Speaker 1: This is Bloomberg Business Week with Carol Messer and Tim
Speaker 1: Stenebek on Bloomberg Radio.
Speaker 2: Well, our audience knows our next guest very well. He's
Speaker 2: been joining our program for years.
Speaker 3: I know you.
Speaker 2: We were talking about it as we were getting ready.
Speaker 4: I went deep into the terminal.
Speaker 2: Carol like, just search on my name and put in
Speaker 2: Nate's name, and.
Speaker 1: You'll say, and Carol, just you know, she leans over
Speaker 1: me and starts typing into the terminal. She's like, I
Speaker 1: search on my name all the time.
Speaker 4: No, she didn't really do that.
Speaker 1: I did find though. He was on with you and
Speaker 1: Mike McKee. Mike McKee, Okay, the show was called taking
Speaker 1: Stock Back in twenty fourteen. That was the year they
Speaker 1: actually launched Roan.
Speaker 5: That was the first year.
Speaker 4: That was the first So he's been here since the beginning.
Speaker 2: Nateateek, it's of course, co founder and CEO of Roan
Speaker 2: joining us now.
Speaker 3: Welcome, Welcome, welcome back.
Speaker 5: Thank you so much. I feel I feel as close
Speaker 5: to being at home on air here than anywhere else.
Speaker 2: Well, likewise, we feel like you're part of the family,
Speaker 2: and we're so glad to have you back. It's been
Speaker 2: I feel like a big year for you guys, really
Speaker 2: big year.
Speaker 5: I've been big month in particular, a lot of a
Speaker 5: lot of exciting thing's happening.
Speaker 2: Can we talk though, about the billionaire Blackstone executive David Blitzer,
Speaker 2: former hedge fund manager Gabe Plokin, ex football stars Tim Tebow,
Speaker 2: Steve Young.
Speaker 3: They did a deal and they're now involved in the company.
Speaker 5: Yeah, it's so the quick story is.
Speaker 3: A year ago, right, July twenty.
Speaker 5: So we just announced it, but this happened July of
Speaker 5: last year, and effectively what happened is we put a
Speaker 5: group together in an SPV with really exciting names, a
Speaker 5: bunch of kurrent and retired athletes as well as just
Speaker 5: incredible people like Blitzer and Gabe, and we bought out
Speaker 5: the private equity interest in our business so that we
Speaker 5: can really think about the business in a more long
Speaker 5: term way.
Speaker 1: What was it that the private equity firm wanted to
Speaker 1: do that you weren't ready to do?
Speaker 4: It?
Speaker 5: Really wasn't. They weren't pushing us to do anything. But
Speaker 5: the nature of private equity is a five to seven
Speaker 5: year whole time, and we were in we were coming
Speaker 5: into year five and they're great partners. In fact, that
Speaker 5: we're talking about el Ca Caterton, the managing partner of
Speaker 5: their growth fund, is still on our board. Even though
Speaker 5: they sold their interest. That was part of something that
Speaker 5: I really wanted as part of the deal and they
Speaker 5: you know, I just was kind of forecasting the future macroeconomically,
Speaker 5: time of uncertainty if they wanted us to sell the
Speaker 5: business and it wasn't right for us. So and more
Speaker 5: than anything, I kind of fell back in love with
Speaker 5: the brand and the company, and I thought I kind
Speaker 5: of want to do this maybe for thirty forty years,
Speaker 5: not five years.
Speaker 3: Why had you fallen maybe out of love a little bit.
Speaker 5: Well, the pandemic was a really stressful time, you know, not.
Speaker 3: Just your statement.
Speaker 5: Yeah, yeah, it was a stressful time for every business,
Speaker 5: every person, but certainly I think for me as a
Speaker 5: leader of a company, it felt like there was a
Speaker 5: new crisis every single week and we had some growing
Speaker 5: up to do. You know. The business still grew tremendously
Speaker 5: during that time. In fact, it was great for businesses
Speaker 5: like ours, but it really wrung me out, and I
Speaker 5: think I was at a point where, you know, just
Speaker 5: we talk a lot about mental health in our company,
Speaker 5: I was at a breaking point, and I like, I
Speaker 5: either need to sell this company or something needs to change.
