Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Business
Speaker 1: Week with Carol Messer and Tim Stenebeck on Bloomberg Radio.
Speaker 2: So good, all right, everybody. It is official Roan, known
Speaker 2: for its apparel line for men. It's been around since
Speaker 2: twenty fourteen, now backed by Blackstone executive David Blitzer, former
Speaker 2: hedge fund manager Gay Platkin, and ex football star Tim
Speaker 2: Tebow and Moore, and now some might finally say, I
Speaker 2: will say finally out with the women's line. The line
Speaker 2: went live online for early access yesterday, fully launching next week.
Speaker 2: Back with us someone well known to our audience. He's
Speaker 2: been joining us since the very beginning. Natecheck, It's co
Speaker 2: founder and CEO of Roan, right here in our Bloomberg
Speaker 2: Interactive Brokers studio. It does feel like family. We've been
Speaker 2: watching you on this ride. First of all, how are you?
Speaker 3: I'm doing great? I mean, I feel like Carol, you manift.
Speaker 3: I said this because the first interview You're like, Okay,
Speaker 3: so when are you going to do women's and such
Speaker 3: great stuff? Yeah? No, it's we are so exciting. We
Speaker 3: are so excited to bring this to the market, and
Speaker 3: the initial reaction has been unbelievable.
Speaker 2: So why so long?
Speaker 4: Wait?
Speaker 2: I just kind of shu, why so long?
Speaker 4: Sorry?
Speaker 3: Well, we did a capsule collection back in twenty nineteen
Speaker 3: on International Women's Day, and the thought was, Okay, this
Speaker 3: will be a little test. We'll see how the market
Speaker 3: reacts to it. And it went well, and then, of
Speaker 3: course we have a global pandemic the next year, so
Speaker 3: we decided not to anniversary it. Yeah, we pulled back,
Speaker 3: and then really we made the decision two and a
Speaker 3: half years ago, Okay, we need to do this, but
Speaker 3: let's do it the right way. Let's think through every aspect.
Speaker 3: And it impacts everything from store layout to mannequins to models,
Speaker 3: to the brand marketing. How are you shifting the message?
Speaker 3: So we really brought investing class talent across every aspect
Speaker 3: of the business and starting most importantly with the product.
Speaker 3: And it just takes a while to do it, right.
Speaker 5: Is it hard from a communications perspective because you've been
Speaker 5: known for a decade as being a place for men,
Speaker 5: and perhaps customers might walk by a store and say, well,
Speaker 5: I'm not going to go in there because they don't
Speaker 5: have product necessarily for me.
Speaker 3: Yeah, I think that has been the brand marketing challenge.
Speaker 3: And I think if you look at the industry, there
Speaker 3: are certainly brands who have done this very well, shifted
Speaker 3: from men's to women's or women's into men's, But then
Speaker 3: there have been brands who have taken some big missteps
Speaker 3: in that. And one of the things that we were
Speaker 3: adamant about from the beginning is this is not taking
Speaker 3: our men's product and creating women's product. This is taking
Speaker 3: our customer, putting her at the center of the journey
Speaker 3: and making product uniquely for her, unique fabrications, unique fits,
Speaker 3: unique cuts, and that it can be the lines can
Speaker 3: be complementary, but they're not meant to be, you know, symmetrical.
Speaker 2: How is it more difficult in terms of creating a
Speaker 2: women's line versus a men's line.
Speaker 3: There's certainly a lot more competition. Yeah, and I think
Speaker 3: there's more pressure to have newness and be on trend
Speaker 3: in fashion. We joke in the men's space, it's like, well,
Speaker 3: make sure you have black, navy and gray and you're fine.
Speaker 3: But even the men's space has evolved over the last
Speaker 3: several years. The men are more kind of fashion forward
Speaker 3: and leaning into trent and style. So we brought in
Speaker 3: really a best in class team on the merchandising and
Speaker 3: the styling and the design side, and we're really seeing
Speaker 3: it on the initial reaction. We launched an early access
Speaker 3: yesterday and in the first day we started breaking on
Speaker 3: a couple of styles, meaning we were selling out of
Speaker 3: a few key sizes, which we had not anticipated to
Speaker 3: happen for the first four weeks. So the reaction has
Speaker 3: been just unbelievable.
