Oct 13, 2025 · 1h 13m · how-i-built-this
Faherty Brand: Alex and Mike Faherty. How Jersey Shore + Manhattan Chic grew to 80 stores.
Alex and Mike Faherty · 43m spoken Guy Raz · 22m spoken Alex Faherty · 5s spoken Mike Faherty · 1s spoken
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of 'How I Built This,' twin brothers Alex and Mike Faherty detail how they combined technical garment engineering and strategic financial discipline to build Faherty Brand into a $250 million apparel empire with over 80 stores.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Guy holds 34.6% of the talking time here. How this is scored →
Guy as informed peer 4.0 Guest teaching 2.6 Guest disagreement 0.3 Guy pushing back 0.9
speaking balance: gold is Guy, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 41:20 Rejecting DTC orthodoxy in favor of wholesale
Alex pushes back against the prevailing direct-to-consumer wisdom of the era, arguing that wholesale financed by factoring was far more capital-efficient than burning millions on digital customer acquisition.
Hardest push from Guy ▶ 1:04:34 Pressing on overexpansion and layoffsGuy directly presses the founders on whether their rapid pandemic retail rollout caused them to get ahead of themselves, forcing subsequent staff cutbacks.
Biggest teaching moment ▶ 23:36 Material engineering of hybrid board shortsMike educates Guy on technical textile development, detailing how precisely combining 17% cotton with recycled filament yarn produced a quick-drying surf fabric that still feels like traditional casual apparel.
Guy holds their own ▶ 1:01:10 Connecting retail expansion to Panera Bread case studyGuy and Alex connect on Ron Shaich's counter-cyclical playbook during the Great Recession, with Guy reinforcing how downturns provide favorable retail real estate terms.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Guy as informed peer | Guest teaching | Guest disagreement | Guy pushing back | Why |
|---|---|---|---|---|---|---|
| Roots of Style: New York City and Coast to Curb | 3 | 2 | 1 | 1 | Guy Raz probes whether Mike felt pressure to hide his passion for fashion while in school. Mike explains how moving to New York City made being an artist culturally accepted and celebrated. | |
| Collegiate Athletics and Learning the Craft | 3 | 3 | 0 | 1 | Guy notes the unusual blend of collegiate sports and fashion design. Mike details the intense physical grind of balancing varsity basketball with all-night sewing classes. | |
| A Shared Ambition and Deliberate Apprenticeships | 4 | 2 | 0 | 0 | Guy asks about the intentionality behind the brothers' career planning, summarizing their deliberate division of skills. Alex confirms that even in college he practiced consumer merchandising via early eBay reselling. | |
| Mastering Garment Engineering at Ralph Lauren | 4 | 4 | 0 | 0 | Mike explains his technical apprenticeship at Ralph Lauren's RRL line, breaking down the complex micro-engineering required to replicate vintage textiles. Guy listens actively while tracking Mike's career trajectory. | |
| Brainstorming Faherty and Taking the Creative Leap | 3 | 2 | 0 | 1 | Guy asks about the psychological tipping point and fear associated with leaving a secure design job. Mike describes achieving the creative confidence to visualize a finished piece from a raw swatch. | |
| Redefining Swimwear: The Hybrid Board Short | 5 | 3 | 1 | 2 | Guy challenges Mike to define how his concept differentiated itself from 90s surf giants and mentions upscale competitors like Vilebrequin. Mike explains identifying a market whitespace between cheap surfwear and high-end luxury trunks. | |
| Alex's Choice: Risking Finance for Family Business | 4 | 2 | 1 | 2 | Guy presses Alex on walking away from a lucrative Wall Street salary despite skeptical advice from mentors and his father. Alex reflects on reconciling conflicting guidance and committing fully to the startup. | |
| Manufacturing Relationships and Fabric Innovation | 4 | 4 | 0 | 1 | Mike explains the material science of blending recycled synthetic polyester with specific ratios of cotton for functional yet soft board shorts. Guy follows up on the capital requirements necessary to fund the initial production batch. | |
| Launching in Puerto Rico and Raising Seed Capital | 3 | 2 | 0 | 0 | The brothers describe flipping the switch on their initial website launch during a surf trip to Puerto Rico and raising a $1M angel round from 44 individual backers. | |
