Caroline Gogolak

Why Some Fashion Brands Never Reach $500M. While Others Soar Past $1B? In the fashion industry, crossing the $500M and $1B sales thresholds represents two critical turning points. But not every brand makes it to these milestones (I witnessed how some brands struggle to even maintain sales levels), and the challenges differ for each group: 📈CHALLENGES FOR FASHION BRANDS BELOW $500M: 1️⃣LACK OF BRAND LOYALTY: Without a loyal customer base, companies struggle to maintain consistent sales. Consumers are bombarded with options and need more than a trendy product—they seek an emotional connection. 2️⃣OPERATIONAL INEFFICIENCIES: Scaling from a niche player to a mid-sized brand requires fine-tuned operations—especially when it comes to supply chain management, production quality, and distribution. 3️⃣UNDERINVESTMENT IN TECHNOLOGY: The digital revolution is transforming fashion, from e-commerce to data analytics. Many smaller brands lack the capital to invest in the right tech to fuel sustainable growth. 4️⃣MARKETING LIMITATIONS: Getting noticed in the fashion world is expensive. Brands under $500M often lack the budget for effective digital campaigns, influencer partnerships, and far more important efficient global reach (one of the most common problems). 📉WHAT DRIVES SUCCESS PAST $1B: 1️⃣GLOBAL MARKET EXPANSION: Brands that cross $1B leverage international markets, tailoring their approach to local cultures and preferences. 2️⃣STRATEGIC PARTNERSHIPS: Collaborating with other brands, tech firms, or even influencers at this level can drive brand visibility and customer acquisition, opening up new revenue streams. 3️⃣INNOVATION AS A CORE VALUE: From sustainability initiatives to embracing AI and virtual fashion, billion-dollar brands prioritize innovation. They lead trends, rather than follow them. 4️⃣OMNICHANNEL MASTERY: Companies that dominate both online and offline channels create seamless customer experiences, leading to higher conversions and customer retention. For those stuck under $500M, the pathway to higher revenue lies in building a scalable global, tech-savvy business model that speaks to today’s consumer demands. For those surpassing $1B, the challenge is staying agile and relevant in a fast-changing industry. #fashion #smartbusiness #growth #innovation #globalvision #management

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🧟‍♀️ It struck me that Modern Retail’s recent article on DTC Zombies references two brands (Feat and Outdoor Voices) situated within the athleisure apparel space. Just as retailers anticipated a permanent shift from in-store shopping to e-commerce after the pandemic it was expected everyone would continue wearing athleisure at the same frequency after lockdowns. 📈 Projecting market demand for athleisure is challenging because it sits in the in-between spaces. Athleisure blurs traditional clothing lines, raising questions: Are hoodies and sweatpants athleisure? What about t-shirts? Is loungewear indoor athleisure or a separate category? Is “Bad Sandy” wearing a leather jacket and leggings at the end of “Grease” athleisure? The definition is fluid, influenced more by styling and usage than by distinct categories. 👗 While many women still wear yoga pants beyond the mat, there’s also a resurgence in tailored bottoms, exemplified by Aritzia’s wide-leg trousers. Dresses and skirts have made a comeback with a return to more careerwear and occasion dressing. Women consumers are embracing a post-pandemic wardrobe era with more distinctive outfitting propositions than 4 years ago. 🧘🏻‍♀️Of the upstart DTC brands described as athleisure in recent years, only Alo Yoga is the major competitive threat to Lulu’s women’s business. Not even Nike or adidas have been able to pull that off with apparel, though they have tried. Alo is smaller in volume than Lulu, but growing 30% YoY with a higher proportion of women’s consumers. Gap Inc. has also successfully evolved Athleta from a catalog business (old-school DTC) into a growing omnichannel concept that exclusively serves women and girls. 🏃🏾‍♀️Lululemon may have popularized leggings as casual wear, but it remains rooted in its athletic heritage, evident in its partnerships with Team Canada at the Olympics. Alo Yoga and Athleta’s very names indicate that activewear is the core of their brand. The latter has even attracted high-profile former Nike athletes Allyson Felix and Simone Biles as brand partners. 🎽 While at first glance DTC athleisure may be seen as a fading opportunity, Lulu Lemon, Alo Yoga, and Athleta are all DTC brands leading in the space. This would suggest that winning in DTC athleisure is less about positioning a brand in the in-between spaces but rather winning with women’s performance apparel. #merchandising #sportswear #athleisure #trends #DTC #fashion

