Bruce Fetter took over the reins at St. John Knits International Inc. with a new challenge for the American luxury house: connecting with the modern woman on the rise.
Upping the marketing efforts might have been the expected route for the veteran of the label that’s long been a favorite among female power players—a list that includes First Lady Michelle Obama, former Hewlett-Packard Co. Chief Executive Carly Fiorina, and “Good Morning America” co-anchor Robin Roberts.
Fetter instead set out a new design direction that appeals to “a much broader audience than what people may have expected from us.”
“It’s one thing to say we are modern, we are relevant,” Fetter said during a recent interview at St. John’s headquarters in Irvine. “It’s another thing to be modern and relevant. So you have to ensure that you are. In this past year, my No. 1 focus was strengthening our design team so that we were delivering on that kind of challenge.”
St. John’s senior vice president of design, Greg Myler, who’s been with the brand for nearly a decade, is now working with “two new designers with strong pedigrees.” Tamar Magnes—who hails from Oscar de la Renta and Carolina Herrera New York—is the new vice president of design in charge of evening collections. Design Director Angella So, who joined the company after stints with Ann Taylor and Anthropologie, is focusing on a casual lifestyle line.
The design team has seen its creations on the red carpets leading to the Metropolitan Museum of Art’s Gala, the 67th Annual Primetime Emmys, and the Country Music Association Awards, among other festivities, worn by actresses Sofia Vergara and Viola Davis, “Grey’s Anatomy” Executive Producer Shonda Rhimes, singer Kacey Musgraves and model Chrissy Teigen.
“If we can be at events, and they are talking about St. John in the same breath they are talking about Oscar (de la Renta) or whoever it is—that’s important, it gets the story out there,” Fetter said. “I don’t think anyone looked better at the [Emmy Awards] than Sofia in that dress. It was one of the top picks by everybody.”
Local Luxe
Magnes and So’s creative palettes had room to expand at St. John, a “design-driven company” that makes and dyes its own yarn as the starting point for a vertical integration process. The yarns become knit materials in Irvine, also home to the label’s cutting and sewing operations, which produces separates and suits that can range from a few hundred dollars to several thousand.
“It’s all about controlling quality and also managing lead times,” Fetter said. “If we can control all of that, then we can control our own destiny. And also from a creativity standpoint—our designers have to have options that other people don’t have.”
St. John’s vertical integration started with Marie Gray, who co-founded the company with husband, Robert, in 1962. She was looking for colors that yarn suppliers didn’t have, so the couple set up a dye house to create their own—including St. John’s signature “caviar black.” (See graphic, this page).
Evolution
St. John employs about 400 in Irvine and another 600 at a plant in Tijuana that turns out buttons and hardware for garments. The brand’s sales are down substantially from its peak about a decade ago, according to industry sources. It has 230 retail outlets globally, including Neiman Marcus, Saks Fifth Avenue and Nordstrom department stores. It operates 35 boutiques and 20 outlet stores of its own.
These days the business is “growing and profitable,” according to Fetter, a 13-year veteran of the company.
He first joined the brand in 1997, serving as co-president and co-chief executive with the founders’ daughter, Kelly Gray, until 2005. St. John was then owned by Escada AG of Germany, which paid the Grays $45 million for an 83.5% stake in 1989 and took the company public in 1993. New York-based private equity firm Vestar Capital Partners acquired a majority stake in the brand in a 1999 deal that pegged St. John’s value at $522 million and took it private.
Fetter rejoined St. John in 2007 as president and chief operating officer, a post he kept until 2011. Shanghai-based investment firm Fosun International Ltd. picked up a 33.3% stake in St. John for $55 million in late 2013.
Fetter’s third round at the OC luxury label was prompted by then-Chief Executive Geoffroy van Raemdonck’s departure to Ralph Lauren. Executive Chairman Bernd Beetz served as interim chief executive until Fetter came back in January 2015.
Next Steps
Fetter’s team, after getting “the product right,” focused on telling the St. John story via marketing campaigns, social media and hosting of conversations with “exceptional women” at its boutiques.
The brand also launched its e-commerce site in October, a tool to broaden its customer base as much as it’s another sales channel.
“I think anybody that’s not doing e-commerce—and we were kind of late to the game—is making a big mistake, because the world is moving in that direction,” Fetter said.
He said St. John customers don’t necessarily make a purchase online, but many do their research there.
“I may come to the store less often, but when I come I’m ready, I know what I want, I saw it online, and now I want to try it on.” he said. “E-commerce is a critical foundation piece for us. We look at every person who is buying and what is our relationship to them. Are they buying from that boutique in Beverly Hills or Dallas—and, if yes, that’s great, we love that. If she doesn’t have a relationship with us, we’ll start to develop a relationship—it may be electronically because that may all she’s available for, but we are not at all averse to introducing her to that great sales person—Barb in Denver—so we are trying to tie all those pieces together.”
The customer data gathered from stjohnknits.com supports Fetter’s vision for the brand’s digital play.
“We were looking at the age ranges that are shopping on our site, and while they are not completely exact, we see our core customer, and we also see sort of a younger mindset starting to represent a good proportion of the sales volume,” said Tiffany Anastasakis, senior vice president of marketing and communications.
St. John is busy on the brick-and-mortar side, too, with plans to open two to three boutiques a year. It’s eyeing Washington, D.C., because of “its dense population of powerful women dressing for success,” Fetter said.
“We always had a nice wholesale business there but did not have our own store,” he said. “There’s also a shopping center in New Jersey under development that we’ll jump into.”
International expansion also is on the radar.
St. John is talking to a “major specialty store in the U.K.,” Fetter said, declining to provide specifics but calling it “one of the four big guys and somebody that we’ve wanted to do business with. They’ve seen the success we had at Harrods, and now they ‘want to get on that train.’”
The company last year took back its business in China from Heiman, which had operated seven St. John boutiques under a 10-year license.
“They represented the brand really well, but we felt that this is an important market and probably better run by us,” he said.
Fetter’s first year back was “about getting the design team in place, making sure we are accomplishing what we want to accomplish—you don’t get everything right the first time, so each collection is getting stronger,” he said.
Looking ahead, “we have to be careful so we don’t get so caught up in the business model that we have … that we do it the way we always did it and we are so arrogant we never thought whether it could be done any differently, more efficiently or more creatively than what we are doing.”