Speaker 5: What's the ultimate goal for revenue mix for this is it?
Speaker 5: Do you want this to be fifty to fifty? Do
Speaker 5: you want women to be sixty forty?
Speaker 3: Now we're we've done a three year model and we
Speaker 3: see a path to getting the brand to a fifty
Speaker 3: to fifty mix. Women are obviously more prolific shoppers than men.
Speaker 3: They're just better at it. They know, they stop that,
Speaker 3: I hear that at home. They know what they want
Speaker 3: and they you know, they're willing to lean in and
Speaker 3: try new things. I think the challenge is if you
Speaker 3: can get a male customer, you can keep him generally
Speaker 3: a lot longer. He tends to go back to what
Speaker 3: he knows and likes. He's harder to get.
Speaker 4: That's the men are lazy.
Speaker 3: Yeah, yep, that's a good, good interpretation, like what you
Speaker 3: like exactly right. But women, you have to earn that.
Speaker 3: You have to earn that next purchase every single time,
Speaker 3: and we take that seriously. So to us, it starts
Speaker 3: at the fabric level, the quality of what we do,
Speaker 3: and I think as we put hands you know, everything
Speaker 3: from our fit model to our actual fashion models. They've said,
Speaker 3: you know, they work with every brand in the market
Speaker 3: and they're like, this is the softest best fabric I've
Speaker 3: ever felt. So we think we're doing something right. How
Speaker 3: do you go.
Speaker 2: After getting the female customer? Women customers versus men, Like,
Speaker 2: I'm curious, what was your approach?
Speaker 3: Well, we have a slight advantage here versus a new brand,
Speaker 3: which is we already have a big database of women.
Speaker 3: Thirty percent of our men's product was being purchased by women,
Speaker 3: which is about the inverse of some of the big public,
Speaker 3: more female led brands. It's usually like the opposite of that.
Speaker 3: But we had a database of active female shoppers, and
Speaker 3: then we've just been very strategic about going out targeting
Speaker 3: who we think she is on social building up some anticipation,
Speaker 3: some great pr We've had a lot of incredible press
Speaker 3: and you know, this is not a one month thing.
Speaker 3: This is a we've learned in ten years. You've got
Speaker 3: to keep consistent.
Speaker 5: No shortage of this type of apparel for women out there.
Speaker 5: I mean, like it's weird to say og like, you know,
Speaker 5: it's not really even Lululemon, but you have Lululemon, you
Speaker 5: have Athleta, you have Yery out there. How do you differentiate,
Speaker 5: how do you make this distinct? How do you build
Speaker 5: this brand from the ground up?
Speaker 3: I think one of the things that we have really
Speaker 3: prided ourselves on as we've built this line is almost
Speaker 3: every Active brand is based on the way West Coast
Speaker 3: and there is definitely a West Coast aesthetic. And what
Speaker 3: I've said internally is since when was New York not
Speaker 3: the capital fashion capital of the world. So we try
Speaker 3: and bring a New York aesthetic and trend and focus
Speaker 3: into Active. But we start with a root of performance
Speaker 3: at the center of what we do, versus taking kind
Speaker 3: of a ready to wear and then trying to use
Speaker 3: active fabrics. We combine the best of both worlds to
Speaker 3: kind of bring that to the market. And I think
Speaker 3: the other big focus for us is how do we
Speaker 3: make her you know, powerful, strong, independent. We think a
Speaker 3: lot of these brands look the same because it's all yoga,
Speaker 3: endless hours of yoga loops. But we think our customer
Speaker 3: is maybe she's sneaking yoga in in fifteen twenty minutes
Speaker 3: and she's working hard, she's taking care of people, she's strong,
Speaker 3: she's independent, and we want to position her that way
Speaker 3: versus you know, you've got two hours in a yoga
Speaker 3: studio to do whatever you want, because none of our
Speaker 3: customers live that way.
Speaker 2: Interesting because as someone who's done yoga for a lot
Speaker 2: of years, I mean, there are yoga clothes, but they
Speaker 2: look like yoga clothes. I'm not really I'm not dissing
Speaker 2: them or anything.
