How To Make It As A Clothing Start-Up In Today's Hyper-Dynamic Fashion Economy
Paving your way as a new entrant in the fashion industry can feel like an up-hill, blind-folded battle straight out of the gate. From the constant changing trends, to the rise of the socially-conscious consumer, to the possible end-of-retail era, the clothing industry is one of the toughest industries to navigate as a start-up. I sat down with Canadian born David Helwani, founder of two thriving clothing companies based in New York City and sold world-wide: Twenty, and The Range. We talked about everything from how to get your brand off the ground to the number one question on every clothing start-up’s mind: direct-to-consumer or retail?
So tell me a little bit about yourself. Where did you grow up? What were your interests like growing up?
I was born and raised in Montreal to an Egyptian father and Lebanese mother. Both my parents immigrated to Canada around 1967 and ended up making a life together in Montreal. My dad started working as an inventory clerk for one of the knitting mills in Montreal. He worked really hard, buying small equity stakes over the years until he was eventually able to put together a bid to buy over the mill when the owner retired. So fashion was always a part of my life in a way. But as a teenager I was more focused on music. I had an uncle that lived in LA that would send us soul and r&b music that nobody in Montreal was listening to yet. I started tracking everything about the albums, from producers to writers. I ended up interning in New York for some major record labels. I loved it. But I was feeling a lot of pressure at home to find a more secure path. So I ended up going to law school and working as an intern for record labels during the summers in the legal departments.
At what point in your career did you confirm with yourself that you wanted to create your own clothing lines and that a life in fashion is what you wanted to commit to?
When I graduated law school a lot of changes started happening in the music industry and it became tougher and tougher to work in, especially because I am Canadian so I needed a visa and everything. I had a love for the music industry but that wasn’t going to work out. I didn’t want to sell cotton. That wasn’t what I found sexy or found passion in. But I always felt connected to the fashion industry because of my upbringing. I was more so inspired by the idea that you could make a product and see someone walking around in it. The satisfaction that comes with making the final product. So thats why I said to myself I would rather be in finished clothing, I think that’s where I am meant to be.
What were your initial ideas about what you wanted to create and bring to market?
At first I had no idea what I was doing. I was introduced to a family friend that worked on the import side of fashion. He would import clothes from Europe and sell wholesale in North America. I shadowed him and learned a lot about the wholesale world through him, he had a lot of knowledge about this side of the industry. My dad owned a mill so I had access to the cotton. I didn’t want to take away from anything my family had built or earned so I treated everything as pure business and bought the cotton full price. This family friend was helping me to build some connections in the wholesale world, and I would partner with him on some deals, and then soon after formally turned it into a clothing line.
And by wholesale you mean that you would manufacture the clothes for private labels who would then sell them to customers?
Yeah. Private labels would have the designs and I would manufacture for them. Like you could make clothes for Helmut or Public School and it's brought to market with their brand name, but you manufacture the actual material. It’s a different world.
So at this point you still are not on the branding or consumer side of the industry, right? How and why did you make the move to the finished product side and start Twenty?
As I was making these clothes for private labels the thing that stuck out to me the most was the power of branding. I started seeing brands like True Religion, Se7en, and other super premium denim lines selling their products for like $300. At the same time, my dad was making these really thin but high quality cotton fabrics, but they were only doing well in Europe and not really being sold in North America. So I thought to myself, if someone is spending $300 for a pair of denim then for sure he or she would want something nice to go on top, not a low quality t-shirt. There were a few better label t-shirt lines starting to form but the scale was quite wide. There would be like Hanes and then Armani. A few in between but nothing like there are now. So we realized that branding in the premium segment was the way to go. We started making premium t-shirts and called the company Twenty because “T” is the twentieth letter in the alphabet. So we came up with Twenty Tees. We didn’t fully know what we were doing, but we saw the market gap.
I know when you first launched it was just a female collection. What was the strategy behind that?
It was a combination of two things. One, women spend more on clothes. If you are going to be successful in clothing in a big way then around 20% of that business will be mens and 80% women's. It’s a different purchasing behavior with women. Two, the fabrications that my father was selling were primarily to women’s lines. He was selling a lot of fabrics to ready-to-wear companies and to top designers that were geared primarily to women’s clothes. So starting with just a women’s line made the most sense for us.
What did the first year look like? How did you get your brand off the ground?
Trade shows. We went to trade show after trade show and would sit there hoping for people to come. Trade shows were really the only outlet back then. You would have all of the buyers there. We actually ended up getting discovered pretty early by Intermix and Neiman Marcus, and soon after, Nordstrom. But I think for us we stood out because we were one of the youngest brands and entrepreneurs at these trade shows. It was a new crop of me and a few friends that came in, we had a lot of energy and stood out.
I feel like it’s one thing for your brand to be discovered, but another thing for stores and retailers to want to work with you and sell your clothes. Why do you think you received a positive reaction from companies like Intermix and Neiman Marcus?
There was a need for what we were offering. We were selling high priced premium t-shirts and boutiques like Intermix were starting out that were also premium and trying to differentiate themselves from existing competitors. They needed that type of product in their stores. In a way it was also kind of a dumb-luck too because that was also the only thing I had at the factory. So we had to figure out what we were going to do with the resources we had. I also didn't want to be going around to other mills because I wanted to support my family in a way. Manufacturing was going through a really hard time then because a lot of plants were relocating to Asia.