| Inventory Realities and the Slowing E-Commerce Wave | 4 | 3 | 0 | 1 | Guy digs into inventory management hurdles for new apparel companies. The founders explain building a custom reclaimed-wood mobile beach house trailer to create physical awareness when digital traffic stalled. | |
| Shifting Focus: Specialty Boutiques and International Demand | 4 | 3 | 0 | 1 | Guy asks how Faherty stood out among boutique buyers and department stores. The founders recount early traction with specialty boutiques like Fred Segal and unexpected organic demand from Japanese retailers. | |
| The Contrarian Wholesale Business Model | 5 | 4 | 1 | 2 | Guy points out that venture-backed peers favored direct-to-consumer online sales over wholesale due to superior margins. Alex defends their contrarian wholesale approach by detailing how purchase-order factoring financed inventory without venture dilution. | |
| Winning Over Department Stores with Plaid Flannels | 5 | 3 | 0 | 1 | Guy references Sara Blakely's department store guerilla merchandising tactics to ask how Faherty broke through in crowded stores. Alex explains personally visiting Nordstrom locations to train sales associates and reposition product displays. | |
| Retail Pop-Ups, Print Catalogs, and Financial Strain | 4 | 2 | 0 | 1 | Guy questions the counterintuitive decision to launch a print catalog in 2015 as other retailers were abandoning it. Alex details the intense cash crunch and payable management challenges during this scaling phase. | |
| The Legend Sweater Shirt and Securing a Key Angel Investor | 3 | 2 | 0 | 0 | Alex and Mike recount creating their hero product, the Legend Sweater Shirt, and receiving an unexpected cold email from an angel investor in Nantucket who injected critical growth capital. | |
| Steady Organic Growth and the Malibu Flagship | 5 | 2 | 0 | 1 | Guy compares Faherty's gradual trajectory against hyper-growth VC-backed unicorns. Alex explains why a slower pace was a conscious choice, reinforced by a conversation with fellow startup founders on a ski trip. | |
| COVID-19 Disruption and the Panera Bread Insight | 5 | 3 | 0 | 0 | Alex discusses how initial lockdown losses pivoted into strong e-commerce gains, and shares how Guy's interview with Panera founder Ron Shaich inspired them to aggressively sign retail leases during market downturns. | |
| Aggressive Retail Expansion During the Pandemic | 4 | 2 | 1 | 2 | Guy challenges whether rapid store expansion led directly to subsequent organizational overextension and layoffs. Alex candidly acknowledges that overhiring during the boom required painful staff cuts when tailwinds subsided. | |
| Navigating Modern Retail, Supply Chains, and Independence | 4 | 3 | 0 | 1 | Guy asks how Faherty manages contemporary retail headwinds and potential acquisition offers. Mike and Alex affirm their commitment to long-term independent ownership and proprietary supply chain control. | |
| Family Dynamics in a Fast-Growing Enterprise | 3 | 2 | 0 | 1 | Guy explores internal conflict resolution within a tight-knit family enterprise. Alex admits communication hurdles exist but emphasizes shared purpose and resilient positivity through industry cycles. |
Statements from this episode (26)
Mike Faherty: Replicating vintage clothing requires rigorous garment engineering
“You gotta dissect Every element of that fabric, from the yarn size, to how the yarn's finished, to the finishing of the fabric, to how densely it's woven, to then when it's sewn, like, what kind of stitching do you do to have it be, like, super durable, or cri…”
Faherty's market opportunity lay between mass surfwear and luxury swimwear
“So all of a sudden I was like, oh, there's somewhere in the middle for me, there's a playing ground of like, taking surf and starting to put a luxury element to it.”
An overseas factory owner was an early investor in Faherty Brand
“One of the owners of the factory, I would call a very close friend, and he was one of the first guys to give us money when we started the brand.”
Faherty Brand's deposit for its first board short inventory was $150,000
“The first inventory, I remember when we did our first inventory buy of the board shorts that Mike developed. The initial deposit was like a 150,000 dollars.”
