Made In USA - Part I - Bill's and the Downside of Success
"Whatever happened to Bill's Khakis?"
Bill's fans want to know, because they've been getting like 20 emails a week, selling everything from belts to beachwear at astoundingly lavish discounts. They've placed orders but never received the goods. So they kind of have the idea that there's something weird going on. They come in to find some pants and we tell them what Bill has been telling us, in apologetic, explanatory letters. But they haven't delivered anything to us, either, since maybe last summer. Despite Bill's sincere and hopeful tone there is an unmistakably funereal feeling about it. While we wish him success, the story has a morality-play feel about it. The lessons we can learn from this case are classic.
The first is the deadly irony of the limitations of an identifiable style.
As captain of another ship lost in these waters, I can easily relate. I've been there; done that. The truly distinctive, Ivy League of Norman Hilton clothing had made him successful, but such a distinctive look has a sell-by date, and his was about 1985. So even though our "Jivey Ivy" touches had infused new energy into the lineup, Trad was kaput. Done for, on Fifth Avenue, Boston or San Francisco anyway. On the other hand, the retailers who continued to carry Norman Hilton (the core customers who were keeping us in business,) were totally opposed to change. They were, by and large, southeastern and mid-west specialty shops, and they generally held to the theory If It Ain't Broke, etc. Crepe fabrics? More "shouldered" silhouettes? Deep-pleated pants? "That may work for Louis of Boston, sonny boy, but down here in Charleston..." Or Cincinnati... And without these guys we had no business. Rock: Traditional doesn't work. Hard place: Traditional is all we want...
Okay, so, back to the present. Bill's clever motto was "We Made Bill's Better By Not Changing a Thing." Now some companies have managed to move forward and stand still at the same time. Hermes come to mind. Levi's. But in the world of fashion, it's rare. If your brand identity is based on something indefinite, less tangible than a silhouette or a specific look you can do it. Brioni endures because the brand is built on It's Expensive! Bill stuck his neck out from jump street with Khakis in the name and the dude had a hell of a business in cotton pants, but the need for growth being a progressive, chronic disease, he got into bathing suits, sport shirts, sport jackets, outerwear, you name it. And none of it was as well received as the khakis were. So there's that. Brand extension doesn’t always work.
Then he had his own rock/hard place dilemma. Over the years the average guy's notion of how pants fit changed, and while Bill's offered increasingly trimmer models, they weren’t really all that trim. They didn’t offer much in stretch fabrics, thus maintaining the easy, loose look of the khaki pant that his true fan base had come to expect. The pants were, in our store at least, the favored by the fashion-unconscious man, not someone we were really working to attract.
Another fatal factor was a symptom of the disease called The Need for Growth. I believe it’s called "multi-channel marketing." Early on, when the retail customer went to Bill's website he was guided to a retailer like us where he could try things on, get them altered, etc. Bill’s Khakis were the retailers' friend. But in time they became an online retailer; and now guys were coming into our store to try pants on so they could go home and order them online. Retailers love that. This insult later became injurious, as big, well-designed and attractive mail order catalogs were being mailed directly to our customers. Our waning enthusiasm for Bill's Khakis actually went into reverse. We became anti-Bill’s.
The wind-up, or what caused the shipwreck we appear to be witnessing, I can only conjecture about, pieced together from hearsay, gossip, and imagination. But I'll bet this is the basic story:
Building the kind of inventory levels necessary to support large, seasonal catalogs, the expansion of the product lines, sampling, graphics design and production, the basic infrastructure costs and overall expense of servicing a "multi-channel" business -- all this requires major league dough, albeit the kind of financing that hedge funds and private equity funds usually consider small change. Nevertheless, such a “small” investment in a vanity venture (Made in America! Bill's Khakis!) must have seemed like a great idea to some guys who wore them on the golf course, saw them advertised in the Wall Street Journal. And so, in this morality-tale, imaginary version of the story, a bunch of back-slapping private equity got put up and it was all champagne and catalogs until the fund took some unrelated lumps and some guy in the back room, the actual figures guy, the one that cares about only profits and performance, unconcerned about the silly notion of Brand Value, after a few months of witnessing typical apparel company performance, said, "We gotta pull the plug on this loser." Sayonara.
I should think that the loyal fans of Bill’s Khakis will be glad to know that their boy has got his engine back on the rails, and that those wonderfully comfortable, deep-pocketed tan cotton pants are not gone for good. The appetite for Made In USA is growing, and the fashion-unconscious population is still around in great numbers. But a good retailer will not buy a label unless its attached to a superior garment; and it will be a long time before we’ll willingly compete with our vendors on our own home turf.
Moral: if you have a look that is a hit don't mess with it; comfort yourself with the notion that you are very important to a limited audience; eventually your look will lose its luster, but stay with it; and don't let your reach exceed your grasp. Listen to your core customer. Stay humble. And don't, whatever you do, use Other People's Money.