What about financially? How did you keep up with the costs?
We had a small bit of cashflow from doing private label in the beginning, but our start was a lot like the show “How to Make it in America.” We were making a little bit, then using what we earned from that to make more. Then would do some hiring if we had the money. But we started pretty much on nothing. Just like any other start-up would be.
How were you branding yourself at the time? What resources were you using to market your brand?
We weren’t really branding ourselves intentionally or effectively at the start. We didn't even have a website or do lookbooks or any of that. I remember the first label we had was the Square Root of Twenty. It was terrible, it didn’t look good. But it still sold in Intermix like that. It wasn’t until 2011/2012 when competitors started entering and all of these LA brands started popping up that we realized that we needed to really show how we were different. We had to make our clothes and image more expensive. We built a website and started doing real photoshoots and lookbooks. But differentiating really came down to the idea of the brand and the story we were telling.
What story did you find important to tell about your brand?
The story about who we are. We are this brand that is 100% vertical in manufacturing. It is all under one family business. We receive the yarn, put it onto the machines, knit it, dye it, finish the fabric, bring it to the cutting table and sew it. And then twenty specifically is designing and producing the clothes. So we really do everything in one place. And then if you add the fact that we also sell online then we are 100% vertical from raw material to end consumer. It provides a huge competitive advantage to us because if there were every any issues or concerns with quality or production, everything was being done under one umbrella so it was solved immediately.
So once you break into the market and secure a few contracts and start to gain some traction how do you keep growing and expanding?
Well you have to make sure you build a strong reputation with your existing partners from the beginning. I was taught at an early age by my father how important reputation is in the fashion industry. Don’t lie, be completely honest. We built a lot of goodwill with the companies that we worked with so they let us try new things. In 2012/2013 we started our first expansion into menswear by doing a small exclusive line with Bloomingdales called Supima. We licensed their name, gave them a royalty, and created a true essentials brand for men. Eventually I realized that we don’t need to do Supima and we should just do Twenty mens. So in 2015 we started doing an actual mens line. I had to go back to the beginning and hit up all the mens buyers. I didn’t know any of the mens buyers so I would leverage the contacts I had with stores and asked to be introduced on an email to their men’s buyer. The men’s buyers were open to talking with us because we had a strong reputation on the women’s side. They knew we always came through.
How do you balance being on trend and relevant with staying loyal to your initial plan?
Did you see the New York Times thing with Jay-Z? Where he said that he doesn’t go after trends, he just wants to be there, like he wants to be there at the end. For a knit brand that does what we do, and I consider us essentials with a twist, but at the end of the day it’s stuff that we hoped you would wear more than once. Things that you would want to wear for like three years. So we try to have that focus when we design our clothes. Jumping onto every trend is a reactive approach, and you will start losing your identity. You have to always remember who you are designing for.
Lets jump to the retail world for a second. The entire industry is being disrupted by new direct-to-consumer lanes. What would you say to a new clothing designer? Would you recommend that they just focus on growing their direct-to-consumer channel first? Or still try and collaborate with retailers and focus on getting into stores?
Definitely direct-to-consumer. I would never go into wholesale. Not that I am not a believer in it, but if you have limited funds you can get the most out of your dollars online. You won’t get very far with those funds in the wholesale route. They charge emerging designers just as much as they charge an established company. In your first year if you put $20k into your clothing brand you might make $17k or $18k. Or maybe if you have a good product you sell out and make $30k. But the next year after you get that crucial data on who to market to and who to target from your Facebook versus Google ads etc.,. That initial 20k becomes 60k or 80k. It doesn't grow that way with wholesale.
What’s a critical success factor for building a strong brand online?
You have to be able to tell your own story. Your brand’s story. There is a thirst for it and people connect to it online because they aren’t going to physical stores as much anymore; they connect based on words. Customers are saying things like, “I like this because the owner seems like a nice upstanding girl or guy, or they like the same thing I do.” If you can properly translate what your brand stands for, tell your story, and embed all of it into your products then you will do really well.
What is one piece of advice you would give to someone starting a clothing brand today?
Starting a clothing brand today you have the ability to be so detailed in your own public relations because there is a very low barrier to entry. You can easily start a Shopify site. If you have a few thousand dollars then you can get a pattern and a couple of samples made. It's ok to focus on one thing; like if you just want to do that 3D camo knit activewear and say this is our idea and this is the “why” behind it then do that. Build the press on why you did it and tell the whole story. Not everyone is going to like your idea or take it seriously, but you have to believe in what you are doing. It’s so important that you stay true to what you are building. Trends are going to change all the time but that doesn’t mean its the right fit for your company or your brand. Be willing to miss out on a few dollars to stick to your long-term plan.
What did we learn:
- David saw an unmet need in the market for premium t-shirts
- He leveraged his competitive advantage: in-depth knowledge of cotton and knitwear and access to facilities
- He focused on a core target market to start: women who purchase premium denim from brands like Se7en and True Religion
- He hustled from trade-show to trade-show to get his brand off the ground, but believes that hustle now exists online
- Focus on direct-to-consumer over retail
- Your brand needs to have a strong and defined identity and story
- A few thousand dollars is enough to get started: focus on your market-entry product, make the samples, build PR around it, make a splash online
- Focus on your target customer and long-term vision over quick turnover trends