Kelly and Marie Gray are taking a breather after a whirlwind year that saw their Grayse LLC in Irvine realign its retail strategy to focus on a flock of fledgling brick-and-mortars.
“I think mom and I have been spread very thin over the last year getting four stores up and [running], and we haven’t near fleshed out what our [stores] have at the moment, so I’m looking for growth within each,” said Kelly Gray, whose parents founded St. John Knits in 1962 in Irvine, the luxury knitwear maker she also managed after a 1989 sale to Escada AG.
The Grayse brand debuted in early 2013 at Neiman Marcus and Saks Fifth Avenue and on its website. The brand, however, disappeared from the shelves at high-end department stores as its own retail ambitions materialized.
“We have capacity issues, to be honest,” Kelly Gray said.
About 75% of Grayse’s merchandise is made at its headquarters in Irvine, where the label employs more than 25. “There is so much hand-work,” Gray said. “We have artisans … so there is only so much we can make. Our primary focus for the last year was to fulfill our own needs at retail … and we have opted to work with specialty boutiques across the country in a limited capacity.”
Timing and merchandising also have been points of contention with the big retailers, according to Gray.
“We are a California brand, and we don’t believe in shipping our traditional fall merchandise until closer to the holidays,” she said.
“And on a normal cycle, when you ship [the] fall [collection] early, which a lot of big companies do in July, it goes on markdown right at the holidays, right when [consumers are] ready to buy fall coats. We are a small company, and we really didn’t feel that we would fit in the cycle of the big companies—the Saks and Neimans—and because of this we are very focused on full-price business. [With] our own retail stores we can hold the full price point for longer.
“We felt like we could run the business truly the way we wanted to, and let the customer tell us what was right rather than a buyer [from the department store].”
Grayse’s first retail location opened in November 2014 at the Shops at El Paseo in Palm Desert, where “we are very excited to be experiencing double-digit increases,” Gray said.
A store at the Westfield Topanga mall in the San Fernando Valley of Los Angeles followed in June 2015. Grayse’s debut in Orange County came a few months later at Fashion Island with a 1,400-square-foot space.
It “started out as a pop-up shop, but we have every intention of remaining in Fashion Island,” she said.
Another pop-up store—this one at Newport Beach-based Craig Realty Group’s Citadel Outlets in Los Angeles—opened last fall. The brand decamped this summer to developer Steven Craig’s newest addition—the Outlets at San Clemente.
“Citadel is more of an international brand outlet, and we are definitely a local, California brand, and we felt that our customer fan base was going to be stronger in San Clemente,” Gray said. “We haven’t had the years to invest to develop the brand as an international brand, so our strength is closest to home.”
The new boutique is at the Center Court, near the Guess and Calvin Klein stores and across from Cole Haan and Zales.
“This mall is … exquisite and his vision is absolutely amazing,” said Marie Gray, referring to Craig.
Hybrid Model
Grayse’s outlet boutique offers an array of full-priced and discounted items. It’s a merchandising model that Kelly Gray calls “hybrid”—intended to attract customers looking for value, as well as those willing to spend more on the latest styles.
Kathy Martino of Capistrano Beach attended a fashion show during the boutique’s grand opening this month.
“I like their colors; it’s vibrant and trend-setting,” she said about the collection. “I don’t like things that are outdated and age-centric.”
Martino’s view reflects Marie Gray’s long-standing design direction.
The mother-daughter duo’s designs are for “everybody, it’s a lifestyle,” Marie Gray said.
Her daughter, meanwhile, has a more specific vision of the Grayse customer.
“She’s sexy, she’s glamorous, and she’s edgy,” Kelly Gray said. “She’s very confident, she takes personal style very seriously, and she enjoys all the breadth of product that Grayse has to offer, where she can come in and buy a relaxed tee for $195, or she can buy an all-over privé evening gown for $1,200. For her, it’s not about the price, it’s about achieving the look in the moment she wants.”
Grayse’s annual revenue is about $10 million, according to Business Journal estimates. Opening a brick-and-mortar in today’s e-commerce-dominant market can be somewhat scary, Gray said, adding, “I think that we build relationships with our customers and the community, and we are in the business of selling experiences and secondly clothes. So we likened ourselves to the hospitality or the hotel industry where we want somebody to walk away with an experience whether they purchased or not, and we really feel that experience will translate in repeat traffic. It’s slow and steady.”
