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Welcome to a new episode of the Opening Bid Unfiltered podcast. I’m Yahoo Finance executive editor Brian Sasa here at the NASDAQ in Times Square. Always something here happening at the NASDAQ, and I’m really excited to talk to our featured guest for this episode, Alex Faherty, uh, of Faherty, CEO, co-founder. Good to see you. And I should mention, um, we are taping this the day after the.Super Bowl. You were at the Super Bowl. I don’t evenknow how you got back here for me, man.
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Uh, thank God United got me, got me here on time. Uh,
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sotell us a little bit about your brand. You founded in what, in 2013 with your, with your twin brother. I remember when it was founded. I can’t believe what it’s been 1213 years since it was founded. We’ve been up to.
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Yeah, so, um, my twin brother, Mike wrote his college essay when we were 18 on starting the brand. So since then, we’re like, one day we’re gonna clothing company, you know, sort of like doing it out there and, and Mike.Um, Mike always loved clothes when we were kids. I mean, he’s been dressing me since I was 5 years old, and, uh, you know, we grew up in Spring Lake, New Jersey, which is a beach town on the Jersey Shore. Uh, so we grew up with Surf for Kids, outdoor guys, and then we moved to New York City and as teenagers and then we lived in New York and my brother wrote his essay on a brand that kind of merged our two lifestyles together, like living at the beach to living in the city, and he wanted to create a brand that could do that. And that was when we were 18 and Mike went on to fashion school.Then he worked at Ralph Lauren for about 10 years where he really learned the industry, branding, design, uh, and while he was in, I worked in finance, I worked in banking and then private equity, and we’ve just been talking about it and we turned 30 and Mike was like, you know, Al, like we’ve been talking about the song, we just gotta do it. And it was just the right time. I think we were driving somewhere like to Las Vegas for a bachelor party and like the right song came on and we’re like, you know, high five, let’s do it. Let’s do it.
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Yeah.How do you, I mean, how do you go from essentially, when you were in banking, uh, he was at what, Ralph Lauren.To starting a clothing, like what was that first day office? How do you suppliers like you had to literally get everythingstarted.
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Yeah, I mean, I had, I had no idea what I was doing. I mean, he knew how to make, make some clothes. So, uh, you know, I think that was really helpful. We, we, he was able to connect with a factory in India where he knew the owner and the owner really took us on and really helped us with our early runs because when you’re making only 50, 100 things, it’s really hard to get things made. So he was a key partner.Um, and then it’s just a lot of it’s like building this for me, it was like building the strategic plan, like where do we want to go? And it’s like step by step, step by step. Um, and you know, Shopify came around in 2013, which was a godsend, uh, you know, for scaling our e-commerce business. ThreePLs from a warehousing perspective became a much bigger thing so we could, you know, just pay someone to do it for us. And I think that sort of vintage of 2013, 2014, 202015, like all of a sudden it got a lot easier.To do business and then it was up to us to figure out how to get the distribution. So in the early days, we really focused on, um, building a wholesale business. So, um, with different department stores, a lot of other brands were going e-commerce, e-commerce where I first saw you. I saw you. Yeah, I mean, we didn’t raise venture capital money, um, and I think as someone who came from private equity, I wanna see if, I wanted to see if we could, you know, do it the old fashioned way. And Josse was a business that we could, we could get off the ground without raising a lot of money. And so we got some early success in Japan.Uh, and then we got some success with Nordstrom, uh, and then the wholesale business was going, and then we, we wanted to open up a store, so we opened up our first store, uh, in Greenwich Village that did well. We opened up another store, uh, and then, you know, we had our e-commerce business, and then really for us, uh, COVID ended up being a very, um.Very important time for the brand where all of a sudden people started wearing casual clothing and they, you know, they moved from wearing suits to work every day to wearing like, I’m still adjusting,
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yeah,
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full. I, I do have suits obviously, especially guys.
