The Exchanges

Q and especially e-commerce focused brands, it turned out to be an incredible event. You know, opportunity because people are stuck in front of their computers. Now, some apparel brands, it was a disaster, right? Especially if you're, if you're selling stuff for the office, but for more casual brands and things like that, it was actually a great year. Tell me what happened to you guys during that COVID year.

A So we had a couple of really great things that were going into that year of 2020. Our Nordstrom business was finally starting to work. So stores were, you know, between wholesale and stores, it was about 70% of our business, and only about 30% of our business is e-commerce. So when, when it first shut down, 70% of our business is basically dead. And it was really tough. And, you know, we had to do furloughs for a bunch of the team, and we had to figure out how to survive. And then at some point in May, You know, we're like, all right, e-commerce is better than we thought. We had comfortable product. It was great for stay at home. Like it's performing better. Like, let's start spending more on marketing.

AI assessment note: “So when, when it first shut down, 70% of our business is basically dead.”

Q What was it that like, how were you able to To differentiate it in your mind. I mean, it's a sort of a late kind of like laid back coastal vibe. Like what made it in your view different from any competitors?

A Um, the, the type of stores we were going at. Were more of a luxury fashion retailers. So we were going after Barney's. We were going after Japanese retailers. We were going after Stagg in Austin, this awesome store there. And so these stores kind of had this, let's just talk about the American market, right? They had this whole of like, alright, we either have suiting, dressy haberdashery suiting, or we have Ralph Lauren, or we have like golf brands. They sort of were like, we're kind of missing a rugged, casual take on American, you know, that's got some coastal vibes. You know, at that point, Tommy Bahama was kind of out of fashion in that world. They just came, and they were like, we've just been missing this. The price point was a little, was higher end. The quality was higher end, but the vibe was just like so chill.

AI assessment note: “we're kind of missing a rugged, casual take on American, you know, that's got some coastal vibes”

Q How much did you, your goal was 400 grand that first year. What'd you do that first year?

A So what ended up happening that first year was We ended up doing like 365, 350 indirect to consumer sales. And, you know, this sort of experience on the road showed me the power of these small specialty retailers across the country because we didn't have to spend any money on marketing. We just had to get the beach house there. And so when we, when Mike designed that first line, there's momentum. There's like these stores are interested in this brand. Online, no one was interested in us. In person, people were interested in us. And then now I found these buyers from these sort of clothing stores that were interested in what we're doing. And I'm like, this is going to be what gets us going.

AI assessment note: “We ended up doing like 365, 350 indirect to consumer sales.”

Q gonna expand too quickly. You're going to get over, you're going to get over your skis, and you're going to see that all of a sudden you're, you're saddled with all these costs, overhead employees. Um, you did have to do some layoffs. I mean, there have, and this is normal in any business, business cyclical, but you have, was that, do you think that was connected to this expansion?

A Uh, absolutely. If I go back to, you know, we got through COVID, we saw this huge increase in business, and I definitely became more More focused on revenue growth than profit margin. And, you know, my, my survival mode went from how am I going to sell enough things to survive to, you know, how am I going to grow this business, uh, you know, even faster because we got this great momentum finally. And, you know, I gotta build an executive team, I gotta build an organization, so it can really stand the test of time, because we've now gotten the business to this level of sales that is, you know, bigger, um, and then all of a sudden, you know, in 2022, when the COVID, you know, wind in our backs kind of slowed down.

AI assessment note: “Uh, absolutely. If I go back to, you know, we got through COVID”

Q And, and Alex, how much money did you have to, or did you, were you, did you make available to, to do this? Like, you had some saved cash, probably living as, you know, frugally as possible, but how much money did you, were you able to put in?

A Yeah, the first inventory, I remember when we did our first inventory buy of the, of the board shorts that Mike developed. The initial deposit was like a 150,000 dollars. And for the year that Mike was after he left Ralph Lauren, he rented a little studio and he set up shop there and he sort of set up his concept wall, you know, some of the branding, the fabrics that he was working on. He was there seven days a week all the time. And I would go over there on the weekends to catch up with him, brainstorming about the business. And so that kind of went on and on for months and months and months. And I loved it. I freaking loved it. And I was just feeling like I wasn't really enjoying my job that much anymore. I felt like my dad was in my head still, but, um, I had to make the decision. It was getting closer. And I just had a couple sleepless nights, and just, like, woke up in the middle of the night, turned to Carrie, and was like, I gotta do this.

AI assessment note: “The initial deposit was like a 150,000 dollars.”

Q All right. How often were you guys talking about the contours of what your, your company would, would be like? Like, how, when, as early as, I don't know, a year, two years after graduating, or, or even before? Like, take me into those, like, conversations you guys were having.

A I think the first thing for me was, like, when, like, seeing Mike in the Ralph Lauren world, like, he would have me come by the showroom sometimes, and kind of, like, we would go to the mansion. You know, I was going from this, like, you know, stodgy Wall Street office, you know, barren place. To just, like, this amazing world that Mike was living in. And when Mike would get up in the morning, he would dress a, like, a costume. You know, some, they looked like a nineteen-eighties preppy guy to a nineteen-forties lumberjack. Like, they just, the costumes that he wore, it was cool. Like, it was just fun to experience. He was living in this creative world, you know, and I'm living in this, like, spreadsheet world.

AI assessment note: “I think the first thing for me was, like, when, like, seeing Mike”