Speaker 3: Love them.
Speaker 2: They're really comfortable, but there's there's a professionality. Is that
Speaker 2: a professionalism I guess sorry making up boards as it go,
Speaker 2: but a professional aspect to the things that you guys
Speaker 2: do that look it's just different.
Speaker 3: Yeah, we we think about it as the difference of
Speaker 3: ath Leisure is obviously a term that has gained a
Speaker 3: lot of importance in the market, but I dost think
Speaker 3: you're Yeah, the way we think about ath leisure is
Speaker 3: it's made to look athletic, but you can't actually work
Speaker 3: out in it. Yeah, So we call it performance lifestyle,
Speaker 3: which is you can do anything in our clothes. You know,
Speaker 3: you know, I've run a marathon in our dress shirt.
Speaker 3: You can literally do anything, but you're going to look
Speaker 3: professional when you wear it.
Speaker 5: Is that the same when it comes to the women's line,
Speaker 5: I mean the more active formal line that you had
Speaker 5: that you developed for men's came a little later than
Speaker 5: that first active wear stuff. Are you following a similar timeline?
Speaker 5: Are you going to kind of release everything right now?
Speaker 2: Now?
Speaker 3: We're following a very similar flow, which is let's root
Speaker 3: ourselves in performance. So the initial line you'll see is
Speaker 3: very active focused a lot of course to court. You
Speaker 3: may have heard we signed the LPGA, were the official
Speaker 3: Encourse apparel partner there, so you'll see us on a
Speaker 3: lot of green grass accounts, tennis courts, pickleball courts, and
Speaker 3: then a lot of the lifestyle will start to be
Speaker 3: added in afterwards.
Speaker 2: So can we assume at some point and like, I know,
Speaker 2: we've got more time to come back, but like suits,
Speaker 2: like a suit that is kind of the casual, but
Speaker 2: do it for men.
Speaker 3: Yeah, you'll see in some of the marketing. There's a
Speaker 3: lot of really exciting stuff that I think the professional
Speaker 3: woman will feel very comfortable wearing into the workplace.
Speaker 2: Do you still have fun doing this?
Speaker 3: Oh, my gosh, I'm having the most fun I've ever
Speaker 3: had right now. This is it's ten years, and certainly
Speaker 3: I've had periods of founder burnout. But I think since
Speaker 3: we took back full control of the business and we
Speaker 3: really kind of started to chart our own destiny, it
Speaker 3: just changed the way we feel about it.
Speaker 5: You took back controlled eighteen months ago, roughly didn't make
Speaker 5: it public though until just last fall. Give an update
Speaker 5: on the business since taking full control.
Speaker 3: Well, last year was our biggest absolute growth here ever,
Speaker 3: and the business is growing almost twice as fast this year. Yeah,
Speaker 3: So we feel really encouraged about that decision and the
Speaker 3: team that we've put into place and the investment in people,
Speaker 3: and you know, we have big growth goals. So we
Speaker 3: still feel like we're in the early innings of where
Speaker 3: this can go. But it's been a journey ten years.
Speaker 2: We're talking with check Its Nate check It's co founder
Speaker 2: and CEO of rown A, still in studio with us,
Speaker 2: so expanding into women. You still talk about growth going
Speaker 2: forward ten years in what's the next ten years? Like,
Speaker 2: how do you think about it?
Speaker 3: Yeah, well, sorry, no pressure. I think the thing that
Speaker 3: I am most excited about is we have from the
Speaker 3: beginning of our customer journey, we have focused on what
Speaker 3: we call mental fitness, which is really just an emphasis
Speaker 3: on mental health, taking care of yourself both physically and mentally.