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I can’t believe I’mdoing this in a, in a, I don’t know, a vest. It’sstill a lot for me,
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especially guys. I mean, I worked in, you know, I worked in, uh, private. I wore a suit every day andYeah, the Patagonia vest. Not to mention not the brand, that it is what it is. And so, you know, we always, you know, our tenant of a brand was my brother Mike designs all the fabric. He wants it to be super comfortable, kind of wear worn in, but it’s like the mix between, you know, athleisure and like sort of classic sportswear like coming together. Um, and we really took advantage of what COVID happened. Like all of a sudden people were closing stores, leases got really cheap, and we made this decision.We can, we had 11 stores when COVID, when COVID happened, and when you have 11 stores, I’m still getting the call on Christmas Day when there’s a fire, you know, the fire alarm goes off like you just don’t have scale and.We said we either gotta do this or not when it comes to retail and, and leases were cheap and we ended up signing a lot of leases and five years later we have 83 stores. Um, are you still getting those calls? I’m not getting those calls praise, praise. I’m not getting those calls anymore. I got an amazing team, but that was a, a, a big moment for us because we had the e-commerce business went crazy in 2021. And then as the stores were opening, we were able to once ecom, you know, that curve kind of slowed, we had the stores coming and.Um, so we’ve, we’ve, uh, you know, we’ve basically, the business is, you know, 6X since, since COVID and, and has really transformed, uh, which has been really fun for me as a CEO to run, to really learn like now the business is at a bigger scale and it’s complications are different, but still, uh, I’m learning every day.
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Uh, I talked to a lot of tech founders, and they, they’re in this constant state of trying to raise money. Uh, they just that that’s their mindset. You didn’t raise anymoney.
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I mean, why was that, uh, I mean, we, I think it was important because Mike and I from the beginning, the dream was, can we do this the rest of our lives? And, you know, we put our name on it.So once you’re putting your name on it, there’s a whole another bit of pressure. Um, I think Mike coming from Ralph Lauren and being students of what he’s been able to do, I mean, it’s amazing what he’s been able to do over the last 40 years, you know, he’s still the, the chairman and chief creative officer of that company. And so I think Mike and I, like, if we wanna keep doing this rest of our life, we’re gonna have to control our own destiny. So we raised some money from friends and family, um, and some angel investors, and then, you know, we were always like, we gotta create a, a profitable business model so that we don’t have to worry about it. And so we were able to.Make the business profitable relatively early on. Um, JP Morgan’s been a great partner on the debt side to help us open up stores and scale the business, and you listen, I think that’s where my private equity background really came into handy to really help us. How do you do it as capital efficient as possible so we could, we could control our destiny?
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Is thatthe.Is that the North Star to be the next Ralph Lauren and Tommy Hilfair, like these icons. I’m in front of icon right now.
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Yeah, yeah, I’m not an icon yet. Uh, I’m just a, I’m just a kid from the Jersey Shore who likes clothes, uh, but yeah, that really is, as I think about, we’re starting to expand globally, um, yeah, to this idea of being a global iconic brand, and I think.What we’ve always tried to bring to the industry is like always, you know, as guys who grew up like surfing, like the environmental aspect of what we can do with our brand, so we’re, you know, Patagonia inspired us as kids, so we’ve always been very sustainably minded in the clothes that we make, the way we, you know, the partners that we work with, um, so how can we kind of do this business, you know, maybe a little bit better than other people are doing it. So we’re certified V Corp.Which is something we work really hard to get. And so can we become a global iconic brand but sort of do it the Faherty way, um, seems like an amazing challenge and, uh, and fun for me as someone who.I’m a student of learning this. Like learning the domestic business has been one thing, uh, learning now the international business, and we were predominantly a men’s brand, and now we’re becoming a little bit more of a women’s brand, like learning the women’s business. And so just constantly pushing the brand.