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The new venture, called Authentic Luxury Group, will initially focus on Authentic Brands Group owned luxury and accessible luxury names including: Barneys New York, Judith Leiber Couture, Hervé Léger and Vince. Essentially, the new luxury group plans to serve as an incubator for brand growth through strategic licensing agreements and distribution channels across #fashion, #retail, #digital, #hospitality, #realestate, #art and #travel, according to the joint venture; all related to luxury lifestyle and activities. Perhaps, we are witnessing the emergence of a new luxury powerhouse from the United States, poised to join the ranks of the prestigious luxury conglomerates that dominate the fashion and lifestyle markets from France and Italy. While these European giants have long set the standard, this could signal a shift in the global landscape. Time will reveal if this American contender lead by Authentic Brands Group Jamie Salter & Saks Richard Baker can truly redefine the luxury industry on a global scale (in my personal opinion highly feasible).

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What is game changing about Twig Ventures model? Levi Reed and their team gives *hands on* fractional support for a few months before helping you bring your baby to investors. As a first generation college student, WOC founder, that generous act of service speaks volumes as I've really had to build my network from the ground up and that access to top quality support is PRICELESS! 👉🏽 Investors - fill out their typeform to learn more 👉🏽 Founders - DM their Twig Ventures page on LI directly You rock Levi!

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2023 was a killer year for Footwear brands. Who Popped? Stopped? And dropped? Lace yourselves up. 3 Quick takeaways for the non-scrollers: 1) Rev Multiples: 2x 2) Price to Earning (P/E) Ratio: 33x 3) Was a good year for footwear brands We’re looking at $226B in combined Market cap & $7B in Profits across 13 bizs. How to read the Pop, Stop, and Drop sections (Cap | Net Income (YOY)): - Popped: Net Income increased YoY - Stopped: Net Income dropped YoY - Dropped: Free fallin’ Who Popped 🎉: * Crocs: $8.8B | Made $792m (+47% YoY) * Skechers: $10.4B | Made $545m (+46% YoY) * Deckers Brands (UGG + HOKA): $22B | Made $516m (+14% YoY) * On: $11.1B | Made $79.6m (+25% YoY) They struck the right balance of hitting the cultural moment and controlling costs. All Poppers reduced COGS as a % of Rev = more profits to the bottom line. Keeping OPEX in line allowed them to extract more profits while increasing sales from capturing consumers' desires. Who Stopped ⚠️: * Nike: $104B | Made $5B (-16% YoY) * PUMA Group: $6.8B | Made $388m (-15% YoY) * Steve Madden: $3.1B | Made $173m (-20% YoY) * BIRKENSTOCK: $8.4B | Made $75m (-60% YoY) * ASICS Corporation: $8.6B | Made $19.8m (-43% YoY) These brands had solid topline growth, but came with an OPEX increase generating less profits YoY. This isn’t financial advice… But there’s NO way Asics continues to trade at 400x+ earnings or Birkenstock at 100x+ earnings. I understand future momentum, but Nike trades at 20x. Who Dropped 📉: * adidas: $43B | Lost $15m (-102% YoY) * Wolverine Worldwide: $650m | Lost $39m (+79% YoY) * Allbirds: $97m | Lost $152m (-50% YoY) * Alpargatas S.A.: $6.7B | Lost $370m (-1,793% YoY) All these brands missed the consumer mark. Lack of focus, slower turns, and more discounts have the makings of a death spiral. Allbirds is on the bankruptcy watchlist. Each brand will have to find their way back, for some they won’t make it out alive. All in all, 2023 was a great year to be a Footwear brand. Footwear is one of the hardest types of brands to build. But once you hit success… It’s a powerhouse. Who was the biggest stand out for you? #shopify

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Great post Matt- good to see numbers for Run! The price issue is not all brand margin related, new polymers and processes are really expensive and factories are mostly left to do all development and pre-production as brands lack qualified talent and are mostly staffed by those looking to avoid adding risk or attachable decisions to their daily- to try and keep the desk! Nike’s well chronicled layoffs (also your posts!) have further spooked the industry creative/engineering and Production players! I do not see prices coming down any time soon, due to China avoidance and Vietnam capacity tightening ( plus the political footballs in Cambodia/Myanmar) - so those walls will need to be climbed to grow the category and capture market share from the big brands! Well spotted on womens as the fastest growth market - which will hopefully drive investment capital and we continue to see better technical/well fitting products come to the segment! #mattpowell #runningshoes #femalerunners

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