 365 day a year billboard. you know, where we can showcase the product, we can showcase our imagery in the stores, we can communicate directly, you know, the customer comes in, they can touch and feel, you know, and that, you know, like depends on the generation, like the younger generation today is going into stores.

15:04You know, I think the millennials were more wanting to buy online, the, you know, the older generation, you know, I think wanted to go into stores also. But there was this kind of gap for a while where the millennials only want to shop online and, you know, more developers were like, you know, like worried that the customers, you know, And the reality is people are going back into stores. We're rolling out stores. You know, we have our medium term, which is kind of like four or five years, is to get it to 150, which is not that big a goal considering where we're positioned from a price perspective today and the fact that we serve both genders in all these different product categories.

15:38So we believe in it. We also believe in e-commerce. We also believe in wholesale. So stores represent circa 20, you know, somewhere in the 20, 25 % of the business today. Do we see that becoming a bigger portion? As the entire business goes from, call it 550 million this year to a billion, it's probably going to still be in that 25 % zone while e-commerce grows at a faster rate, while our wholesale business continues to grow. So the proportion will be there. There'll just be a lot more stores. What is it that's bringing people back to stores, do you think? I think people want to, especially the younger generation, I just think they, you know, sometimes they also don't want to do what their parents did, you know, and as their parents were the onliners and they like the store experience.

16:22They like getting out there. They like touching and feeling product. You know, we also do some nice things in our stores. We do embroidery events. We do music events. You know, so it's a better experience than just walking into a stack of clothes. And we put payroll in the stores to service the customer, talk about the brand, showcase everything we're doing there. So they want to get out. And I think after people being locked up during the pandemic, certainly the younger generation couldn't wait to get out. For sure. Yeah. I mean, I sometimes think I just want to shop in stores more often because I'm tired of making mistakes online, like buying the wrong size or having to go through the return process.

17:00So if I go into the store, then I have a better shot at actually getting what I'm looking for. As you look ahead, what is the hardest part of scaling from a smaller brand to an enduring billion dollar lifestyle brand? I'm not going to call it a comeback because this is not a comeback. But yeah, what has been the most difficult part? You know, I think the most important thing is that we have to stay what we'll call dialed in on every piece of the business, starting with product. We have to make sure that we have the right product. We have to make sure we're on trend. If the market shifts into a denim cycle or not in a denim cycle or a more casual cycle or a less logo-driven cycle, we have to make sure that we are, like I used that expression before, first to be second.

17:48It starts with product. You have to have the right product. You have to make sure that we can source the problem. We have a very strong product margin structure. We have to be able to make sure that we can work on a very strong margin structure. We have great operations to be able to bring the goods in, ship them out. You know, we have a great retail team. You know, I hired a retail team that came out of Sketchers that ran 500 stores. You know, like they will help us scale from 60 to 150 stores. You know, so we have a great retail team. Wholesale, strong team as well. We're in four or 5 ,000 locations.

18:21We can probably be in another thousand locations, but we could also go a lot deeper in the existing stores. You know, we might sell$30 ,000,$40 ,000 per store today. That's nothing. I mean, my stores are doing a million and a half,$2 million. So we can go a lot deeper there. So we have to be dialed in every piece of the business. You know, e-commerce, it's like I just brought in a new e-commerce leader. It's probably about six months ago now who is at Urban Outfitters from$300 million to$800 million online. Wow. You know, I want people that have been there and done that. So it's about executing at every level, but it's all about people.

18:56You know, years ago, a buyer at Macy's said to me, this business is simple. It's all about people and product. And they're right, but you need the right people who can make the right product, who can market the brand, you know, marketing critical, all these pieces of the business. I have like a graph that I use, and it's like these 10 pillars of growth and profitability. And it's all these different things, and you have to be dialed in on every one of them. And then we make changes. You know, if, you know, we need to pivot if the market changes, if the people that are trending influencers change, you know, we have to change with them.

19:29The key is we want to be with the people in a product that are trending at that time. You got to stay on, you have to stay relevant. And that is the most important. You have to stay relevant and obviously execute across every aspect. On that note, I'll move to my last question. What's going to be trendy in the coming months? What are you excited about that True Religion is bringing to consumers this holiday season or beyond? You know, I mean, we have a our line is very diverse. So, I mean, obviously we are in we make sure that we have all the different silhouettes on the jean side. You know, our customers loves the logo.

20:04Our customer loves on a woman's side. They love crystals. They love cherries. They love, you know, some of the different treatments that we do. It's like we have to give them another reason. They already have three hoodies, but this one's different. And we have to give them another reason to keep coming back and buy that hoodie. So to me, it's just giving them, you know, we're in the categories we want to be in. We want to be deeper in button down shirts. We want to be deeper in sweaters. We want to be deeper in outerwear. I mean, use the categories that are like 2%, 5 % of our business. So it's really just making sure that in each gender, we are giving them what the trend is at that time.

20:38You know, for a while on a men's side, it was oversized tees. It was like these large graphics. but it changes. And you got to make sure that when it starts to cool down, you're on to the next thing quickly. So stay tuned. I mean, we have a lot of fantastic product. We have a huge marketing campaign for holiday, which we just shot in New York last week. All coming soon. Great. Thank you so much for joining us, Michael. Thank you. Appreciate you a ton. Thanks for joining us for another episode of Retail Remix. Be sure to subscribe so you don't miss a future episode. You can find us on Spotify, Apple Podcasts, YouTube, or your favorite podcast app.

21:15Until next time, keep mixing it up.