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How is that different,you know, developing that, uh, I, I look, I look at a company like Lululemon, they’ve had to develop the men’s business. They’ve hadthe other way,
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so we’re sort of going the other way around, um.There’s like anything, finding the right talent that can really help us do that. So, um, I’ve been working on that for sure. You know, men are much easier. I mean, men wear basically t-shirts, button-ups, sweaters, and it’s like basically the same silhouette. You just change the fabric and the color. Women, it’s a lot of silhouette changes. The, the fits are always changing, so it’s just a lot more of a dynamic business. So, uh, the fact that we’re able to crack the code in men’s and with, with some, you know, some of our products has been really helpful and, and.It’s just learning and getting better and speaking to the customer and talking to the customer and we’ve always had this kind of like, you know, this kind of coastal lifestyle and so hopefully that lifestyle can really resonate with people, uh, men and women.
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You and I are the, the same age, I believe. Remember Quicksilver?
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Yeah, totally. I mean that’s what I grew up with I grew up and so that’s a lot of what the brand was like, you know, as we got older, like what did we wanna wear that still had some of that but also merged it with some fashion and what you could find in designer brands but with that kind of like really casual vibe.Uh, we’re actually doing a collaboration with Quicksilver this summer, which is like a full, total full circle because if, but when you, if you met Alex Faherty at 11 years old, I, you know, Quicksilver, we used to go into
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what
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Volcom,
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yeah,
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Volcom, Vulwick Silver, Billabong, early, yeah, yeah, yeah, um, and those were big businesses.
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It was huge. I mean,Quicksilver used to be public. I don’t even, I can’t remember what I had for dinner last night, but I remember their stock ticker is ZQK. Like I don’t even know how I remember that stuff, um.So where, you know, I think about Ralph’s business, I mean, Western themed, but he’s expanded to other categories. Like, is that your vision, your five year vision to take this into a, a global lifestyle brand where I see your brand, home goods,various other items. Yeah,
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I mean, I think that’s, that’s the ultimate. It’s like once you can create a brand that has, uh, identity and people want it, like what else can you, you know, what else can you do with it, um.So we’re actually, uh, funny I said we’re actually, we’re, uh, we’re doing kids wear starting this, this fall, uh, fall holiday, so we’re launching a kids wear line, um, so that’ll kind of cater to 8 to 8 to 15 year olds, and then we’ve been working on more accessories, so we’ll probably get in the bags and shoes at some point. So yeah, you fill out the whole lifestyle, um, of the brand and.You know, we’ve even done things like we opened a restaurant, uh, and we, we call it, uh, Sun, a logo has a sun and a wave on it. We call it Sun and Waves Cafe, and that’s down in our hometown in Spring Lake, New Jersey, um, to kind of like create the lifestyle moment there. We’re working on a hotel project. So, you know, some of it is, you know, Ralph’s done Ralph’s Coffee.
9:51 spk_0
Well, if I wear your clothes, why not just, I want that lifestyle. Like I get it. Yeah, so
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Polo Bar has been awesome for us. So yeah, we have these examples of what some brands are doing and, uh, can we put our kind of ferity touch on it.But still, we, we’re still relatively small, right, when you think about public companies that you guys, that you guys would know modest.
10:08 spk_0
I mean, you’ve had what, 9-figure revenues, you got over 8080stores, yeah, but
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still in the, in the spectrum of, you know, apparel being the second largest, you know, uh, discretionary spending category, we’re still really small and we wanna stay, I think it’s one of the things that we want the brand to continue to feel small and special.And unique. And so that’s the balance that Mike and I, uh, you know, my wife carries in the business. Like we have to sort of keep figuring out I was like we don’t wanna make dilute the brand, you know, we don’t want to see in TJ Maxx, we don’t want it to become ubiquitous. It’s got to stand for something, um, you know, and Ralph’s done an amazing job of getting bigger. I mean, he obviously went heavy in the outlets and, but he’s been, you know, globally, it’s super strong. So I think for us this idea of how can we become global and be relevant in Europe and Asia over the next 10 years.I think is the ultimate challenge for an American brand because a lot of times it’s like American brands are kind of American like how do you really work to the rest of the world.Um, but we’re seeing some examples of that, uh, you know, Lulu’s been able to do that internationally. Um, it’s pretty amazing what Arter has been able to do over the last.
