Small business
It was hardly a predictor of a multi-billion-dollar brand. Twenty years ago, I’d grab the green line uptown from Bleecker—hopefully the 4 or 5 express, not the leisurely 6 local—and pop out at Bloomingdale’s on 59th and Lexington. From there, it was a couple of avenues west to Barney’s on Madison, navigating the first floor without money being siphoned from my wallet, taking the stairs to the basement, and politely fending off questions about whether I was buying something for my wife, girlfriend, mistress, or all three.
There, amid counter after counter and shelf after shelf of mysterious women’s skincare miracles, was Aesop. It was a couple of shelves, each with roughly two feet of products on display. That was it. I’d snap up some Moroccan neroli shaving serum or a tub of mandarin facial hydrating cream, engage in some conversation around how great it all was and why this expat Aussie swore by it, turn around, and head home. I did this every couple of months for, oh, the next six or so years.
In 2010, Aesop opened its first New York City store, in Nolita. Today, it has 10 in the city and 90 across the United States. And the little brand founded by Melbourne hairdresser Dennis Paphitis in 1987 was earlier this year bought by L’Oreal for $3.7 billion (it was sold by Brazil’s Natura, to which Paphitis had sold a 65% stake for $68 million in 2012).
I didn’t mind the effort it took to slake my Aesop thirst. It was nice to support a fellow Australian, for sure, but there was a deeper sense of satisfaction (smugness, to be honest) at feeling I was one of few in the know. That was magnified two other ways: doling out coveted Kiehl’s products on trips back home (“Kiehl’s!”), and returning to the States with all the Aesop stuff the two shelves at Barney’s didn’t have.
Today, Kiehl’s is everywhere in Australia and Aesop is ubiquitous with about 350 stores globally. Both brands have gone the same way as dozens in my life: I hear of something (Aesop, James Perse, Barbour, Hunter, Baxter of California, Patricks, Orlebar Brown, Reigning Champ, Tracksmith, etc. etc.), it feels very insider-y for maybe a year, and then I’m left telling people “I was buying it before it was everywhere!” For a while, it literally felt like J. Crew determined its “in good company” partnerships by raiding my closet.
The latest in this long line? Vuori. I began buying its crazy-soft sweatpants and shorts and assorted workout gear in 2017 when I lived in California. Again, it felt smug and virtuous: the company had begun two years earlier in nearby Encinitas, selling yoga gear for men. I began getting into it when it pivoted toward general sportswear, before it expanded into womenswear.
At the start, it was online only and I never saw anyone else wearing it. Today, it seems everywhere on everyone. A few weeks ago, I paid my first visit to a Vuori store and bought a tee because it felt like the right thing to do, but it made me a little wistful. Gone was a carefully curated selection in favor of wall-to-wall gear, and getting a personal “thank you!” note for making a purchase has disappeared amid a juggernaut expansion: Vuori is currently valued at around $4 billion, has more than 35 stores, and plans to open more than 20 a year.
Just so we’re clear: I’m not begrudging that success. It’s fantastic when the visionaries who take risks on small brands parlay that into a major payday, just as I’m happy so many people get to enjoy products as I have. But something definitely gets lost as brands get bigger, and I’m not just talking about my ability to be a smug insider.
Quality is a big and familiar one. One of the reasons for expanding is to enjoy the economies of scale that brings, and the more stuff you make, the more tends to go wrong. Sizing becomes inconsistent. Fabric thinner. The stitching a little ragged. The sweats you had that you wore to death but still lasted for years now seem to fall apart in half the time.
A brand’s charm also often disappears, which is an issue for all companies as they expand (especially if they expand rapidly). Their success is built on a distinct culture that emerges organically and is transmitted to customers both formally and by osmosis. Clinging to that is hard when you’re small, and fiendishly difficult when you’re adding tens of staff every week. A case in point: I recently listened to a podcast about cafe group Bluestone Lane, where founder Nick Stone specifically noted its distinctive, Melbourne-style culture as a critical point of competitive differentiation. On my next visit to New York City, I ducked into one of its stores for a morning flat white and the service and experience was … more like “New York City bodega at 2am.”
The ultimate solution from the consumer side is relatively easy: you find the next great thing no-one knows about. But at a broader level, I’d love to see more founders just commit to staying small(er). Maybe that’s riskier—purely by virtue of relying on a smaller customer base—but I’d like to believe there’s a sweet spot where you can build a brand with critical mass that’s not mass market.*
Even better would be for someone to build a portfolio of such brands and then genuinely leave them to their own devices (rather than just say they will). That could provide individual brands with greater financial security as well as the option of shared resources ranging from the usual array of back-office functions to marketing to customer data and analytics. I’m sure a savvy private-equity firm or three does this already, but I’m going to pretend creating a teeny tiny LVMH for small brands is my idea.
One thing I do know: brands retaining their cache once the rocket ship launches are few and far between. For what it’s worth, Aesop’s managing it. That may be because while it has expanded dramatically, it’s done so within clear boundaries. Products don’t appear then disappear, and the branding hasn’t changed. There’s no one-size-fits-all approach to stores, although they all have an Aesop “feel.” And when new products launch, it always seems considered—it’s organic growth, rather than trying something radically different to “create a new revenue vertical” or whatnot.
As for Vuori, I’m just not sure. My little ol’ opinion is meaningless: its potential growth remains massive given its starting point and it’s now marketing to gajillions of people. But if a small competitor emerges with a similarly clean aesthetic, minimal logos, quality fabrics and manufacturing, and a carefully edited range, I’ll be first in line. And I’ll relish the window of 12 months or so when I can subtly but smugly luxuriate in my insider status.
* As timing would have it, a great article on how Japanese brand 45R embodies this approach was just published on Permanent Style