Speaker 5: And for me, the thing that needed to change is
Speaker 5: I needed to feel almost more invested in it and
Speaker 5: I need to make some changes.
Speaker 2: I've heard of quote I just want to where you said,
Speaker 2: I think after this and kind of getting back control,
Speaker 2: nothing has changed and everything has changed, Yeah, which kind
Speaker 2: of says so much.
Speaker 5: Yeah, it's really exactly how I feel. Even though conceptually,
Speaker 5: you know, el Caderton was a minority shareholder in the business,
Speaker 5: so in theory their ownership change to a new group
Speaker 5: didn't change anything, but the way I feel has changed completely.
Speaker 4: Do you feel more in control?
Speaker 5: Absolutely? Yeah.
Speaker 4: And I have a controlling stake in the company.
Speaker 5: Yes. So you know, we call it because my brother
Speaker 5: is involved. I've got a brother in law, so we've
Speaker 5: got family control of the business and the goal is
Speaker 5: to have a long term hold here.
Speaker 3: Dad's involved.
Speaker 5: Well, that was one of the most exciting parts about this.
Speaker 5: I called him. You know, my parents have spent three
Speaker 5: years in London doing service and came back and I said, hey,
Speaker 5: I have this crazy idea. What do you think about this?
Speaker 5: And you know, he's an incredibly experienced executive and he said,
Speaker 5: I love it. What can I do to help? So
Speaker 5: we added him to the board and it's been a dream.
Speaker 5: I've told people, Look, there are people who are going
Speaker 5: to say, oh, you know, you're working with your dad
Speaker 5: and I all I do is I forecast twenty years
Speaker 5: in the future, and I think if I could, if
Speaker 5: I didn't take this opportunity, I would regret it for
Speaker 5: the rest of my life. And I get a chance
Speaker 5: to I get a chance to work with him and
Speaker 5: you know, and have that family relationship. It's incredibly unique
Speaker 5: and special.
Speaker 3: Yeah, no doubt about it.
Speaker 5: Right.
Speaker 3: We only get to do this once. Yeah, right, got
Speaker 3: to figure out how you want to do it.
Speaker 2: Well, not investors though, in the sports world yep. So
Speaker 2: how are you then, maybe thinking about you know, we
Speaker 2: talk often about branding and partnerships and especially with athletes.
Speaker 2: How are you guys thinking about that as part of
Speaker 2: the strategy, the growth strategy going forward?
Speaker 5: Well, it's interesting our brand launched as an active brand,
Speaker 5: so we were carried in Equinox and Peloton and Soul
Speaker 5: Cycle and Barry's boot Camp in places like that, and
Speaker 5: then we added in our commuter lane. I'm wearing a
Speaker 5: full commuter shirt and a commuter you know, commuter the
Speaker 5: computer and it's been an incredible part of our business.
Speaker 5: But active is at our roots. That's how we still
Speaker 5: see ourselves as a performance brand. So the sports partnerships,
Speaker 5: the athlete partnerships, is something that we're planning to lean
Speaker 5: into more as part of this. We have seven professional
Speaker 5: sports team owners on the cap table. We have the NFL, NBA,
Speaker 5: Major League Baseball, Major League Soccer, English Premier League all
Speaker 5: represented across the ownership group, and that's that's a great
Speaker 5: opportunity for us.
Speaker 3: And a great revenue mover.
Speaker 2: Eventually, could you see yourself doing lines around an athlete.
Speaker 5: I certainly think there would be collections and collaborations in
Speaker 5: the future. Yeah.
Speaker 1: What's the bricks and mortar strategy right now?