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How do youknow where to go? How do you know that where that first couple markets will be internationally? So, um,
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sometimes it’s, it’s, it’s, it just kind of happens. So right now, uh, Spain is our kind of biggest market outside the US, and that was a guy who runs a big department store in Spain.Loves the brand and was like, hey, I want this in the store and it’s been successful and I think Spain has like a, you know, it’s got a cool vibe, the, the, the people is stylistically I think it it works kind of with our brand and then, and then now it’s hiring people, you know, we’ve hired, um, people across the globe now to help take the brand to the next level and getting their feedback and, and I don’t, I, I only know as much as they know.Um, and, uh, and just trying to make the right decisions to, to, to take this thing slowly, um, and purposefully like to these next steps.
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All right, hang with us, uh, Alex, we’re gonna go off for a short break. We’ll be right back.All right. Welcome back to, uh, opening bid unfiltered here at the NASDAQ in Times Square talking to Alex Faherty of Faherty, CEO and co-founder and a future icon. I think we determined that in the first half of the block. I mean, this is what we’re going here for. Um, what has surprised you in retail the past year, if you had to just boil it down to a time period?
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Yeah, I mean, the tariffs were very surprising. I think we knew there was gonna be a China, a China tariff, uh, but the sort of global reciprocal tariffs, uh, was a shock, um.So we got punched in the face like a lot of people did, uh, so that’s been a lot of reworking our global supply chain and figuring out, you know, trying to stay one step ahead of what, what’s gonna happen. Um, so that’s been a big surprise. I think, um, outside of that, you know, the, the customer and the.The, the consumer, at least where we play has, has held up really well, um, so we had a great year last year and so I think that when the tariffs came I think we weren’t sure what was gonna kind of happen and you know, obviously the markets were up and, and our customer, customer did well and I think for us we’re our, our brand specifically is, um.We’ve got a couple products that are starting to really like I wouldn’t say they’re becoming name brand but like they’re starting to hit and we’re seeing that where it’s we have a pair of pants called the stretch Terry five pocket pant and you know it’s just kind of like taken off
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office icons, yeah,
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it’s like ajean but it’s comfortable sweatpants and it looks cool and.As I said, as guys can wear, you know, they don’t have to wear suits anymore. It’s, it’s worked, and I, and I just like, we’re seeing it in our department store business, in our specialty store business, and our online business. Like this one pant has just taken over as like one of our best wearing it the same pant every day to work. Let’s just be honest. So, um, and that kind of happened, you know, that sort of happens kind of out of nowhere, right? Like we made it, we invented a pant five years ago and it was small. It was small, and then, you know, it got some traction. We, we’ve, we’ve worked at it now, um.You know it was a big part of our growth last year and a lot of that’s what this business is is finding what’s that next icon product, what’s that next thing that customers that you’re gonna make that’s better than anything else they can buy and that’s how I mean obviously we can do what we can to to build the brand and and build that demand, but it’s, it really comes to the product making business of the fabric and the fit.And that’s what we can do, I think, really well. Where do you get, where do you make your product, uh, all over the world. So, um, if you were to wear one of our t-shirts or hoodies, it’s probably made in Peru. It’s really high quality, yeah. So that’s really my, my brother Mike, uh, coming from Ralph. He spent a lot of time designing fabric, so he makes a lot of the fab like with, with Mills, designs a lot of the fabric, comes up with like how it feels and how it looks. So that’s definitely a special advantage that we have, um, but is that it’s like.It’s like a chef, you go to a restaurant and uh anyone can make food, but like what ingredients are you using, uh, high qual how how high quality is and how good does do the chefs know how to make it so it tastes good and I think that’s a lot of what, what we do with our product and, uh, you know, there’s clothes everywhere, but how do you make it, make it feel that little bit different and special where someone wears it like, oh shit, this is my Faherty. I love this Faherty