Faherty Brand raised its initial angel round from 44 different investors
“I think our biggest one was a 100,000. So I think we had 44 investors in the first round.”
Faherty Brand calculated it needed $1,000 in daily sales to survive
“We had in our mind that we needed to sell a thousand dollars a day.”
Pop-up retail events perform better in secondary markets than major cities
“And especially when you're outside of big cities, people like events. They like something different. You know, there's not a lot going, as much going on in Charlotte, North Carolina, as there is, it's going on in New York City or L.A.,”
Faherty Brand made $1,500 selling apparel roadside in Big Sur
“We sold 1500 dollars on the side of the Pacific one by Big Sur.”
Faherty Brand generated $350,000 to $365,000 in year-one DTC sales
“We ended up doing like 365, 350 indirect to consumer sales.”
Wholesale accounted for 75% of Faherty Brand's revenue in year two
“So, year two of the business, wholesale's 75% of our business, because that's really what took off.”
Japan accounted for 40% of Faherty Brand's wholesale business in year one
“And then Japan was probably 40% of that first year's wholesale business.”
Faherty Brand lost $400,000 to $500,000 annually during its early years
“We didn't make any money our first bunch of years, but we didn't, we were losing like 500,000 dollars a year or 400,000 dollars a year. We weren't losing ten million dollars.”
Specialty boutiques move inventory faster because the owners are the salespeople
“Where we saw the initial success was in these sort of smaller specialty stores where, you know, think of this story. It's an owner who buys the product. He's the number one salesman. He knows all the customers. So he's got to sell what he buys. And so my job w…”
Alex Faherty personally visited all 10 initial Nordstrom locations carrying Faherty
“Well, that first year when we shipped to Nordstrom, I visited every single one. It was 10 different Nordstroms across the country, and I did a version of what Sarah did.”
Alex Faherty still secretly rearranges department store racks to feature his products
“You don't ask permission. You just do it. We still do it. But the, we still do it. Like I went to Bloomingdale's yesterday and I moved our stuff and like moved something out.”
Faherty Brand's first retail store generated $250,000 to $300,000 annually
“And then the retail store was doing, you know, 250,000 dollars a year or 300,000 dollars a year. It's not, you know, a million, millions of dollars store.”
Faherty Brand survived early cash crunches by delaying factory payments 120 days
“And the whole time, right, guy, we're telling all of our factories, like, give us another month to pay. We're basically like, you know, 60 days becomes 90 days becomes a 120 days, so half of our email traffic was just deflecting payment.”
Faherty Brand's primary angel investor cold-emailed their customer service address
“He sent me an email to hello at Faradaybrand.com, like to our customer service email. And it said, hey Alex, I bought some shirts in Nantucket. They're great shirts. If you're ever looking for money, let's talk.”
Faherty avoided venture capital and private equity to remain independent indefinitely
“And so I knew that sort of like going the venture capital private equity route was something we wouldn't do because of what we wanted to do with the brand, how we wanted to do this forever. We didn't really want to sell it.”
Wholesale and retail accounted for 70% of Faherty's sales before COVID-19
“Between wholesale and stores, it was about 70% of our business, and only about 30% of our business is e-commerce.”
Faherty Brand achieved meaningful profitability in the summer of 2020
“We became, you know, meaningfully profitable starting in the summer of And 20.”
Economic downturns are the best times for apparel brands to expand retail
“This is going to be the best time ever for up and coming clothing brand to get an amazing retail fleet.”
Faherty Brand boldly signed 40 new retail store leases during the pandemic
“And we signed over the course of 2020 and 21, 40 leases over the next For the, for stores that would open over the next three years.”
Faherty Brand laid off roughly 50 employees following a post-pandemic surge
“So yeah, we had to 50 people I think was our, was the layoff that we had to do.”
Owning proprietary fabric recipes gives Faherty flexibility to switch overseas manufacturers
“We own the fabric recipe, right? We own the yarn materialization of it, the customization of our products, so the makers become less important for us, because we own, like, the true recipe of all the garments, so we can have that flexibility.”