Speaker 5: So we've opened eleven stores in the last twelve months,
Speaker 5: so we have we have fifteen source total. Now I thought, yeah,
Speaker 5: it's it is certainly not for us in our stores
Speaker 5: are all profitable. The payback period has been incredibly quick
Speaker 5: on these stores and what they do for us in
Speaker 5: a market. We can measure the e comm impact and
Speaker 5: the awareness impact when we open a new store, So
Speaker 5: I think it's getting more competitive though. Every brand is
Speaker 5: trying to open retail, So there, you know, there was
Speaker 5: kind of a window of opportunity. I think that window
Speaker 5: is starting to close. Also, you know what's happening macroeconomically,
Speaker 5: that may shift over time. But online digital acquisition costs
Speaker 5: have been growing at such an increasing rate everybody's playing
Speaker 5: in that space that it became really expensive to acquire
Speaker 5: companies online. Now you now you can acquire companies or
Speaker 5: customers the old fashioned way through retail and make money
Speaker 5: as you're acquiring them. How do you how do you
Speaker 5: track that the eCOM left?
Speaker 4: Yeah, how do your yeah? Exactly?
Speaker 1: How do you know that what's happening in the store
Speaker 1: outside of a store will lead to a sale online?
Speaker 5: So we have a baseline of data in every single
Speaker 5: market that be tracked by a zip code. Right and
Speaker 5: after you open a store, there's a thirty day measurement,
Speaker 5: a three month measurement, a six month measurement, and a
Speaker 5: year long measurement. And you try and see did the
Speaker 5: baseline of e comm rise since the store opening? Is
Speaker 5: it complete direct correlation? Hard to know because the brand's
Speaker 5: also growing, But if you if you then minus overall
Speaker 5: brand growth did the market grow at an above rate
Speaker 5: of the standard growth rate? And that's kind of how
Speaker 5: we think about measuring it.
Speaker 2: I am always curious about like a product line or
Speaker 2: a brand because I think sometimes you can grow too
Speaker 2: fast in terms of the stuff you offer that it
Speaker 2: just gets overwhelming.
Speaker 3: So how do you think about how you.
Speaker 2: Kind of, you know, cultivate that or curate that so
Speaker 2: that you don't kind of overwhelm the consumer.
Speaker 5: It's tricky because the customer has given us such opportunity
Speaker 5: to do so many things, as we've introduced commuter and
Speaker 5: we have we have to guard ourselves a little bit
Speaker 5: against it. But right now we say we really can
Speaker 5: outfit about eighty percent of a guy's closet. And not
Speaker 5: a single day passed in the pandemic where I didn't
Speaker 5: get a text from somebody saying I've realized all I've
Speaker 5: worn for the last six months is Roan. I walked
Speaker 5: in today and our friend Jason Kelly's like, I didn't
Speaker 5: know you were coming, and I'm top to bottom, so
Speaker 5: it's kind of top to bottom. Yeah, So we're really
Speaker 5: lucky that we've got diehard customers and they really wear
Speaker 5: the brand in multiple settings we've.
Speaker 2: Got to take a commercial break, but we know that
Speaker 2: finally you're doing something for the better half.
Speaker 5: Yes, absolutely, the better half.
Speaker 2: So we want to talk about that and your offerings
Speaker 2: and just kind of where growth goes from here, because
Speaker 2: it sounds like going public.
Speaker 3: Should we wait to talk about that.
Speaker 5: Let's talk post commercial break about that.
Speaker 3: We are here with Nate Check.
Speaker 2: It's Ron co founder and CEO with us in our
Speaker 2: Bloomberg Interactive Broker studio. I'm only going to ask this
Speaker 2: because we are focused on the labor market right now
Speaker 2: with all the data points coming, are you getting all
Speaker 2: the workers you want?
Speaker 5: Yeah? I mean we've been lucky. We've always paid above
Speaker 5: market for retail in particular, that was the toughest piece,
Speaker 5: you know, as we've scaled the But it's so critical
Speaker 5: to have good people in your stores. It makes all
Speaker 5: the difference. If a store is not performing well and
Speaker 5: you put the right person in, it will just completely
Speaker 5: transform how the store performs. So we've been fortunate that
Speaker 5: we've been able to attract really good talent.
Speaker 2: Speaking of those stores, they're going to start selling women's
Speaker 2: stuff finally.