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show. It, how do you, have you had to make tough choices.On qualitybecause of tariffs,
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um, we have
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maybe using,
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yeah,
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wehave not the button, adifferent button, different
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supplier, yeah, I mean, I would say we haven’t, we, I don’t think we’re a brand that would ever sacrifice quality because that’s one of our things that we.We stand up for, um, it’s definitely forced us to, uh, maybe not plan some product categories as big as we would want to because the tariff had just gotten, you know, just made it kind of unsustainable so some of that is we’ve had to narrow down the assortment, um, to focus on less things because um.We, we can kind of figure out the, the things we can make, make the margin that we need, but it’s hard to do it on everything because with a global supply chain you get hit. So being more selective, being smarter with how we run the business, um, but it’s like running a business, you know, whether it’s tech or any, like there’s just always something. It’s like every, it’s like whack a mole that’s what I say too. It’s like, and so it’s like what’s next? And so I think you, you develop an armor, um, to handle adversity.You know, you build a great team around you who’s helping you figure out what are all the, the things that are, that are coming up and it’s up for us like as a brand to like,Keep staying relevant. And, uh, you know, just at the Super Bowl.So we’re getting into sports now in a, in a bigger way. And obviously for our men’s business, sports is like, I don’t
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know, we’ve seen a push, you know, I think back to, uh, Abercrombie, for example. Last year they signed a deal with the NFL. Like how does getting into sports impact your?
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Well, guys,
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uh,
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care about their family and sports, you know, that’s basically like, that’s basically it. So, and sometimes it happens, uh, because of what we like and Mike and I and, and, and what we’re into, and, and it really, you know, just I said, sometimes it just happens is, um, when the Knicks, when the Knicks signed Brunson back in, uh, 2021.Uh, we’re growing up in Jersey, like Villanova, and everyone knew, you know, we knew Bronson well, and he grew up going to the Jersey Shore because when Rick was on the Knicks, they would go down. So I knew we had like some mutual connections. And so we signed Jalen’s like our first athlete ambassador and we became friends. And so Jalen’s kind of like was the, the liftoff point to now we have a big partnership with the Knicks every year and then we just signed a big NBA license, um, that we’re rolling out next October.And that’s like, you know, NBA and then, you know, hopefully next it’s NFL and, and it’s just through the relationships that umThat we can make and I think one of the things about having your name on the brand.Is that’s what I, you know, one of the things I’m doing is I’m out there trying to meet people to, um, to do it. And, and when you associate the brand with, with someone like Jalen and the Knicks and all of a sudden you got, you know, we got 6 stores in New York City, a lot of customers in New York, and they’re like, oh shit, Barity’s doing this thing with the Knicks, like that’s cool.Um, and that’s what’s up to us as, as the stewards of the brand is to keep figuring out what our customer wants us to be associated with.