Speaker 3: When we came into the active market, you would see
Speaker 3: all of these marketing messages of you're an athlete, you know,
Speaker 3: lift more weight, run faster, jump higher, and we think
Speaker 3: there's such a missing aspect of recovery and taking care
Speaker 3: of yourself and the space between your ears, and that
Speaker 3: is a very unique problem in the men's market. So
Speaker 3: it was an easy area to focus on. But everybody
Speaker 3: needs to talk about this. And what's great is the
Speaker 3: female customer is already naturally so much better at talking
Speaker 3: about it. So doing this together with our team has
Speaker 3: been really, really helpful and powerful. So what I'm most
Speaker 3: excited about for the next ten years is to be
Speaker 3: able to supercharge that and so we've got some big
Speaker 3: exciting plans in terms of how we're going to do that,
Speaker 3: how we're going to bring that to the market. And
Speaker 3: some of the unique things that we think about about
Speaker 3: being a wellness company. First, that just happens to sell clothes.
Speaker 5: Wow, was that in your ethos from the very beginning
Speaker 5: or did that happen? Did that kind of transition happen
Speaker 5: over the pandemic? And you've spoken to us recently at
Speaker 5: length about the challenges that the company face that, yeah,
Speaker 5: you guys face during the pandemic.
Speaker 3: Yeah, it has been part of the DNA from the beginning.
Speaker 3: I think during the pandemic we were able to crystallize
Speaker 3: what that mission was and part of it was having
Speaker 3: my own crisis going through some of that with the pandemic.
Speaker 3: But we have always believed that wellness is much more
Speaker 3: than esthetic physical fitness, which is really where I think
Speaker 3: most of these brands focus on with a hyper level
Speaker 3: of focus on professional athlete endorsements. We just love this
Speaker 3: idea that teaching people how to take care of themselves
Speaker 3: is the best way to feel good, and part of
Speaker 3: that is having a uniform that you feel excited and energized,
Speaker 3: but also enabling and empowering the conversation. We've posted hundreds
Speaker 3: of these events that we call minded Muscle events, which
Speaker 3: are twenty five minute body weight workouts followed by a
Speaker 3: group discussion, which is really like a group therapy conversation,
Speaker 3: and that format exists in Alcoholics Anonymous, it exists in
Speaker 3: a number of different formats, but it's been so successful
Speaker 3: in men's and we've had like groundbreaking moments with so
Speaker 3: many guys and it just enables them to feel comfortable
Speaker 3: talking about these things. It's like, my it's my passion,
Speaker 3: Like that's the thing that gets me the most excited.
Speaker 3: And yes, I think we make the best clothes in
Speaker 3: our category and the best clothes in our market. That
Speaker 3: enables us to have a megaphone. And so we've got
Speaker 3: to grow the size of our megaphone to have the
Speaker 3: level of impact that we want. But our growth goal
Speaker 3: is to be a billion dollar revenue business and impact
Speaker 3: one hundred million lives through our education.
Speaker 2: It's fascinating to hear you say, like thinking of yourself.
Speaker 2: I mean, like you said, it's from the beginning, but
Speaker 2: as a wellness company kind of with clothes attached, if
Speaker 2: you will, how else do you I mean, is it
Speaker 2: a case that there are other offerings Nate, that you
Speaker 2: eventually offered to your customers.
Speaker 3: Even more so, that's the goal. From the beginning, we
Speaker 3: had an online journal that we called The Pursuit, which
Speaker 3: focused a lot on this bringing world class experts to
Speaker 3: the table sharing that content. But what we found is
Speaker 3: that this idea of you guys are in the content business,
Speaker 3: you know how hard it is, and so we were
Speaker 3: competing against advertised driven content engines and this was like
Speaker 3: something that we were doing on the site. So now
Speaker 3: we've taken that back in house and figured out how
Speaker 3: to do this in a way that we think is
Speaker 3: sustainable and meeting the customer where they're at in the
Speaker 3: form of video content and social first content versus written content,
Speaker 3: and then also live events and doing leaning more into
Speaker 3: that that I think will be really powerful.
Speaker 5: Can you give us an update on retail locations, because
Speaker 5: one thing that we talked about with you last time
Speaker 5: you were here was growth of retail in a time
Speaker 5: when we're seeing other companies pull back. Yeah, and I'm
Speaker 5: wondering how aggressive you're being this year when it comes
Speaker 5: to that retail footprint and what portion right now comes
Speaker 5: from e commerce versus those brick and mortars.