Speaker 5: Even every interview at the end either, Yeah, So when's
Speaker 5: it happening. So this coming May, we will be launching
Speaker 5: women's and it's incredibly exciting. It's been a long time
Speaker 5: in the works. You know, we've started. We started as
Speaker 5: a men's brand. We did a women's capsule in twenty
Speaker 5: nineteen and it went so well, it sold out. But
Speaker 5: you go into twenty twenty and do you want to
Speaker 5: take the inventory risk and continue to lean into it.
Speaker 5: But we brought an incredible chief product officer who is
Speaker 5: really the most talented fabric person I've ever worked with,
Speaker 5: and she has put together an incredible initial collection. It's
Speaker 5: been received so well as we've taken it to market
Speaker 5: and introduced it to wear testers. And part of the
Speaker 5: big story of Roan is that we added three very
Speaker 5: talented female executives over the last three years and they've
Speaker 5: been a big part of our success. And seventy percent
Speaker 5: of our team is female. So we wanted to build
Speaker 5: a collection that they were proud and excited to wear,
Speaker 5: and I basically just tried to get out of the
Speaker 5: way intentional hiring women. I would say we hired the
Speaker 5: absolute best people for the position, and they happened to
Speaker 5: be women. I think we have always believed in building
Speaker 5: a diverse and strong team, and we needed that at
Speaker 5: every level. We've just added a female board director named
Speaker 5: Tess Roaring, who's incredibly talented. But we always try and
Speaker 5: hire the best person for the job, and the best
Speaker 5: for the job for these jobs were the women that
Speaker 5: we hired.
Speaker 4: I talked to us about financials.
Speaker 3: You guys have said publicly, are you going to do
Speaker 3: a commuter suit for women?
Speaker 5: I can't reveal new collections on.
Speaker 4: How they're waiting numbers.
Speaker 2: I know you're going to be bluebarg as we should be,
Speaker 2: but I'm just okay.
Speaker 1: So one hundred million dollar annual run rate profitable last
Speaker 1: three years, yep. What else can you tell us?
Speaker 5: Well, the company's growing twice as fast since we did
Speaker 5: this transaction than we did, you know, than we were
Speaker 5: growing before.
Speaker 3: And better environment or what.
Speaker 5: I would say. It's actually probably a harder environment. Most
Speaker 5: of the brands in our space are flat down quite significantly.
Speaker 5: This year. We've opened eleven stores, as I mentioned, in
Speaker 5: the last twelve months. There's been strong growth in a
Speaker 5: couple of our categories. We have some product lines that
Speaker 5: are growing at north of three hundred percent this year.
Speaker 5: So we feel really good about where the business is today,
Speaker 5: and we you know, we have a lot of conviction
Speaker 5: that we can continue to grow in scale. It's not
Speaker 5: not easy, but we're excited. All right.
Speaker 1: We got a little bit of a lightning round.
Speaker 5: I don't think this has ever happened before the first time.
Speaker 1: Okay, you don't have to answer in a lightning way,
Speaker 1: because some of these are longer answers. Okay, work life balance,
Speaker 1: we talk a lot about work life balance. You share
Speaker 1: so much of your life on Instagram. I followed you
Speaker 1: for years. You have family, kids. Is work life balance
Speaker 1: and illusion?
Speaker 5: Yes it is. I mean, I don't even like the
Speaker 5: word balance. I think it's a I think it's the
Speaker 5: wrong term. And I think I've grown as I've thought
Speaker 5: more about this. I really love I can't remember where
Speaker 5: I heard this. I love the word harmony because in theory,
Speaker 5: when you're doing it right, your work should help you
Speaker 5: at home and your home should help you at work.
Speaker 5: And you know that the balance makes it feel like
Speaker 5: there should be a bucket of each and you need
Speaker 5: to make them equal or a certain proportion, and harmony
Speaker 5: shows you how they can really influence each other. And
Speaker 5: for me, becoming a better leader in the workplace. Being
Speaker 5: more thoughtful and sensitive, how I approach conversations, how we
Speaker 5: think about long term planning has for sure made me
Speaker 5: a better parent and I hope a better partner.
