Johnny Was Apparel brand investment pays off for Endeavor



Johnny Was has become a lifestyle brand.

Johnny Was, named after a Bob Marley song on the artist’s chart-topping 1976 album, turns out to be a hit for his investor.

The downtown clothing brand has quadrupled its annual revenue to around $ 200 million since

Downtown-based Endeavor Capital acquired a majority stake from founder Eli Levite in 2015.

“It worked really well,” said Leland Jones, managing director of the private equity firm’s Los Angeles office. “Covid has been a bit harsh on them for about six months, but they bounced back right away and are doing remarkably well. First of all, we wondered if everyone was talking about the revenge spending (after the shutdown) that everyone is talking about, but it continues.

Opportunity shots
Levite, a local clothing manufacturer, founded the company in 1987, focusing on “boho chic” women’s clothing – casual outfits with mixed patterns, colors and layers.
When Endeavor took over, Johnny Was had nine stores, including a flagship store that opened at the Santa Monica Place Mall in 2010. The majority of its revenue came from wholesale accounts with high-end department stores and retailers. hundreds of stores across the country.

Today, the brand has more than 300 employees working in 57 company-owned stores and a downtown warehouse and fulfillment center. Its wholesale business consists of a “strong business” with Neiman Marcus Group, Saks Fifth Avenue and Bloomingdale’s Inc., and “a smaller business at Nordstrom,” according to managing director Robert Trauber, who added that the brand is sold in around 1,000 stores as well as in Australia and Germany.

Trauber, who helped Endeavor court Johnny Was before taking over as CEO, saw potential for growth in the brand’s direct-to-consumer business – it had a small but “very strong consumer base” and little. of stores, but profitable. It also had an underdeveloped website and a small customer database, both of which were ready to expand through various marketing and customer acquisition strategies.

“When we got there… wholesaling was about 70% of the business, and we changed that, (but) we didn’t decrease wholesaling,” he said. “Wholesale continues to grow, but direct-to-consumer sales are growing much faster, and now direct-to-consumer sales represent 75% of the business. “

His team “focused on integrating the omnichannel approach,” where their stores serve as showrooms and warehouses.

“If you bought online two or three years ago, if we were exhausted, we were exhausted and you had to walk into a store to buy something,” Trauber said. “Today, if you go online, you have access to our inventory on 57 doors, no matter where that product is. … We are much better able to leverage inventory, and that has been wonderful for us.

New lines
There was also room to expand product categories, centered on woven uppers.
“It was such an opportunity to expand the business of bottoms and create new categories, even if it was tops – more sweaters or knits that they didn’t really have, even from home and accessories, ”Trauber said. “We really made it a head-to-toe lifestyle brand. “

While product design and marketing is done in-house, Johnny Was outsources most of its manufacturing to factories overseas. Sewing and embroidery are done in Shanghai, cashmere and other knits come from Peru while leather handbags and shoes are made in Italy.

Calmé, the brand’s sustainable loungewear line, is made locally from tencel, hemp and organic cotton.

Johnny Was’s collection list also includes JWLA, 3J Workshop, Biya, Pete and Greta, Love Johnny Was and Jade, each of which cater to a specific subset of the brand’s aficionados.

“The target consumer is sort of a middle-aged, more mature customer,” said Carrie Tanzman, who joined Johnny Was of Lucky Brand two years ago to serve as senior vice president of merchandising, planning of goods and purchases. “She definitely has a bohemian vibe. I think the idea is that our product is meant to be a mixed proposition to create her own unique outfit.

Product prices range from $ 58 to $ 2,600, which is why the age of target customers is “a little bit older because your 20s aren’t going to spend the kind of money it costs to have Johnny.” Was, although it would appeal to her from an aesthetic point of view, ”added Trauber. “We are trying to broaden the product hierarchy, the pricing approach, so that more people can access the brand.”

Trauber, who was president of Trina Turk for three years before joining Johnny Was in 2015 and three more as CFO and COO of Juicy Couture, plans to add more stores “where the economy makes sense.” .
Plans are also underway to expand the company’s physical presence in Australia.

When it comes to Endeavor’s playbook, Johnny Was could be market ready. But the private equity firm, which also owns a controlling stake in City of Industry-based Whiplash Inc. and Burbank-based Visual Data Media Services, does not have a prescribed holding period, according to Jones.

“I would say that in the vast majority of cases, the type of catalyst for leaving one of our businesses is usually when (its) management… (is) interested in exploring getting cash or reaping some of the values ​​that they created, ”he said. “We always listen to management when we hear that, so often it’s the catalyst. “
It seems that Trauber is in no rush.

“There is no active process at the moment, but it would be reasonable to think that in the next two years (Endeavor) would consider an exit strategy for themselves, not for me or my team,” he said. -he declares. “I love Johnny’s. We (have) a large group of people. … It’s a happy brand.

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