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Do youmake decisions differently because your name is on the brand? I think about Under Armour. I mean, it’s not Kevin Plank’s business, you know. I mean, it is his business, but his name’s not on it. Nike, uh, it’s not Phil Knight. I mean, it’s Nike. I mean, how, howdo you,
18:02 spk_1
uh, I mean, I, it, it put a lot more stress on us because once you put your name on it, uh.It can’t, in our minds, it can’t not succeed because there’s just, we gotta, we’ve been saying we gotta do this. We can’t just like move on to another name. Like this is the only name we ever, it is our only last name, uh, and you have to go through some of the dynamics like when you get custom, like there’s stuff that comes up and customers get pissed about something, you know, and they blame on, you know, like the Fahrities are bad. They, you know, it’s now you’re trending in Google. Yeah, exactly. So there’s a little bit of like that association, um.But yeah, that really is every decision that we make if we wanna, you know, with our North Star that we wanna do this, we want Barry to become this global iconic brand and we wanna keep doing this for the rest of our lives, we gotta make decisions that are right for the brand and you know we’ve had to turn down opportunities that can make us money, uh, and if it doesn’t feel right, we won’t do it and, um, so but I think that’s the beautiful thing about founder led brands is like.They’re they can do it for the soul of like the authenticity of the brand and and uh being around for a long time uh and that’s what’s fun that’s what’s fun for us and so sports will definitely be something we continue to get into we’ve always had some, uh, we’ve always had partnerships with musicians and music because we love music too so.That’s what’s cool as I’ve been on this journey for the last 13 years, like what I’m into and what Mike’s into and sometimes that and Carrie, like that’s what makes its way into the brand and that’s I think what our customers love about it is they’re following like these real people trying to figure out how to build a brand, how to build a business, and they don’t really know what they’re doing, but they’re, they’re figuring it out. You’re,
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um, you recently closed what a Minnesota store briefly, um.And he put out a post on LinkedIn and explaining the decision, like, take me inside of that because IWell, I talked to a ton of CEOs, and I would say the past year they’ve, they’ve gone quiet on speaking out on these type of issues. How did you know, like, you know what guys, we need to take a stand. We need to like say something here and do something. Yeah,
19:58 spk_1
I mean, uh, we obviously were talking to our team about it, our full team about it, uh, for a couple of weeks, and, you know, Tuesday morning came, we had our team meeting, and, you know, just.Just sort of, you know, I, I just said yes, we gotta, we gotta do it.Uh, what I saw was just kind of like it just was too much and felt like we needed to say something for our, for our team, for our customers, uh, especially, you know, we have, we have a bunch of family who lives in Minneapolis and, and, uh, you know, it’s firsthand kind of going through all of it. And, uh, but it’s not, you know, for us, it’s not, you know, it’s just for us because we thought that was the right thing to do. And that’s the one benefit of owning the brand and names names on it. And so, yeah, I mean, we’re, we’re, we are a family, we are a family brand and so.You know, uh, people wanna call you’re trying to be political. To me it’s just that, you know, everyone believes what they believe and sees what they see and, and I think that’s the great thing about America is like the ability to brands or companies or people can, can just say what they believe and whether someone disagrees or not. Like I think we’re all, all one country trying to, trying to get through this.
21:07 spk_0
I imagine,uh, that was a tough decision to, to do for other entrepreneurs like that may be listening to this or watching this.What advice would you give them if they are wrestling with something like that on speaking out on an issue like that? What do they need to be doing?
21:20 spk_1
Um, I think you just gotta go to your heart and, and, you know, talk to your partners and, and, uh, you know, and, and whether we said something or not, like Faherty will go on, we’ll continue to make great product. Our customers will continue to love us, whether you’re believe this or you believe that, um, so it’s just up to the individual. Some people, you know.Feel comfortable about it or or don’t, I, I think it’s just, it’s, uh, these opportunities will come up in our life, um, and, uh, and you’ll, you only live once.
21:51 spk_0
It’s true. YOLO, lastly, um, when are you going in public, man,
21:54 spk_1
uh, I don’t know. I got, I got them in NASDAQ.
21:56 spk_0
I mean, they’re always welcoming people here at the NASDAQ.
21:58 spk_1
I got, we, we’re still way too small, um, but I think one of the, one of the things about, you know.Doing this the rest of my life and hopefully this can become a generational business and be around for many, many years. Like I think there’s some great examples of companies who’ve been able to do that, um, and go public and preserve that, uh, over time. So who knows, very far off, but you
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earnings,
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but it’s pretty cool, it’s pretty cool to be here, you know, as I said, I, I spent 10 years in the finance business and.Uh, just being invited and seeing what’s going on here, uh,
22:29 spk_0
it’s pretty cool. Well,congrats. Like I, uh, I’m rooting for your success. I think it’s a cool brand. I think your story and your brother’s story is absolutely amazing. Uh, keep crushing it. Appreciate it. Uh, that’s it for the latest episode of Opening Bit Unfiltered. Uh, hit us with all the likes and the loves and all the podcast platforms and YouTube. I appreciate it. It makes me better at doing these interviews. We’ll talk to you soon.