The Exchanges

Q Right. And, and, and I think at this point, the company is just, Herschel is just the two of you. So, all right. So you're at this trade show. With all these samples in New York, uh, and what happens?

A When we, when we first walked into the trade show, we were the first people to show up. Uh, we had hockey bags full of our samples. That's very Canadian of us. We, uh, we rolled up to our booth, and there was an apparel rack, uh, sitting in the booth. So, um, We went and asked the show organizer, uh, you know, if there was any shelves, if there was any racks, if there was any other things that we could have, because we were a bag company, we weren't selling clothes, and, and they said, you know, that's all we've got, and, um, Jamie noticed a big, huge pile of pallets sitting on the other side of this art museum, and we literally spent the better half of the day, at the very least, going to get tools, uh, ripping apart pallets, And constructing our, our very first trade show booth.

AI assessment note: “we literally spent the better half of the day... ripping apart pallets”

Q Well, explain, explain what, you said you wanted to be more like a shoe company rather than a bag company. What did that, what does that mean?

A Well, shoe companies were doing so many awesome things. I mean, they were creating segmentation in their lines to have, have tiered products that would only be available in certain channels. They were working on collaborations with, whether they be artists, musicians, other brands that were Telling stories differently. The, the passion that people have for sneakers even today, whether it's collectability or new launches or, or the, the hype around it is, is something that's, is intoxicating. And again, the bag business wasn't a part of this. You know, we sort of looked around, you know, most people, especially for going back to school, bought their bag at a stationary store or a big box store. And oftentimes it would be the engineering of these stores to say, get your calculator, your pencils, your binders, your paper, your duotangs, and at the very end, you'd be like, okay, where do you put this? You put this in the bag that was available there. Well, those kids weren't buying their sneakers from that store. They weren't buying their hat from that store. They weren't buying their jeans or their tees from that store. And we wanted to be able to separate that conversation into a unique relationship Buying experience, and I don't think there was a brand that totally existed to do that.

AI assessment note: “they were creating segmentation in their lines to have, have tiered products”

Q separate cities, right? Uh, Jamie, you're in Calgary. London, you're in Vancouver. And I know that when you went back after that, I mean, that trade show really kind of opened things up for you, not just in terms of orders, but in terms of connections to like big retailers, including Nordstrom's, right? I mean, did Nordstrom's reach out to you and say, hey, let's meet up after the show?

A Well, we reached out to them, um, and they're based in Seattle, so it's just a short drive away from us here in Vancouver, and, uh, I ended up going to meet the buyer at the Nordstrom office in downtown Seattle, uh, Uh, the night before I, I had to drive down to Seattle, I was actually playing hockey, and I actually got in a little bit of a scrum, and end up walking out of that, that, uh, rink with a bit of a shiner, actually. And so, next morning I woke up, I had to put some eye makeup on to, to patch myself up, ended up grabbing our samples, driving down to Nordstrom, uh, had a meeting with them, and the, the first thing the buyer said was, Yeah, we don't actually buy backpacks. Uh, we don't really sell them in our store. And I said, well, that's why we're here to change that. And, um, and, and ultimately through a little convincing, we got an order from Nordstrom. And, um, they're ultimately one of our largest customers, uh, still today.

AI assessment note: “Well, we reached out to them, um, and they're based in Seattle”

Q And what kind of backpacks would you use?

A In the latter years, I was carrying a brand from Japan called Porter, which is, you know, still a beautiful, beautiful brand, and it was expensive for what people would say a backpack is, but very, very simplistic and pared down. And Jamie and I never wrote a business plan for this, but some things were quite obvious. If you look at all the stuff that Jamie just mentioned about bags having straps that people generally people don't need or extra pockets or this feature and that feature, we thought we could come up with a sophisticated product that a lot less features for a similar price, but maybe extra quality and so on into it. So, uh, It gave us also a lot of confidence seeing these other brands and their price points where they existed to say, like, well, we should be able to make a company that sells in those price points, too.

AI assessment note: “In the latter years, I was carrying a brand from Japan called Porter”

Q All right, so you get this, uh, the, the, the specs to this manufacturer in China, and Presumably you're waiting with bated breath for them to send them back, and, and probably took, what, a couple months to get those samples?

A Probably a month, and yeah, I mean, this is, it's a big deal, uh, for us. I mean, we, we've really never seen a sample of, of Herschel before, and Jamie and I promised ourselves that we would be together for the first time we opened our first samples, and they actually got delivered to Jamie's office in Calgary. I happened to be at our family's, uh, summer home, and I drove into the city. We, we met in the outskirts of, of Calgary, right on the, Right on the outskirts of, of, of town. It was a bit mafioso style, where, where the cars rolled in, trunks open, box pulled up, box cutter open, Jamie sliced the box open, and we, like, literally opened up the box and, uh, and saw our first samples, and, uh, To be very honest, they were pretty disappointing.

AI assessment note: “Probably a month, and yeah, I mean, this is, it's a big deal”

Q Alright, so they get out to Urban Outfitters, and how'd they do?