Speaker 3: Retail has been our fastest growing channel the last two
Speaker 3: years on a percent basis, and I think it's a
Speaker 3: channel we certainly believe in. We are slowing that down
Speaker 3: this year because of the women's launch. As you can imagine,
Speaker 3: it changes the layout of the store, the size of
Speaker 3: the store, the mannequins, the hangars, the training of the staff,
Speaker 3: the selection of the staff, like there's just so many considerations,
Speaker 3: so we kind of want to absorb and.
Speaker 2: Because every store has to have a retrofit.
Speaker 3: Right exactly, so we're retrofitting all fifteen stores. We've kind
Speaker 3: of done that work, brought in the right people from
Speaker 3: a visual merchandising standpoint, but our store plan going forward
Speaker 3: is as aggressive as it was in twenty twenty three,
Speaker 3: and we think that these stores are really important, especially
Speaker 3: for our brand message, because you have to meet people
Speaker 3: where they are and meeting people in person and physically.
Speaker 3: We've all learned the importance of that over the last
Speaker 3: several years. So we're leaning into that and doing it
Speaker 3: the right way. We're going to be highly selective. There
Speaker 3: are certainly a lot of brands in our space that,
Speaker 3: because of their capital stack and what they need to achieve,
Speaker 3: they're juicing their revenue numbers by opening as many stores
Speaker 3: as possible. And in some cases over pain for real estate,
Speaker 3: which is going to be tough in three to five
Speaker 3: years when those those rates, you know, don't justify the
Speaker 3: sales figures. We're not taking that tactic. We're being really thoughtful,
Speaker 3: but we're going to you know, our store account will
Speaker 3: be more than two x by twenty twenty six.
Speaker 2: Forgive me, and I should know this wholesale you guys
Speaker 2: don't want.
Speaker 3: We do have some wholesale here. Yeah, We've got some
Speaker 3: great partners in the market. We have a high focus
Speaker 3: on specialty accounts, green grass accounts. You know, we're in
Speaker 3: some of the best golf and country.
Speaker 4: Club productive for you guys.
Speaker 3: Or is it absolutely Yeah. I think it's a great
Speaker 3: business model. You can get carried away when you're driven
Speaker 3: when your wholesale account is driven by majors. For us,
Speaker 3: it's been about twenty percent of the business the last
Speaker 3: two years, so it's it's small.
Speaker 4: Equinox was an early partner.
Speaker 3: A partner is still a partner, and uh, and you know,
Speaker 3: we love that type of account because generally if you
Speaker 3: walk into an Equinox and you buy shorts, it's because
Speaker 3: you forgot Nobody's like, hey, you know what I'm gonna
Speaker 3: go have that be my retail experience or I would
Speaker 3: say that's the minority, But you just do it. It's
Speaker 3: perfect and it's a great way for people to discover
Speaker 3: the brand and the product.
Speaker 4: You want to use the gym owner shorts.
Speaker 3: So kids, Yeah, I won't say never. My wife's been
Speaker 3: begging for that from the beginning. But I think she'll
Speaker 3: I think she'll give me a minute.
Speaker 5: Because just to clarify, you have kids already, you're talking
Speaker 5: about a kid's line.
Speaker 3: Yeah, kid's line. Okay, yeah, fair, fair, thanks Tom. Yeah,
Speaker 3: but but yeah, so you never know. But I I
Speaker 3: prize my wife on the day that we launched, and
Speaker 3: I had just flown in from Asia. I arrived at
Speaker 3: three am. I set up a room in our house
Speaker 3: with every single one of the products for her, and
Speaker 3: then I brought her in a surprise her. And so
Speaker 3: I think she'll give me. I think she'll give me
Speaker 3: a year off before bothering me a rout kids.
Speaker 2: Again, well done, well done, Thank you, Nate. Always great
Speaker 2: to check in with you. Good luck with it.
Speaker 3: Thank you, thank you guys, thanks for having me. Nate
Speaker 3: check it.
Speaker 2: He's co founder and CEO of Rown, joining us here
Speaker 2: in studio. All right, everybody, you've been listening and watching
Speaker 2: Bloomberg Business Week, Carol Masser, Tim Stenevik, and this is
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