Forget about the doom-and-gloom projections that women’s retail is boring, merchandising is dead, and Forever 21 killed the category.
None of that figures into the outlook of a fast-growing, contemporary apparel company in Irvine, where three apparel industry veterans have two years of growth under their collective belt and remain excited about their company’s prospects.
Z Supply Inc. now has 22 employees and about 1,000 retail accounts. It’s looking to finish this year with sales of between $12 million and $15 million, and projects it will nearly double revenue in 2015.
The fashion-driven contemporary segment of women’s apparel is fiercely competitive these days, but it’s one co-owner Greg Garrett said he and his partners knew they wanted to get into from the start.
“That’s where the [women’s] business is today,” he said. “It really is in the contemporary.”
The founders don’t see established brands or the fast-fashion factor as roadblocks to their growth.
“[Forever 21] makes us think,” Garrett said. “You have to be creative if you’re going to compete with these people. You have to keep outthinking them. This is fun.”
Z Supply has four brands: White Crow, Black Swan, Others Follow and its namesake basics line.
Early Days
Glen Reder decided to start the company two years ago, pulling in Garrett, an industry veteran who helped grow 1990s surfwear brand Gotcha to a $200 million business that helped shape the action-sports industry. The two had worked together about 20 years earlier on a clothing line.
They were joined by John Zhao, who owns a factory in China that makes Z Supply merchandise.
“It sounded good to me—it sounded like a dream,” Garrett said. “It’s just easier to do a startup that way. When you start early on, your cuts are going to be small. You have to deal with a factory that’s going to do them for you, and having a partner that has a controlling interest in a factory just makes it a lot easier. It gives you a lot more opportunity.”
The company launched with Black Swan, White Crow and Others Follow, targeting a different customer with each brand.
Others Follow skews the youngest, in the 16-to-21-year-old range, with beach-inspired looks sold in retailers such as Tilly’s and Hobie at prices ranging from $24 to $60.
White Crow, aimed at 21- to 28-year-olds, is focused on college-age girls or young moms, and offers what Garrett described as an edgier look that can function for day and night. Pricing starts at $38 and runs into the $80s.
And then there’s Black Swan, with prices starting at $48. It’s aimed at 28-year-olds and older, with retail accounts that include Nordstrom.
Crucial Clarity
Clearly defining the customer for each brand was crucial to avoid retailers and customers lumping the three together, said Marketing Director Beatrice Rosu.
“We didn’t want crossover, so we really tried to keep it three different looks [and] three different girls that hit different markets,” she said.
The company largely focuses its retail strategy on specialty retailers and boutiques and higher-end department stores such as Nordstrom, foregoing familiar midmarket names such as Macy’s.
The goal now is to sell more than one of its brands to its lineup of specialty and independent shops.
“A boutique carries lots of brands,” Garrett said. “Years ago, Roxy could dominate a store. Espirit could dominate a store. In this day and age, the small retailer really wants to have a variety of product. So what we do is we hit different age groups here [in boutiques]. … They have all different customers that shop in there. So they’ll have a younger girl come in with mom. Now they have something to sell them both.”
The company’s namesake line, Z Supply, covers basics and started about a year after its three contemporary labels. It competes against high-end basics brands such as Michael Stars.
The company’s first three brands are meant to appeal to distinct customers, but the basics line spans age segments and has grown rapidly, despite just recently being shipped out for the first time.
“I’ve only shipped one season, and we sold out twice,” Garrett said. “It’s a monster. So I predict next year, this will be probably one of our biggest lines.”
The line started with 18 pieces and has expanded to 35, including dresses.
Footwear
The company got into the footwear business earlier this year, taking a minority stake in the shoe startup Rowan Reed. But it quickly ducked out of the business a few months later once the partners realized the growth potential of the basics line.
“It was just taking way too much of my time, and I decided that with the way we’re growing in this, I just couldn’t do both, and I’d rather back out early,” Garrett said.
He added that footwear took him “far from what I’m used to. I don’t know anything about the footwear business, to be honest, and we got into it and I realized, ‘My God, what a learning curve this is.’ ”
For now, the focus will continue to be on women’s apparel.
Company executives don’t foresee getting into menswear, Garrett said. “Guys don’t shop.”
“And there’s not many men’s retailers,” Reder said.
Garrett said department stores, with their sizable men’s departments, don’t do enough to draw customers in, calling the familiar retailers dinosaurs.
“When you go shopping, you want to be entertained,” he said. “Why did Forever 21 come out so strong? They created this environment, this experience.”
It all loops back to why the trio got into women’s apparel from the start.
“You get immediate excitement, especially when you ship something and it sells and it’s good,” Garrett said. “Everyone wants to wear it. It becomes immediate gratification.”