A I, uh, I had a call, uh, with the buyer at the time. His name was Tony, and they had been in market for a couple weeks, and, and I, uh, I asked Tony, like, how are we doing? He's like, yeah, you know, they're, they're doing pretty well, and I'm like, huh, that's awesome. I was like, what, what are we talking, like, sell-through-wise, and he's like, well, we, you know, we got a big chain here. It takes a while to get the bags out to, on the floor everywhere. You know, some areas get them faster than others, but, uh, yeah, we're, Currently selling at about 26% a week. And I'm like, 26% a week? And he's, and I'm like, that's pretty good, right? And he's like, oh no, that's, that's awesome. And, uh, yeah, I mean, he's, uh, and then right next to talk about all that extra stock we had, uh, he was like, you gotta send us over what you've got. And, uh, they, they were a great partner and, and, and still are today.

AI assessment note: “Currently selling at about 26% a week.”

Q So, so in, in, in the U.S., right, a lot of kids, when you ask them what they want to be, they say, I want to be a professional athlete. When you guys were kids, did you think, I want to be a professional hockey player? Like, did you guys and all your friends think that's what you wanted to do?

A I think it would have been the dream. You know, we grew up playing hockey. I mean, we spent thousands of hours playing hockey, and in fact, if the rinks weren't open, or the ice wasn't frozen, we'd also be playing street hockey in front of our house, in our cul-de-sac where we grew up, and there would definitely be times where you're role-playing You know, that final shot and that big game to hoist the cup above your head. I mean, I've, I've role played that many, many of times, but I, I also realized as you get into your teenage years that I wasn't going to make the NHL and obviously also interest started to blossom in other, other fun things that we love.

AI assessment note: “I think it would have been the dream. You know, we grew up playing hockey.”

Q Yeah. So so,, so so so,,, so so so so so so, so, so so,, so so so so so so,, so, so, so, so, so, so We're not going to quit our jobs, but let's just kind of dip a toe into seeing what we could do. Is that sort of how it started?

A Yeah, absolutely. I mean, conveniently enough, uh, especially with how a brand like Vans bridged itself from action sports to fashion, we were already going to places and selling to stores that would, would ultimately end up being some of our first accounts. And so actually working with Vans and still, uh, working amongst that actually was a huge benefit because we were still in the industry. We were still seeing Changes, whether it was with our brands or, or competitors and, and actually even how retail was changing and everything was really progressing. So yeah, we kept our, we kept our day jobs for sure. And, and, uh, they were really awesome jobs, you know, and they're, they were hard to replicate, you know, without having university educations or degrees or a really specialist nature to fall back on. Uh, it was actually for us really important as an insurance policy to keep them.

AI assessment note: “Yeah, absolutely... So yeah, we kept our, we kept our day jobs for sure.”

Q went from, like, in a very short period of time, like a band playing at a small pub, to then overnight going to Madison Square Garden. So how did you manage that scale and that growth? I mean, you know, if everything's being thrown at you at once, how did you scale up and bring the right people in and, and deal with the growth? Tell me what you did.

A Well, we, I think we allowed ourselves, uh, to not be perfect until we ultimately needed to be. Uh, at that point in time, we went out and we recruited people in finance roles and operation roles that ultimately could build out an entire department. That's when we were diverting ourselves from being a single factory brand to, to multiple manufacturing points, uh, to make sure we had stability, uh, That's when we started product testing every single aspect of our products to make sure that they were passing tests and chemical tests and quality tests all around the world, and so it just got really real, really quickly, and, and from, well, let's, year one didn't turn a profit, albeit it was a very small year, but since 2011 and on, we, we've always been profitable.

AI assessment note: “we recruited people in finance roles and operation roles that ultimately could build out”

Q you wanted to do. A bag to be. I mean, I guess you, you're thinking, let's start with like, let's, let's kind of reverse engineer this instead of just coming up with a product. Let's think about like the, the backstory of the product. Is that, is that right, Lyndon? Did you start with, with a story before you started to focus on what the actual product would look like?

A I think it was all happening in, in, at the same time. We, we know, we knew the aesthetic of what we wanted the product to look like. And, and a lot of that had this, this idea of, of a classic brand, but we wanted it to have a modern twist because a lot of our favorite brands are those brands that have stood the test of time. And it was between backpacks, duffel bags, and hip sacks were really our first, uh, foray into, into the bag world. And we started feeding this and, and ideating out What a line plan would look like, and again, it seems like, for us, that was very natural, because that's what we did for a living, whether we were working amongst designers at Vans and giving our feedback, or Jamie at K-II giving feedback for ride snowboards, or K-II snowboards, etc. It was understanding that, that, that was really important, so it started to really become alive, although those are still the very early days, but it started to come alive.

AI assessment note: “I think it was all happening in, in, at the same time.”

Q So, Urban Outfitters clearly was gonna, was gonna put in an order. What did you guys leave that, I mean, how many orders did you leave that first show with?

A So the way trade shows generally work is we're going to get orders after. So you establish the connection. Uh, we, uh, we got to meet a whole bunch of the best sort of sneaker shops, uh, that were started, you know, uh, ones that come into mind is, uh, Bodega in Boston was, uh, one of the first people we got to meet. We, we had an awesome encounter with GQ magazine, uh, at that show who, cause a lot of times press will circulate the shows as well to figure out what's new. And, um, GQ, uh, Uh, the next day requested one of our bags to, to be shot in their studio, and we ended up on their, the front cover of the GQ gift guide for that year, and it's easy to reflect on this now, like, yeah, we're in the gift guide, but our brand did not exist at this point in time. Like, nobody knew us, and for those, for those moments for, you know, especially that holiday season, it's like, we, we were starting to exist, and, um, those were some of the early, like, oh, this is really gonna work.

AI assessment note: “the way trade shows generally work is we're going to get orders after.”