Speaker 3: Do where to go?
Speaker 2: Okay, this is back to kind of hardcore business.
Speaker 3: What prompts men to buy activewear these days? Has anything changed?
Speaker 2: What gets their own target demo to pull out the
Speaker 2: plastic and buy?
Speaker 5: Yeah? What's really exciting is I think that the shift
Speaker 5: during COVID, where I think in particular, we saw a
Speaker 5: shift for men to start taking better care of themselves,
Speaker 5: to allow themselves to take better care of themselves. That
Speaker 5: I think has continued and I hope never goes back.
Speaker 5: It's really important. And so you know, there's a lot
Speaker 5: of different modalities. It could be yoga, it could be running,
Speaker 5: it could be cycling. But most of our customers do
Speaker 5: a balance of all of those.
Speaker 2: You talked about the athletic side of the business. Is
Speaker 2: that still the big chunk of the business.
Speaker 5: It's pretty equal at this point in our commuter lines. Yeah,
Speaker 5: there are a lot of customers who only know us
Speaker 5: for our commuter line.
Speaker 3: Wow, what's more profitable?
Speaker 5: I would say our commuter line is more profitable. It's
Speaker 5: a higher price point.
Speaker 1: Okay, Okay, So when you told us earlier that covid
Speaker 1: was really challenging, Yeah, was that as challenging as the
Speaker 1: first couple of years of just getting the brand off
Speaker 1: the ground and like knocking on doors and getting Peloton
Speaker 1: and Equinox and barriers to carry this stuff.
Speaker 5: It was more challenging for me, it was. There's no
Speaker 5: question it was more challenging. In the beginning. You're so
Speaker 5: excited and you've got nothing to lose, right, So you're
Speaker 5: kind of trying to build this business from scratch, and
Speaker 5: if you lose it, you know, no harm, no FAULI it,
Speaker 5: it doesn't it's not worth anything at that point. But
Speaker 5: then as it grows, there's more pressure. There's more people,
Speaker 5: you know, and I care so deeply about how our
Speaker 5: team feels about work and and so the pandemic was
Speaker 5: hard again on so many people and so many families.
Speaker 5: I just felt that weight all the time, and I
Speaker 5: didn't know how to relieve it. So for me, it
Speaker 5: was harder.
Speaker 2: Last question, right, Yeah, if everything goes according to plan,
Speaker 2: Ron will fill in the blank.
Speaker 5: Ron will have a massive impact on the mental health
Speaker 5: in this country.
Speaker 3: Wow.
Speaker 4: We have we do have one minute left. Oh huh yeah.
Speaker 1: Mental health okay, personally yeah, how did you get past
Speaker 1: that hump that you faced during the pandemic.
Speaker 5: Well, I think a big part of it for me
Speaker 5: was building a toolkit and understanding how to deal with
Speaker 5: those challenges because these things tend to catch us unaware,
Speaker 5: you know, anxiety, depression. You can't fully prepare for them,
Speaker 5: but you can build a toolkit to know how to
Speaker 5: address it when you feel that way. And there's a
Speaker 5: number of things that I do, but motion exercise. I
Speaker 5: got really into contrast therapy, cold plunging saunas, and social connection,
Speaker 5: intentionally seeking out. It's hard to build friends, you know,
Speaker 5: as you age, but getting yourself uncomfortable makes a big difference.
Speaker 3: Well, you've definitely made a big difference.
Speaker 2: You can tell in what you're doing in the last year,
Speaker 2: and you can tell how much you're enjoying it.
Speaker 3: So looking forward to the next.
Speaker 2: Ten years, oh at least twenty years, thirty years, be
Speaker 2: welcome back soon, Thank you always welcome of course. Nate
Speaker 2: check It's co founder and CEO of Ron joining us
Speaker 2: in studio. If you missed any of that conversation, be
Speaker 2: sure to check out our podcast feed and we'll be
Speaker 2: sure to highlight it to in our weekend So you
Speaker 2: are listening and watching Woodberg Radio